It’s payback time
Pension grab OK vs. dirty pols: court
A ruling Wednesday by the US Court of Appeals in New York could pave the way for authorities to seize the state-protected pensions of corrupt politicians such as Sheldon Silver and Dean Skelos.
The ruling, in the case of convicted former Bronx Assemblyman Eric Stevenson, found that his pension contributions are fair game as the feds seek to recoup $22,000 in ill-gotten gains.
The court sided with the government’s argument that federal law trumps state constitutional protections of retirement funds when it comes to forfeiture.
“Convicted politicians should lose pensions paid for by taxpayers they betrayed,” Manhattan US Attorney Preet Bharara tweeted after the ruling.
Bharara said he was going to start going after pensions in 2013 when testifying before the nowdefunct Moreland Commission panel established by Gov. Cuomo to go after public corruption. He made Stevenson a test case. Bharara told the Moreland panel that his office had just adopted a new set of policies to go after public officials’ pensions — starting with Stevenson and ex-Queens state Sen. Malcolm Smith, both of whom were busted on corruption charges that year.
“A galling injustice that sticks in the craw of every thinking New Yorker is the almost inviolable right of even the most corrupt elected official — even after being convicted by a jury and jailed by a judge — to draw a publicly funded pension until his dying day,” Bharara said at the time.
Bharara blamed New York state lawmakers for protecting corrupt politicians’ pensions.
“That error of state law, partially fixed a couple of years ago, must succumb to common sense. The common-sense principle is a simple one: Convicted politicians should not grow old comfortably cushioned by a pension paid for by the very people they betrayed in office.”
The ruling Wednesday agreed with Bharara that Stevenson’s pension should be considered an asset that could be tapped toward the $22,000 in ill-gotten gains he was ordered to forfeit.
“Stevenson argues that identifying his pension-plan contributions as a substitute asset and permitting seizure by the government was [in] error as those contributions are protected by . . . the New York state Constitution,” said the three-judge panel. “We disagree,” the judges said.
The ruling also gives corrupt politicians like former Assembly Speaker Silver and former state Senate Majority Leader Skelos less wiggle room to appeal the money they have been ordered to fork over, which is based in part on their pensions.
At Skelos’ sentencing, prosecutor Jason Masimore warned that his “victims are going to keep paying Dean Skelos under his pension agreement,” and asked that his fine be reflective of that.
Judge Kimba Wood agreed and ordered a $500,000 fine, which she said was more than one-half the value of his pretax pension.
Silver’s $70,000 annual pension also was taken into account when he was ordered to forfeit $5.3 million in illegal profits on top of a $1.75 million fine.
“Mr. Silver’s New York pension, which he filed for just days after being convicted, has a present value of approximately $850,000. I have taken that into account in setting the fine,” Judge Valerie Caproni said at his sentencing in May.