Sentenced to prison, Alabama state employees collect millions from pension funds www.privateofficer.com
Birmingham AL. Nov 28 2010 Former two-year college Chancellor Roy Johnson begins serving a 6½-year prison sentence for bribery, conspiracy and other federal corruption charges next month, but he’ll still be getting paid by the state.
Johnson and the state of Alabama contributed to his pension as he worked about 20 years in state education. He’s now drawing $132,000 a year from the Alabama teacher retirement system, a state retirement official said.
Johnson isn’t the only former public official or employee in Alabama in line to collect a government pension after being charged, convicted, or having pleaded guilty to public corruption charges.
Twenty former public employees who either committed crimes or are charged with crimes while on the job are due to receive more than $1 million a year in pension payments before taxes or other deductions, according to records provided by the Retirement Systems of Alabama, the General Retirement System of Jefferson County and federal court.
In at least two cases, the federal government has garnished up to a quarter of the pension amounts following sentences resulting from probes into the state’s two-year college system and Jefferson County’s sewer system. The federal government also is asking for garnishment of one other pension.
Birmingham lawyer Bart Slawson said the state Legislature or County Commission should attempt to get the pension obligations canceled for people who committed crimes for personal gain working for two-year colleges or Jefferson County.
Slawson represents a group that won an environmental lawsuit to force Jefferson County to fix its leaky sewer system. The work resulting from lawsuit settlement became the central focus of the county sewer corruption scandal.
“They don’t deserve them (the pensions) and they should be disgorged as unjust enrichment,” he said.
Among the long-standing ideals for pensions is that you provide your employer with loyal and valuable service, “not committing illegal acts to damage your employer, and that’s exactly what these guys did,” Slawson said.
Don Yancey RSA’s director of benefits, said if an employee works at an institution and makes contributions, they can get their pension once they meet eligibility requirements. “A criminal conviction does not do anything to eliminate a person’s eligibility for a pension if they’ve earned a pension,” Yancey said. “It doesn’t matter whether that offense was related to your job.”
Under the RSA’s teacher retirement plan, employees like those convicted in the two-year college scandal contribute 5 percent of their pay to their pensions. The amount that the state contributes each year varies but is currently equivalent to currently 12.5 percent of the person’s salary, he said.
Under the Jefferson County system, each member contributes 6 percent of his or her compensation, according to the system’s attorney, Beth Beaube. The county matches that contribution.
Eight former two-year college employees who were either convicted or pleaded guilty in the federal investigation get pensions ranging from $11,005 to $1,032, or about $440,000 a year combined, from the state retirement system.
Johnson gets the most, $11,005 a month, and will continue getting it while in prison. Former state Rep. Sue Schmitz draws the smallest pension, $1,032 a month.
Five people who committed crimes in the Jefferson County sewer scandal collect pensions ranging from $3,805 to $2,174, for a total of about $240,000 a year, from the county’s retirement system. Two other former county employees who pleaded guilty in the sewer scandal — Harry T. Chandler and Donald R. Ellis — will be eligible for pensions when they turn 60, according to county pension system records.
Chandler, Jefferson County’s former assistant director of environmental services, will get $5,140 a month. Ellis, the environmental department’s former senior civil engineer, will get $2,526 a month.
Two officials covered by the Jefferson County retirement system and convicted in the sewer scandal elected to get a refund of their own retirement contributions when they left the county’s employment, the records show. They will not be get a county pension.
Former Jefferson County Commissioner Larry Langford got a refund of $21,076 and former employee Ronald K. Wilson collected a refund of $29,322, according to the retirement system. Langford is now serving a 15-year prison term on public corruption charges. Wilson was sentenced to 13 months in prison.
Courts and prosecutors do have a way to take part of the pensions of people convicted of crimes.
A court order is required to allow the government to take part of a person’s pension to pay toward court-ordered fines and restitution. The Consumer Credit Protection Act limits the garnishment of wages to 25 percent of a pension, except in certain circumstances including child support
In one case in the two-year college probe, former state Rep. Sue Schmitz had her retirement credit taken away for her work with a state program for troubled youths after her conviction, Yancey said. She had been convicted of charges relating to a no-show job with that program.
Schmitz kept her retirement credit for her career as a public school teacher, Yancey said.
Federal prosecutors have garnished up to 25 percent of the monthly pensions of a few of the convicted officials pension to repay court ordered fines, or restitution.
Those who have had wages garnished in the two-year college or sewer scandals include:
Jack Swann, former head of the Jefferson County sewer department, who had his $6,928 gross monthly pension garnished at a rate of 25 percent by federal prosecutors.
Robert Nix, former deputy director of the Alabama Fire College, has a garnishment of $928 a month off his $4,394 a month pension, also about 25 percent.
The U.S. Attorney’s Office also has asked to garnish the $2,198 a month pension of former Jefferson County Commissioner Chris McNair. The garnishment has not been finalized, said McNair’s attorney Doug Jones.
Federal prosecutors have not sought to garnish the pension of Johnson, who has been ordered to pay $18.2 million in forfeiture and give up his house in Opelika.
Peggy Sanford, spokeswoman for the U.S. Attorneys Office, said it’s premature to comment on what steps may be necessary to collect forfeiture in the Johnson case.