Pension should cushion fall from grace

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What's the difference between a criminal conviction and "probation before judgment"?

For Mayor Sheila Dixon, it's hundreds of thousands of dollars in retirement money - one of the biggest things at stake in her legal troubles. By technically avoiding conviction under a plea deal reached Wednesday, she remains eligible for an $83,000 annual pension that not only starts paying out immediately after she leaves office but rises over time along with the salary of whoever is mayor of Baltimore.

So the mayor who put Baltimore through two years of hell will get a handsome check from city taxpayers for years to come. At 56, actuaries say, she ought to live another 27 years. That would give her $2.2 million over time even before accounting for any cost-of-living raise.

"She can start collecting right away because she meets all the qualifications," said Roselyn Spencer, executive director of the city's employees and elected officials retirement systems.

Nice work if you can get it. But the handsome pension hung in the balance after Dixon was indicted on perjury and theft charges related to the abuse of gift cards. Maryland's Constitution requires that a convicted elected official "shall be suspended by operation of law without pay or benefits from the elective office."

Without pay or benefits - including pension benefits.

But her lawyers earned their fees by bringing the case to a close without wiping out her retirement plan.

"By getting probation before judgment, it is not a conviction and therefore it does not invoke the forfeiture" clause in the Constitution, said Andrew Levy, a Baltimore defense lawyer and adjunct professor at the University of Maryland School of Law.

And you wondered how the mayor was going to pay her legal bills.

Of course this raises several questions. One is: Why are elected officials getting these fabulous plans? Most people have to wait until they're 65 to draw a pension, or at least take a discount if they get early payments.

But as we've seen in Baltimore County, where council members can retire at full pay after serving five four-year terms, elected officials are getting huge pensions long before customary retirement age and without that much service.

Dixon met the age requirement years ago to start pocketing payments under the Baltimore plan for elected officials, which requires 16 years of service regardless of retirement age. She was first elected to the City Council in 1987. Like other Baltimore elected officials, she also is entitled to cost-of-living increases that are tied not to inflation but to the salaries of her successors, pension officials said.

The other question, of course, is: In a just world, why should any public official who was convicted by a jury and who entered a plea be entitled to any pension at all, let alone something that should keep her in furs and gift cards for life?

"It really depends on what state you're in," says Rick French, human resources manager for Garland, Texas, and president of the State and Local Government Benefits Association. "I would hope that everybody would try to keep their nose clean and do the right things. Unfortunately, when those things don't happen, sometimes they don't get the justice they deserve."

Often pension benefits for public officials as well as private citizens survive not only criminal convictions for the beneficiaries but bankruptcy proceedings and divorce.

"Even when O.J. [Simpson] was sued, he had millions in a private pension plan and nobody could touch it," said Jerry Hercenberg, a lawyer with Buck Consultants, a national personnel consulting firm.

In some states, "the argument for letting the person keep the pension is that this is something they have earned" regardless of criminal wrongdoing, said Brian H. Graff, a lawyer and executive director of American Society of Pension Professionals & Actuaries.

"The argument against it is that they were earning this while they were committing a crime" and shouldn't be entitled, he said.

Maryland's Constitution had the right idea. But the best and clearest laws are sometimes no match for a good defense lawyer and a prosecutor ready to wrap up a case.
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