Recent News in Political Pensions: Rudy Giuliani, Ed Burke, and More
Who has a pension? Who doesn't have them? Who should have them? Who shouldn't?
I noticed a theme lately: politicians having or not having pensions after running into legal and financial trouble.
Ed Burke: Corrupt, but still has his pension
For now.
Chicago Sun-Times: Ed Burke is still in line for millions in payouts from pension, campaign funds after corruption conviction
Under Illinois law, former Ald. Edward M. Burke is likely to be stripped of the $8,027-a-month city pension he started collecting last May on the day after ending his record 54-year reign in the Chicago City Council.
Two weeks after a jury convicted him of racketeering, bribery and attempted extortion, officials with the Municipal Employees’ Annuity and Benefit Fund of Chicago won’t say when — or even whether — they will revoke his benefits.
No matter. He will get at least the $540,000-plus that he paid into the fund, which covers most city workers other than firefighters, police officers and laborers, pension records show.
The disgraced former council dean is in line for a more substantial payout from his campaign fund, which he can use to pay himself or his family members almost $2.5 million, no questions asked, thanks to a loophole in state campaign-finance law.
Burke, now 80, is scheduled for sentencing in June.
I will just step over the campaign fund issue.
Alderman Ed Burke of Chicago’s corruption involved many things, but here is a bit from when the jury’s verdict came down in December:
Burke attempted to extort money from the Field Museum for the benefit of a close family friend. In another scheme, Burke attempted to extort the owners of a Burger King in his 14th Ward to steer tax appeal business to his private law firm.
But the heart of the government's case centered around the Old Post Office. He was found guilty of using his public position to shake down the Old Post developers to use his law firm. Former alderman-turned-government mole Danny Solis secretly recorded Burke several times discussing the scheme.
As is usual with these Chicago/Illinois political corruption cases, it was a federal criminal prosecution.
As per this Reason piece from 2020, not all states have laws or regulations in place when public employees are convicted of crimes, as to what happens with their pensions: What Happens to Taxpayer-Funded Pensions When Public Officials Are Convicted of Crimes?
Across the country, 30 states have some sort of public pension garnishment or forfeiture laws. Of those 30, only 15 states will revoke or garnish an employee’s pension benefit if he or she is convicted of a felony related to their misconduct on the job (Figure 1).
The other 15 states with public pension garnishment or forfeiture laws will only revoke a public employee’s pension benefits, including police officers, for what are considered “financial crimes” such as fraud, embezzlement, theft, and bribery.
The piece from Reason has detailed explanations of the policies, for states that had any. That was as of July 2020. I do notice that some of the most corrupt states (-cough- New Jersey and Illinois) have such policies.
Who decides whether the pension gets yanked?
This document from NASRA has data as of September 2022 as I link it. Here is the language for Illinois from that document:
No public pension benefits “shall be paid to any person, any person who otherwise would receive a survivor benefit, who is convicted of any felony relating to or arising out of or in connection with his or her service as a member.” The trustees of each pension fund make the determination if the felony plea of conviction of the member met this standard. Those convicted of a felony may receive their contributions.
But I do wonder how often pensions are forfeited. That would be useful to know.
The Chicago MEABF trustees might be in a tight spot on this one, but we’ll see. Chicago aldermen have a storied tradition of getting arrested (and maybe convicted) on corruption charges.
In New York, according to the NASRA document, trustees aren’t put in the hot seat:
For crimes committed on or after 1/1/18, a judge may strip or reduce the pension of a public official convicted of a felony related to their official duties. Public official is defined as any elected official, state official appointed by the governor, judge and certain employees involved in policy making. For crimes committed prior to the effective date, those convicted of a felony related to their public office who entered the public retirement system after Nov. 12, 2011, can have their pensions stripped.
I assume there’s some sort of process whereby somebody has to file for this to go through, and maybe it’s the trustees. But it’s ultimately not their decision.
Rudy Giuliani: No government pension? Of any sort?
NY Post: Bankrupt ex-Mayor Rudy Giuliani regrets not having a NYC pension
Former Mayor Rudy Giuliani, who filed for bankruptcy in the wake of a $148 million civil court ruling and faces a mountain of unpaid legal bills, said he now regrets not having the safety net of a government pension.
Most recent Big Apple mayors pocket pension checks after leaving office, but Giuliani, 79, failed to apply for the benefits, according to city payroll records obtained by the taxpayer watchdog group Empire Center for Public Policy and his official disclosure filings.
Had he taken a pension, the two-term former mayor who left office at the end of 2001 would’ve been eligible for about $26,000 in annual payments after turning 62.
That translates to about $442,000 he could have collected the last 17 years.
When asked why he never applied for a pension, Giuliani told The Post: “Giving back to the city I love. Although I would like to take it now.”
Well, he hasn’t yet been convicted of a felony (related to his official duties as mayor of NYC).
It seems to me he can start taking pension benefits related to his mayoral service now.
So…..
He then admitted, “I don’t know how to go about it.”
How about start here: City Worker or Retiree Benefits
[Ok, given his prominence, there is probably somebody he should call directly]
Empire Center of NY and See Through NY
I noticed that the Empire Center was involved, and I’m not surprised. They have this website: See Through NY, which has information such as pensions and salaries of public employees.
For example, ex-Mayor David Dinkins had a pension. He died in 2020, but they have the record:
Not sure why there is a data point for 2009 and then 2016. It looks like he took only a partial payment in 2016, so maybe for some reason, he suspended payments from 2010 through the very beginning of 2016. Maybe working for Obama?
Diblasio is taking his mayoral pension, too:
Maybe Rudy can call him.
Okay, but seriously, somebody should be able to get Rudy set up.
Government pensions are valuable, if modest
“This might have seemed like chump change to someone like him who left City Hall with multi-million-dollar book deals, but I bet he wishes he had [pension payments] now,” said the official. “In his situation, every penny helps.”
Well, let’s see. Mayor wasn’t Rudy’s only job.
Before he was mayor, he was a federal prosecutor. Those guys have federal pensions.
But maybe he never vested. Often, with government jobs, you have to work at those places for at least 10 years before you get any money in retirement benefits that you didn’t put in yourself.
In the private sector, they are required via ERISA to vest much more rapidly than that. (It’s complicated, people get paid to explain this sort of thing, and you can read this document from the Department of Labor.)
A lot of people with government experience may have a rude awakening to find they have a lot less in legal protections than those in the private sector, as they assume their protection is in political power.
The point about having a pension, whether public or private in source, is that in bankruptcy it’s generally untouchable by creditors.
Heck, in lawsuits in general, it’s not touchable, as Nicole Simpson.’s parents found out.
So even if it were only $100K/year, it’s not nothing!
Rudy, go pick up the phone and call Bill!