Monday, April 13, 2015

Crime sometimes pays with state pensions

Posted: Monday, April 13, 2015
When a 40-year state pension is at risk, not all crimes are treated as equal in Pennsylvania.
In 2013, former Bensalem School District head mechanic and shop foreman Frederick Lange — a 41-year district employee — pleaded guilty in Bucks County Court to felony charges of theft by unlawful taking and conspiracy for stealing district-owned tires, batteries and other auto supplies over at least a 10-year period.
He lost his job, but kept his full state pension.
The reason, according to state Rep. Scott Petri, R-178, of Upper Makefield, Lange’s felonies are not on a list of theft-related crimes that result in a Pennsylvania public worker being forced to forfeit the taxpayer-funded part of his pension.
Rep. Scott Petri
Petri wants to change that. He has proposed House Bill 17, which the House Judiciary Committee is scheduled to vote on Tuesday.
The bill would close a loophole that allowed Lange and other public employees in Pennsylvania convicted of felonies to keep their full pensions.
If voted out of the committee, the bill would be scheduled for a vote on the House floor.
But even if Petri’s bill is signed into law, it would not address other loopholes in the law that allow public employees to collect full interest on their pension contributions or avoid forfeiture altogether if they withdraw the money before a conviction or plea.
At least 18 Bucks and Montgomery county public employees charged in theft or sex scandals related to their jobs since 2004 have kept their full pensions after they were either convicted or accepted into a first-time offender program, according to state data. They include most of the 14 Bensalem school employees or retirees, like Lange, who faced charges in dual corruption probes involving the theft of district-owned auto supplies and ghost employees in the grounds-keeping department.
The 1978 law known as Act 140 strips most Pennsylvania public employees and officials of their publicly funded portion of a pension if they are convicted or plead guilty/no contest to crimes connected to their jobs.
The list of 27 crimes covered under the law includes theft by deception, theft by extortion, theft of services and theft by failure to make required disposition of funds received. Also included in the forfeiture list areseven sex crimes involving students. The law also includes felony offenses that are “substantially” similar to the listed crimes.
A public employee in the state can also be forced to give up individual pension contributions under the law if a court decides the money must be used to pay court costs, fines and restitution associated with a conviction related to his or her job.
Since 2004, 84 Public School Employees Retirement System (PSERS) members in the state had their pensions forfeited including at least eight from Bucks and eastern Montgomery county school districts, according to a PSERS spokeswoman.
Between 2009 and 2014, 72 Pennsylvania State Employees Retirement System (SERS) members lost the publicly funded portions of their pensions following criminal convictions that fall under Act 140. They include state workers, state police, judges, lawmakers and State System of Higher Education members.
An additional five SERS members also forfeited their pension contributions during that time span under the judicial forfeiture provisions. No county breakdowns are available.
State judiciary members also face additional provisions for forfeiture including if the member is suspended, removed or barred from holding judicial office for a conviction of a felony, misconduct in office or conduct that prejudices the proper administration of justice or brings the judicial office into disrepute, SERS spokeswoman Pamela Hile said.
‘TOO EASY’
Locally, former longtime Bucks County Register of Wills Barbara Reilly, her second deputy, Rebecca Kiefer, and employee Candace Quinn were stripped of the publicly funded portion of their pensions in 2013. The women were among four people who pleaded guilty to forcing office staff to work the polls for Republican candidates on election day and giving them off-the-books compensatory time.
At her sentencing, Kiefer said that the pension match cost her $300,000, according to reports.
Five of eight former Bucks or Montgomery county teachers convicted of engaging in sexual conduct with students since 2004 also lost the state portion of their pensions. The three ex-teachers who kept their full pensions were convicted of corruption of minors or child endangerment, which are not on the forfeiture list.
Robert McCord
Petri, a former House Ethics Committee chairman, said his motivation to close one of the law’s loopholes, in part, stems from cases like that of former state treasurer Robert McCord. The Montgomery County Democrat pleaded guilty in February to two felony charges of attempted extortion, which is not on the list. The plea deal allowed him to keep his full state pension.
“It’s too easy for a prosecutor to make a deal for someone (with a crime) that is not on the list,” Petri said. “The game is you say, ‘OK, let’s pick something not on that (Act 140) list ... I’m a 30-years employee.’ ”
Under his proposed legislation, any criminal offense classified as a felony or one punishable by a prison term exceeding five years would be included as an offense that would result in forfeiture of the public portion and interest on a state pension if there’s a conviction. His bill also would add magisterial district judges as being covered under the law.
As with the current law, the worker would need to be convicted of a crime related to public office or their public employment; a conviction would include a guilty or no contest plea.
In researching his legislation, Petri said he found most states include felonies involving a public employee’s job as an offense that would result in forfeiture of the state portion of a pension.
Under the legislation, a public employee’s benefits would be immediately forfeited as soon as a plea of guilty or no contest or a guilty determination is made and would require the court to notify the pension plans.
“Many times we found the plan doesn’t know — unless someone tells them or they read an article — that someone has been convicted,” Petri said.
His bill also includes language ensuring that all public pension benefit systems funnel forfeited money first to victims in cases involving restitution orders, and then, whatever is left, into government coffers.
Petri said that he has a second version of his amendment that would include all crimes committed involving a state employee’s office or job, but he doesn’t believe that one would get lawmaker support.
TRUST INTERRUPTED
While Petri’s bill includes any felony and crimes punishable by a prison sentence of more than five years, it does not prevent prosecutors from negotiating guilty pleas for lesser offenses, including ones that would not be covered under Act 140, the lawmaker said. He didn’t want to tie the hands of district attorneys to negotiate deals when they believe they are appropriate, Petri said.
That kind of negotiation appears to be how two high-ranking former Bensalem School District administrators — among 14 district employees either convicted or entered into a special probation program in the 2013 theft probes — kept their pensions. Only three former district employees lost part of their pensions when they were convicted of crimes that fell under the forfeiture law, according to PSERS records.
Business Manager Jack Myers
Former business manager Jack Myers, who had nearly 41 years vested in his state pension, was initially charged with misapplication of entrusted property and property of government or financial institutions, a crime covered in the forfeiture law. But he was accepted into a special probation program for first-time nonviolent offenders, so he got to keep his full pension, according to Evelyn White, a PSERS spokeswoman.
Former Bensalem director of facilities, Robert Moseley, who had worked for the district since 1994, was also initially charged with misapplication of entrusted property and property of government or financial institutions. But after Moseley’s case reached the Court of Common Pleas, the charge was changed to theft by unlawful taking, which is not covered under the forfeiture law. He pleaded no contest, meaning he didn’t admit guilt but acknowledged that prosecutors had enough evidence to convict.
Another way employees get around the law is by withdrawing the lump sum of their pension contributions — including interest — either before pleading guilty or a conviction, according to PSERS. And retired state employees charged with a crime can continue collecting full retirement benefits, if they meet normal eligibility, up until a guilty plea or conviction. After a conviction, they would lose the publicly funded portion of the benefit and the interest on that money.

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