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By JENNIFER LEARN-ANDES jandes@leader.net
Friday, March 07, 2003 Page: 3A
Luzerne County Retirement Board majority members don’t believe majority
commissioners should use county funds to hire their own lawyer to look into
the pension fund.
Conversely, a union representative says the Retirement Board majority
shouldn’t use pension fund money to hire its own lawyer to probe oversight of
the fund, either.
Tom Lazur, northeast director of the United Food and Commercial Workers
union, has written a letter to all five Retirement Board members, calling for
someone to challenge the board’s use of up to $45,000 from the pension fund to
hire Schnader Harrison Segal & Lewis LLP of Philadelphia.
Hired in January, the firm will investigate possible wrongdoing with the
past and present administration of the pension fund and recommend legal
recourse.
Retirement Board majority members Commissioner Stephen A. Urban, Controller
Steve Flood and Treasurer Mike Morreale voted in favor of the hiring, largely
because some board members moved money and hired managers without a required
public vote.
“If there is any justifiable reason to incur an expense to conduct a
`probe’ – or any similar type expense – the responsibility of paying that type
of expense should be borne by the Board of Commissioners of the county – not
by the members of the pension fund,” wrote Lazur, who was in union
negotiations Thursday and not available for comment.
“To do otherwise, would establish a future precedent for any type of
`frivolous expense’ to be charged against pension fund assets without
justification and reasonable due diligence,” Lazur wrote.
Urban, Flood and Morreale said they hired the Philadelphia law firm to
determine if there is a strong potential to recover damages for past misdeeds.
Any money recouped would be deposited into the pension fund, they say.
Lazur said someone should ask Hay Group, the pension fund’s actuarial, to
provide a written opinion on the expenditure.
Hay Group representative Norm Pickering said Thursday that the state County
Pension Law says the board can incur “reasonable expenses,” but doesn’t
clearly define them. The law essentially says the Retirement Board must follow
the “prudent person rule,” which means managing the money responsibly as if
it is your own.
Pickering said the law doesn’t require him to become involved in disputes
about specific expenditures unless the fund dwindles to a point it can’t meet
its financial obligations to retirees. That is unlikely, Pickering said,
because county taxpayers are legally obligated to shore up the fund if it runs
short.
Also, county Retirement Board Solicitor Christopher Cullen has filed a
notice of appeal to Commonwealth Court over the hiring of Scranton attorney
Chris Jones.
Luzerne County Commissioners Tom Makowski and Tom Pizano, who are also on
the Retirement Board, hired Jones on Feb. 3 to handle “disputes” over the
pension fund.
Jennifer Learn-Andes, a Times Leader staff writer, can be reached at
831-7333.