Public Pensions: Guaranteed Money For Wrongdoers

Dave Mead, the defendant, admitted to an investigator that he embezzled thousands of dollars from the city of Anacortes. But that didn't stop Dave Mead, the assistant police chief, from receiving his regular city paycheck.

Although he confessed to the crime in September, Mead will continue drawing his $4,000-a-month salary until February. Then he will go on disability retirement, the result of an asthma condition and other problems he says were aggravated by the stress of the probe of his pilfering.

Once he retires, Mead will get 60 percent of his salary until his two children are grown and then 50 percent for the rest of his life - tax free - plus free medical care and nursing-home benefits. If his wife outlives him, she will get the money until she dies.

Mead is not alone. Several other wrongdoers, or their survivors, are on the state gravy train for life because Washington - unlike some states - has no statute allowing for forfeiture of a public pension.

Without such a law, the courts have treated public pensions as an inalienable right - whether the recipient is a felonious governor, mayor, police officer or street sweeper.

While the vast majority of public servants are honest, the following weren't, and for them crime still pays every month:

-- George Janovich of Gig Harbor, the former Pierce County sheriff who accepted a bribe and protected a gang of topless-tavern owners from arrest for illegal gambling and prostitution. He has been receiving his pension - a regular one based on longevity rather than disability - for about 15 years, including the five years he spent in federal prison.

"I'm entitled to it," said Janovich, who claims he was framed. "If somebody doesn't like it, I'm sorry."

-- King County police officer Richard Bartlett, a racketeer who threatened to bomb Longacres racetrack unless its operator paid him a million dollars in extortion money. He already had disability benefits when he committed the crimes and continued to get checks until he died. Now his wife receives the money.

-- M.E. "Buzz" Cook, the former assistant Seattle police chief convicted of bribery and corruption in the early 1970s. He receives a regular pension check every month.

The Mead case in Anacortes illustrates how Washington's law works: well for the lawbreaker, not so well for the taxpaying public.

Mead's deal of a lifetime was practically choreographed for the 46-year-old police official from the moment the city discovered $15,000 was missing from a drug-buy fund entrusted to his custody.

Although taxpayers provide more than 90 percent of Mead's retirement, in a program that costs the state $165 million a year, state law leaves organizations like the Skagit County retirement board no choice but to grant a crooked officer his money.

The Anacortes mayor couldn't fire Mead even though the officer lied to investigators repeatedly before admitting his wrongdoing, because Mead would reach retirement before the long, expensive civil-service process, required by law, was over.

And because he has been on sick leave since January, shortly before an auditor discovered the money was missing, the 24-year veteran hasn't done any work for the city all year. Yet he was guaranteed a handsome early retirement when the retirement board granted him disability leave last month.

The definition of disability is so liberal that Mead and others like him can qualify by simply showing they can't do an average job.

In 11 other states, wrongdoers like Mead, Janovich, Bartlett and Cook would have lost their pensions or seen them substantially reduced.

Arizona, Florida, Georgia, Illinois, Massachusetts, Michigan, New Jersey, Oklahoma, Pennsylvania, Tennessee and West Virginia have laws providing for forfeiture of a public employee's pension when a person commits a crime against their employer. Kentucky has a similar statute, but a loophole allows wrongdoers to keep their pensions if they retire before trial - which all have done. In Virginia, state officials could deny crooked officers their disability pension, but not the regular pension based on their length of service.

All other states are like Washington in that there is no way to take away a pension.

This disturbs Bill Stephens, president of the National Association of Public Pension Attorneys. His organization has argued in court that corrupt public officials should forfeit their pensions even if a state lacks a law requiring it, because such employees have violated a public trust and because their retirement usually is financed mostly by taxpayers.

The courts have usually disagreed - with the exception of the Rhode Island Supreme Court, which took away a corrupt judge's $98,000-a-year pension last year, without a forfeiture law, saying "honorable service is a necessary prerequisite" to an honorable retirement.

But in Washington, the courts have taken a more traditional stance. And given the way judges have ruled, a new forfeiture statute would cover only those public officials hired after it went into effect.

All non-government pensions are protected from seizure, regardless of the state, by a 1974 law passed by Congress partly in response to a case involving corrupt Teamsters union officials who stripped dissident union members of their pension rights.

A SERIES OF CASES

Retirement officials around the country say it usually takes a series of corruption cases to spur a legislature to act. West Virginia passed a pension-forfeiture law a decade ago in the wake of some scandals, and since then the state retirement board has stripped an ex-governor (Arch Moore Jr.), more than a half-dozen legislators and "at least one cop" of their pensions, said senior Assistant Attorney General Samuel Cook. Although Cook is unsure whether the penalty deters corruption, he likes the law.

