Appeals from the Orders of the Pennsylvania State Ethics Commission in the cases of In Re: Edward G. McCutcheon, Jr., and In Re: Elroy J. Hoak, No. 80-46-C, dated June 18, 1982.
Thomas J. Godlewski, Godlewski & Rathgeb, for petitioners.
Sandra S. Christianson, General Counsel, for respondent.
Thomas L. Wenger, with him Thomas W. Bergen, Wix, Wenger & Weidner, for Amici Curiae, Pennsylvania State Association of Township Supervisors, Robert Daws, Robert Hill and Bruce Henry, Trustees.
Edward L. Springer, with him Samuel R. Grego, Springer & Perry, for Amicus Curiae, Columbia Life Insurance Company.
President Judge Crumlish, Jr. and Judges Williams, Jr., Craig, MacPhail and Doyle. Opinion by Judge Craig.
[ 77 Pa. Commw. Page 530]
Elroy J. Hoak and Edward G. McCutcheon, Jr., former elected supervisors of Allegheny Township, a second class township, appeal an order of the State Ethics Commission. We must decide if the commission was correct in concluding that they used their public office to obtain financial gain in violation of section 3(a) of the Ethics Act.*fn1
Specifically, the commission found that Hoak, who had served as supervisor since 1964, and McCutcheon,
[ 77 Pa. Commw. Page 531]
who had served since 1962, voted to purchase life annuity policies for a pension fund for each supervisor out of township funds, and, upon resigning from their positions as supervisors in 1981, surrendered those policies and received more than $11,000 each.*fn2 The commission decided that it would refer the matter to the appropriate district attorney for prosecution unless Hoak and McCutcheon promptly returned the sums received, plus 10% interest, to the township.
Hoak and McCutcheon do not dispute that on May 19, 1973, at a public meeting of the supervisors, they and another supervisor approved a motion that the township purchase policies worth $600 for participation in a pension fund for each supervisor, and that, at a public meeting on June 11, 1974, they approved a motion increasing the annuities by $1,000 annually for each supervisor.
Two facts are important. First, the supervisors purchased the policies only for themselves, not as part of a pension program including other township employees. Although the supervisors could have joined the Municipal Employees Retirement System embracing other township employees, these supervisors did not do so. Second, the township auditors reviewed the township expenditures for the years in question and did not surcharge the supervisors with respect to them. However, the township auditors took no affirmative action with respect to these policies for the supervisors, in terms of approving them as compensation or otherwise.
Hoak and McCutcheon contend that their actions were legal under the Second Class Township Code,*fn3 which recognizes that supervisors may also serve as employees, ...