The Pennsylvania Commonwealth Court has largely upheld a State Ethics Commission finding that Valerie Kean Staab, a member of the North and South Shenango Joint Municipal Authority (Authority) Board, violated the Public Official and Employee Ethics Act (Ethics Act) through improper expense reimbursements and deficient financial statements. While the court agreed with Ms. Staab on a minor point regarding guest expenses from one specific conference, it affirmed that her actions—voting to approve reimbursements for personal and guest expenses related to conference travel—constituted an unlawful conflict of interest.
The ruling, delivered by President Judge Renée Cohn Jubelirer, confirms that municipal authorities do not possess unlimited power to authorize reimbursements under the broad “catch-all” provision of the Municipality Authorities Act (MAA).
The Core Allegations and Investigation
Ms. Staab, who also serves as an auditor with the Pennsylvania Department of the Auditor General, was charged by the Ethics Commission’s Investigative Division in 2022. The charges centered on her role as an Authority Board member, specifically alleging she improperly voted to approve payments for guests to attend conferences and sought reimbursement for personal and guest expenses. She was also charged with filing incomplete Statements of Financial Interests (SFIs) for the years 2016 through 2020.
The Commission’s investigation revealed that the Authority, lacking a formal policy until 2020 (which Ms. Staab herself helped write), had a practice, approved annually by the Board, of covering expenses for members and their guests attending conferences like the Pennsylvania Municipal Authorities Association (PMAA) and the Water Environment Federation Technical Exhibition and Conference (WEFTEC).
Ms. Staab argued that these expenses, including meals, lodging, and excursions, were authorized by the Board under the MAA’s broad powers and were necessary for networking and education that benefited the Authority. She contended that even if expenses were incurred by guests, she ultimately reimbursed the Authority.
Board Authority to Reimburse Limited by Ethics Act
The Commonwealth Court first tackled Ms. Staab’s argument that the Board’s authorization validated her actions. The court compared the MAA, which governs municipal authorities, to statutes governing townships and boroughs. These other statutes expressly detail what expenses—such as registration fees, mileage, and limited lodging/meals—are reimbursable for conference attendance.
The MAA, however, only contains a general grant of power in Section 5607(d)(17) to do things “necessary or convenient for the promotion of its business and the general welfare of the authority.”
The Court found this general power is not unlimited. Citing precedents emphasizing that public officials must be “cognizant of their expenses,” the Court concluded that the Board could not lawfully authorize reimbursement for all the types of expenses claimed by Ms. Staab.
Crucially, the Court held that expenses incurred by guests of Board members—such as baggage fees, meals, and sightseeing tours for family members—cannot legally promote the municipal authority’s business. This reasoning was bolstered by reviewing prior Ethics Commission decisions that disallowed similar expenditures for spouses and guests.
Conflict of Interest Requires Intent to Benefit
Ms. Staab also challenged the finding that her voting conduct constituted a conflict of interest under Section 1103(a) of the Ethics Act, which prohibits using one’s office for “private pecuniary benefit.”
Drawing upon the Pennsylvania Supreme Court’s decision in *Kistler v. State Ethics Commission*, the Commonwealth Court clarified that while strict criminal intent to violate the law is not required, a public official must be “consciously aware of a private pecuniary benefit” and then “take action… to attain that benefit.”
The Court found Ms. Staab satisfied this standard. She actively voted in favor of policies authorizing general expense reimbursement and later voted to approve the specific monthly financial reports containing her own improperly claimed expenses. This “directed action” showed an awareness of the potential benefit, making her actions a use of office for private gain, regardless of whether she knew the conduct broke the Ethics Act.
The Court distinguished this situation from cases where officials passively accepted prior entitlements. Here, Ms. Staab participated in creating and approving the mechanism that led to her reimbursement for disallowed items, such as early arrivals and guest expenses.
Substantial Evidence Review and Modification
The Court reviewed whether the Commission’s specific findings regarding which expenses were improper were supported by “substantial evidence”—evidence a reasonable person would find adequate to support a conclusion.
The Commission disallowed several categories of expenses, including hotel upgrades, baggage fees for her daughter, and expenses for arriving two or more days early for conferences when the main exhibitions hadn’t opened. The Court found substantial evidence supported these findings, noting that Ms. Staab often made travel arrangements herself and failed to adequately review the bills before voting for approval.
However, the Court did grant a modification to the restitution amount. The Commission had assessed Ms. Staab for certain group meal and sightseeing charges during the 2017 WEFTEC that were attributed to a guest. The Court found no substantial evidence in the record indicating Ms. Staab had invited a guest to that specific conference. Consequently, the Court ordered the restitution amount be reduced by $140.01.
Deficient Financial Filings Upheld
Regarding the Statements of Financial Interests (SFIs), Ms. Staab argued that any deficiencies were corrected and the maximum statutory penalty ($1,250 total, or $250 for five years) was unreasonable.
The Court noted that Ms. Staab had *admitted* in her Answer to the Investigative Complaint that her SFIs for 2016 through 2020 were deficient, failing to disclose required details about creditors and employment positions. These admissions bind the Commission.
The Commission imposed the maximum penalty because Ms. Staab’s repeated filings, even amended ones, showed a “pattern of disregard for the filing requirements.” The Court found the Commission acted within its statutory authority to impose this penalty based on the repeated nature of the violations.
In conclusion, the Commonwealth Court affirmed the Ethics Commission’s Final Adjudication in almost all respects, modifying only the restitution amount related to unproven guest expenses from the 2017 WEFTEC.