"I have an objection to a person sitting in jail and receiving a state pension for anything," Cook said. "A public office is a public trust."

But in many states where pension-forfeiture laws have been proposed, like Utah and Maine, opponents argue that such laws would punish the family that depends on the retirement money as much as the offender.

Leading the opposition are public-employee unions. Mike Patrick, executive director of the Washington State Council of Police Officers, said although he is appalled by Mead's behavior, his organization could be counted on to fight pension-forfeiture legislation. Barbara Hegdal, a pension official in California, doubts anyone would sponsor such a law in her state because "the police and fire unions are so strong."

Mead was lucky to have joined the Anacortes Police Department in 1969. The Legislature had just granted police and firefighters the most generous retirement program in state history to attract people to high-risk and relatively low-paying jobs. Not only did it give them full retirement benefits at age 50, it also erased a 1937 statute that allowed for pension forfeiture when a public employee was convicted of a felony or was "a habitual drunkard."

The 1969 program also permitted police officers and firefighters to retire on disability by simply showing they were unable to do their job "with average efficiency." About 65 percent of those who retired under the program used that loophole. Officers with skiing injuries and damaged fingers have gotten disability benefits, although only service-related disability benefits are tax free.

By 1977, the cost of the program was becoming evident, so the Legislature eliminated the disability clause. Only a fraction of the officers hired since then have asked for the less-attractive state industrial-insurance disability program that was offered to them.

But the Legislature could not close the loophole for the thousands of officers and firefighters hired before the 1977 change. Some 5,850 retirees are getting benefits under the old system. Another 3,800 remain on the job who - like Mead - are eligible for the easy disability bailout.

MOUNTLAKE TERRACE CASE

Just how easy it is to qualify is underscored by the case of Mountlake Terrace police Officer Craig Beytebiere.

He was 34 when he was arrested in Oregon in 1989 for causing a head-on collision while driving an undercover police car, drunk. When Police Chief John Turner indicated he might fire Beytebiere, the officer took disability retirement instead, basing his application on "alcohol abuse and post-traumatic stress disorder," depression and anxiety.

Turner said the granting of disability retirement to Beytebiere was an "abuse of the system," but wasn't surprised. Robert Ward, the Oregon man in the car Beytebiere hit, says his wife still suffers health problems caused by the crash. Beytebiere is doing fine with his regular paycheck as a clerk at a local department store and his monthly disability checks. But, he says, "You don't realize the hell I went through" at the time the details of his accident hit the news.

But his case is not exceptional. In 1989 an appeals court upheld disability retirement for a Spokane narcotics officer who became addicted to cocaine. In 1992 the court upheld retirement for a King County desk sergeant who complained of aches and pains aggravated by a class in hair-pulling techniques he attended in 1984.

Mead's indictment for first-degree theft late last month no doubt has increased his stress level. But the asthma he claims as a service-related disability is an illness he already had when the city of Anacortes hired him as a rookie officer.

Pat Beatie, the city's newly hired director of public safety, is angry that Mead will get disability benefits. He said Mead did a "terrible job" as assistant chief, helping give the department a reputation for bungling homicide investigations and for internal squabbling.

"In this case, the guy not only did not do his job appropriately, but he was stealing while he was doing so," Beatie said. "The guy was a crook while he was earning disability."

Police and firefighter organizations successfully lobbied the Legislature this year to loosen the pension system by reducing retirement age - which was raised in 1977 to 58 - back down to 55. This year they are asking for an even lower age, and other concessions.

If the Legislature were to take this opportunity to negotiate a forefeiture clause, there are several models. In most states where pensions are forfeited, the crime must have something to do with the public servant's job, and it must be a serious felony. Money the wrongdoer contributed to the fund is refunded.

LAWS VARY WIDELY

Details of such laws vary widely from state to state.

In Michigan, local retirement boards decide whether to take away a pension, and that creates inequities. When former state trooper Paul Getzen was convicted of smuggling illegal drug-making chemicals into the U.S., his pension was revoked.

On the other hand, when former Detroit Police Chief William Hart stole $2.3 million from a police secret-service fund, the city pension board granted him his $53,000-a-year annuity. (The sentencing judge did, however, order Hart to repay the money he stole).

But in Illinois, any official who commits a felony associated with their job automatically loses a pension.

"Our law has been on the books since the mid-1950s, and it is used all the time," said Kathy O'Brien, staff attorney for the Illinois Municipal Retirement Fund. She notes, however, that the law might be a better deterrent if public officials were aware of it.

"Unfortunately, a lot of our public employees are ignorant to this law," O'Brien said. "It is a shock to them to find out after the fact that they are going to lose their pension."