Only conviction, guilty plea would stop the flow of cash

Last updated: January 09. 2014 11:43AM - 2541 Views
By - rdupuis@civitasmedia.com

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Key pension points

• Regarding legislative compensation, Article II, Section 8 of the Pennsylvania Constitution says: “The members of the General Assembly shall receive such salary and mileage for regular and special sessions as shall be fixed by law, and no other compensation whatever, whether for service upon committee or otherwise. No member of either House shall during the term for which he may have been elected, receive any increase of salary, or mileage, under any law passed during such term.”

• State law says that a public employee’s pension is forfeited if he or she “commits certain crimes that breach the member’s duty of faithful and honest public service.” A conviction or guilty plea is required to trigger forfeiture.

• State law does not require previously paid pension benefits to be re-paid, but it does end any future payments.

• The recipient may, however, withdraw contributions paid into the fund, but the law requires they be used to pay fines and restitution associated with the criminal conviction.

Mericle sentencing scheduled

Real Estate developer Robert K. Mericle is scheduled to be sentenced Feb. 26 in U.S. District Court, Scranton, on a charge of withholding information in the Luzerne County judicial corruption scandal.

Mericle, 50, of Shavertown, pleaded guilty to the charge in September 2009. His sentence has been delayed due to his cooperation under a plea agreement in other cases, including former state Sen. Raphael Musto.

Federal prosecutors alleged that Mericle, at the request of former Luzerne County Judge Mark Ciavarella, paid Robert Powell a finder’s fee, about $1 million, for assistance in helping to obtain a contract to build the PA Child Care juvenile detention center in Pittston Township.

Powell in return paid Ciavarella and former county Judge Michael Conahan the finder’s fee. Prosecutors said the two judges disguised the source of the income from Mericle.

Ciavarella was convicted in February 2011 of 12 counts related to his acceptance of $1 million from Mericle, and sentenced to 28 years in prison. Conahan pleaded guilty to racketeering conspiracy and was sentenced in September 2011 to 17 1/2 years in prison.

Musto, 84, of Pittston Township, had his trial continued indefinitely on Tuesday when U.S. District Court Judge A. Richard Caputo ruled he is mentally incompetent. Musto was accused of accepting $25,000 from a construction company for various projects in Luzerne and Lackawanna counties. Musto’s lawyers identified the company as Mericle.

On Dec. 16, 2010, recently retired state Sen. Raphael Musto pleaded not guilty to federal corruption charges.

The very next day, the State Employees Retirement System began paying the longtime lawmaker his $127,032 annual pension — doled out in monthly installments of $10,586 — following his retirement on Nov. 30 of that year.

Since then, the ailing Musto, 84, who is accused of accepting $38,000 in kickbacks from a contractor in exchange for government support, has managed to stave off a trial in U.S. District Court while still collecting about $400,000 in pension payments.

Those ongoing pension payments are legal.

Whether such largess is ethical is another matter, with critics of state-funded pensions for lawmakers saying Musto’s substantial payout underscores what they see as an unconstitutional arrangement enriching politicians at the public’s expense.

‘Ward of state’

“Whatever happens, he will always be a ward of the state,” said Eric Epstein, founder of Harrisburg-based political reform group Rock The Capital.

Translation: If Musto never goes to trial, he keeps collecting his pension. If he is someday found guilty, he becomes a different kind of public expense as an inmate.

And either way, Epstein said, taxpayers will continue to pay for Musto’s health care.

U.S. District Judge A. Richard Caputo on Tuesday ruled that Musto is mentally incompetent to stand trial, ordering him to a hospital for treatment.

“He wins by ripping us off,” said Epstein.

That’s because Epstein is among critics who maintain that it’s actually unconstitutional for legislators to receive a state pension, arguing that the state’s Constitution clearly limits legislative compensation to salaries and mileage.

“Pensions are an illegal grant that exists outside the rule of law. There is no constitutional provision that allows for pensions,” Epstein said.

He also acknowledges that the courts have seen things rather differently.

In a July 2009 decision, state Supreme Court Justice Debra McCloskey Todd wrote that benefits are not addressed in the passage on legislators’ compensation and did not exist at the time this section was adopted. Further, she added, the state’s General Assembly “has the ability to act, absent some prohibition,” noting that benefits are not prohibited under the state Constitution.

“Ultimately, unless plainly and clearly violative of our Constitution, we believe objections to the matters of value received by the members of the General Assembly are for our citizens to make either directly to their legislators or at the ballot box,” Todd wrote.

Common Cause Pennsylvania Executive Director Barry Kauffman shares Epstein’s view that the Constitution “is pretty clear,” despite what the courts have held. While he believes it is appropriate that lawmakers “should be paid well,” he also believes there is no reason why legislators shouldn’t contribute to their own Individual Retirement Accounts, as many citizens across the state do.

Legal entitlement

With respect to Musto, Kauffman stressed that he is still legally entitled to the pension.

“Obviously, my first thought is, it doesn’t look good for Mr. Musto, but he is innocent until proven guilty, and we have to bear that in mind,” Kauffman said.

And even if Musto is found guilty at some point, he doesn’t have to pay one cent of his pension money back, under state law. In fact, while the pension payments will stop, he would still be able to receive his contributions paid into the pension fund, without interest, according to state law.

According to information provided Wednesday by the State Employees Retirement System, Musto contributed $98,224 toward his pension during nearly four decades in the state House and Senate.

“Even these contributions may be lost, however, because Act 140 requires they be used to pay fines and restitution associated with the criminal conviction,” the SERS website notes.

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