Peter E. Bortner
Nov 07, 2009 (Republican and Herald - McClatchy-Tribune Information Services via COMTEX) --

A Frackville borough councilman twice violated state law in financial dealings involving insurance and pension funds, the state Ethics Commission has ruled.

In a 39-page ruling made public this week, the commission ruled Stephen Bobiak must pay $4,500 as part of his consent agreement to settle two violations of the Public Official and Employee Ethics Act.

"A violation ... occurred when Bobiak authorized and/or participated in decisions of the Borough to name a business with which he is associated, Goal Line Financial, as the Borough's broker/agent of record for insurance matters," the commission wrote. "A violation ... occurred when Bobiak authorized the placements of funds from a Borough workers' pension account and Borough account to a business with which he is associated."

Bobiak, who did not run for re-election this year, said Friday that the borough lost no money in either situation and he never intended to hurt anyone.

"I did it wrong but unknowingly," he said of the pension problem. "I reversed the entire process at no cost to the borough."

As for the insurance situation, Bobiak said that also cost the borough no money.

"It cost the taxpayers nothing," he said.

The commission decided Bobiak should not have placed money from the pension account of borough Public Works Director Joseph Conapinski into accounts with EquiTrust Life Insurance Co., with which he did business, but should have placed it in the Pennsylvania Municipal Retirement System as required by a borough ordinance.

Bobiak received commissions on those transactions, which would not have occurred if the money been invested in the state system, the commission wrote.

Bobiak said he was not told the money had to go into the state system, that Conapinski had asked him to invest the money and that Conapinski made more money than he would have if the money had been invested in the state system.

Bobiak said EquiTrust already has deducted the commissions paid to him for the transactions.

With respect to the other violation, the commission ruled Bobiak should not have named Goal Line Financial Group Inc., of which he is president, as agent of record for the borough's account with Capital Blue Cross.

Bobiak said Goal Line became the agent only after the previous one, Charles Backes, was unable to do so for a time and that it did not cost the borough any money, since the premium on its health insurance policy stayed the same.

"There was no extra fee," he said. "Having a service representative is an asset."

He said he is paying the $4,500; under the terms of the agreement, payment of that money will close the commission's case against Bobiak without further action.

The borough filed a lawsuit on July 31, 2008, in the county court against Bobiak. That lawsuit has not been resolved.

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