Two ex-judges denied pensions

WILKES-BARRE – Former Luzerne County judges Mark Ciavarella and Michael Conahan are not entitled to their pensions and could be liable to reimburse the state $4.3 million for higher juvenile placement costs it says are tied to the kickback scheme the jurists engaged in, the State Employees’ Retirement System has determined.

Nicholas Maiale, chairman of SERS, sent a letter to two state legislators on Monday advising them that the agency has determined the judges have forfeited their right to their pensions based on their Feb. 12 guilty pleas to federal charges of tax evasion and depriving the public of their honest services.

The state Department of Public Welfare has also filed a complaint with SERS against the judges’ pensions. That complaint seeks to recover higher costs DPW alleges it paid to house juveniles at the PA Child Care juvenile detention center rather than the county-owned facility that was closed by Conahan in 2002.

Federal prosecutors allege Conahan and Ciavarella conspired to close the county facility in order to pave the way for the opening of PA Child Care in Pittston Township, which was once co-owned by Butler Township attorney Robert Powell.

Powell last week signed a plea agreement in which he admits he and the center’s builder, Robert Mericle, paid more than $2.6 million in kickbacks to the judges in exchange for rulings that benefited the center and a sister facility, Western PA Child Care in Butler County.

Ciavarella’s attorney, Al Flora, said Monday that Ciavarella intends to appeal the SERS ruling. He will also contest DPW’s claim.

“They say (the judges’) actions resulted in DPW paying a higher rate for the detention of juveniles than it would have had the county facility not been closed. How did they determine it was a higher rate? How did they determine the old facility should not have been closed? How did they determine Mark was even involved in the negotiation on those rates? I have no idea,” Flora said.

Conahan’s attorney, Philip Gelso, declined to comment on whether Conahan will appeal.

SERS previously estimated Ciavarella, who has not received any payments, had earned a monthly pension benefit of $5,156.11. He had also sought to withdraw $128,652.64 of contributions he made and $51,699.29 in interest those contributions earned.

Conahan, who retired Jan. 15, 2008, has been collecting $8,073.87 per month, according to SERS. His most recent payment, received in April, will be his last, Maiale said. In addition, Maiale said SERS will try to recover the monthly payments Conahan received after his guilty plea.

Robert Gentzel, spokesman for SERS, said the agency cannot seek to recoup payments Conahan received before his guilty plea because he had not yet been charged with a crime.

Under state pension law, known as Act 140, a person convicted of certain state crimes related to their public employment can be forced to forfeit their pension. The money stays within the pension fund for its benefit. Persons charged with federal offenses are also subject to forfeiture if the crime is deemed to be “substantially similar” to state crimes listed under the act.

Maiale said SERS has determined Conahan’s and Ciavarella’s crimes are substantially similar to the state law crimes. He cautioned that that determination could be overturned on appeal.

State Sen. Lisa Baker, R-Lehman Township, and state Rep. John Yudichak, D-Nanticoke, wrote to SERS in April, asking officials to freeze the judges’ pensions in light of their guilty pleas.

Yudichak said he was pleased that the bipartisan effort he and Baker put forward was successful.

“There is no way a public official who pleads guilty should be allowed to enjoy the benefits of a public pension on taxpayers’ backs,” Yudichak said. “The two most important things we can do going forward is to hold those who plead guilty to public corruption accountable and to ensure taxpayers are protected. This decision does both of those things.”

Maiale had initially advised the legislators that SERS was reviewing the cases, but could not act until after the judges were sentenced. That determination was based on the belief that a conviction does not become official until the defendant is sentenced.

Since then, SERS consulted with outside counsel, who advised the agency it believes the law regarding pension forfeiture is triggered when a guilty plea is entered.

“Our past practice was not without legal support,” Maiale said in his letter to Baker and Yudichak, “but we are now persuaded that forfeiture when the plea is entered represents the better reading of the law.”

Flora said he does not agree with that interpretation. That will likely be the basis of the appeal. Ciavarella will also challenge the withholding of his contributions.

Normally any person convicted of an offense that results in the forfeiture of their pension is entitled to recoup money he or she paid into the system.

SERS has decided to hold on to Ciavarella’s contributions and interest because it could be subject to pay off the DPW claim should the agency prevail, Maiale said.

Conahan previously received a lump sum payment of $302,777.09 of his contributions and interest. DPW has no claim with SERS against those funds because SERS no longer has the money, Gentzel said. It could seek to recover the money through other civil means, however.

DPW could also seek to recoup the money from future pension payments should Conahan prevail on an appeal of the agency’s determination that he committed a forfeitable offense, Gentzel said.

Terrie Morgan-Besecker, a Times Leader staff writer, may be reached at 570-829-7179.

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Ciavarella, Conahan may have to pay state $4.3M

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