Provides that a member shall forfeit retirement rights and benefits if convicted of certain crimes related to public employment; repealer

Summary of provisions

This bill would amend the Retirement and social Security Law to establish procedures to be followed by a prosecutor to seek and a supreme court to order in order for a public employee convicted of misconduct with a nexus to their public employment to forfeit all or a portion of their pension. Procedural protections for the parties including dependents are also provided.

Justification

New York's retirement systems at all levels of govern- ment should be explicitly based on the principle that the faithful and honest performance of a public employee's official duties is as much a precondition to eligibility for a pension as fulfilling the existing statutory age and length of service requirements. A public servant who, by engaging in serious criminal misconduct, abuses the power of office and violates the fiduciary duty owed to the public relinquishes any claim to a pension financed by the tax. paying citizens of this state.

New York State presently has no policy allowing the forfeiture of pension benefits by a public official who has been convicted of a crime. Despite the serious nature of the breach of public trust occasioned by the offense and despite the clearly proven or admitted abuse of one's public office. no forfeiture penalty has ever been imposed.

A conviction of a crime related to the betrayal of public trust carries with it no consequence in their entitlement to public monies in the form of a pension. This is a gross misuse of public monies.

Currently there are corrupt public officials who are receiving or continue to be eligible for their taxpayer funded pensions . They include the following

* A former mayor of a large upstate city who pleaded guilty to federal racketeering charges and extorting at least $1.2 million from contrac- tors doing business with the city during his 16 years in office.

* At least two supreme court justices convicted of taking bribes for fixing cases and one former administrative judge for one of the largest counties in the state convicted of perjury after an investigation into extortion involving cable television franchises.

* A former superintendent of a major metropolitan area's sanitation Department's Bureau of Waste Management who pleaded guilty to three counts of federal racketeering for accepting over $660,000 in bribes and payoffs. In addition, he allowed millions of gallons of hazardous and chemical waste to be dumped in municipal solid waste landfills.

* A former deputy director of the a major metropolitan area's Department of General Services who pleaded guilty to federal racketeering charges of extorting over a million dollars from building owners seeking to lease space to the city and was sentenced to 12 years in prison.

* A former Housing Authority supervisor convicted in a federal bribery and extortion probe and sentenced to 5 years in prison and a fine of $55,000, together with the conviction of 23 Housing Authority employees for job-related crimes.

* A former fiscal administrator for a major metropolitan area's Depart- ment of Health's Maternal, Infant and Reproductive Health program who embezzled nearly $200,000 from taxpayers through fraudulent payments to a bogus catering company he created and for taking kickbacks from contractors.

* Former state legislators convicted under federal law for using their state office for private gain.

In the public sector, pensions are not merely a form of deferred compen- sation. They are a "reward for faithfulness to duty and honesty of performance."

The purpose of this pension forfeiture statute is to prevent the bestow- ing of public tax dollars upon an employee who has broken faith with the public and breached in a significant way the fiduciary duty owed to the citizens of the state.

Five other states -- Pennsylvania, Florida, Georgia, Illinois and Massa- chusetts -- have all enacted pension forfeiture statues which recognize that loyal, honest public service is an essential prerequisite to pension eligibility. In these five states, criminal misconduct related to a public employee's official duties operates to sever the employee's claim to a taxpayer-financed pension.

Legislative history

3/5/11 Referred to Civil Service and Pensions 2/14/12 Recommit, Enacting Clause Stricken

Fiscal implications

This bill would save future taxpayer dollars by decreasing the fiscal obligations of the retirement systems in these situations.

Effective date

This act would only apply to all retirement system members who join on or after such effective date. It will take effect immediately.