North Shore Sunday
May 19, 2002
The platinum parachute
Lost your re-election bid? Got canned while in office? No
problem thanks to an obscure state law, you can still get your pension. But maybe not for long.
By Elizabeth Dinan
After 20 years, one month and 17 days of working for the
state, former state Rep. Timothy Bassett began collecting a $38,419.32-a-year retirement pension.
The Marblehead resident, then 47 years old, wouldn't
normally qualify for a state pension, which typically calls for recipients to be age 55. But under a little-known section of
the state's retirement law, Section 10, he began receiving monthly retirement benefits, on top of a
severance package for at least $115,000, after a switch from Democratic to Republican
leadership resulted in the loss of his job as head of the state's land bank.
Believe it or not, Section 10 retirements are specifically
targeted for state lawmakers who are fired from their jobs, while the language of the law also provides for early
retirement checks if their positions are eliminated or they're not re-elected, as long as they have 20 years on the
job and weren't let go for "moral turpitude." And those packages are generous, equaling 33
percent of the average of the retirees' highest three years' earnings.
That must have sounded good to Angelo Marotta, who retired
on Feb. 1, 1991, after exactly 20 years of state service not a single day more. Marotta, the former mayor of Medford and,
like Bassett, a former state representative ('75-'89), was 54 years old when he began
drawing a monthly pension of $1,460.41. But his job wasn't eliminated, he wasn't fired and
he didn't lose an election. He simply decided not to run again, put in
his retirement application and was rubber stamped by the state's retirement board under Section 10.
And his retirement checks didn't stop arriving in the mail
while he was under house arrest for floating what's been called the state's largest illegal campaign finance scheme.
"Incredible," says Chip Ford, director of operations for the
Marblehead-based Citizens for Limited Taxation (CLT), when asked about Section 10. "It's typical
of the politicians, by the politicians, and for the politicians. That's why
we're in a fiscal crisis."
Even state Treasurer Shannon O'Brien's office agrees there's
something about some Section 10 packages that stink, though blaming the prior Joe Malone administration.
Remember, she's running for governor.
According to Massachusetts Assistant Treasurer Jon
Tapper, also O'Brien's mouthpiece, the state treasurer's office has established tighter restrictions since Bassett and Marotta were
granted retirement pensions. Further, he singles out Marotta as one of four lawmakers whose
Section 10 payments are currently being scrutinized (the other three are former Rep. Francis
Mara, former Sen. Paul Harold and former House Majority Leader Richard Voke), as
O'Brien petitions for a committee to study the whole early retirement program for fired,
displaced and election-losing lawmakers.
"It's obvious the prior administration had a culture of a
wink and a nod," says Tapper. "We're hoping to change that culture."
But the O'Brien reform may not extend to the more than 1,000
state employees who currently receive retirement checks under the legal provision designed in the 1950's for fired
bureaucrats. You can already hear it in Tapper's otherwise optimistic spin.
"There's a question of how far back you can go, within
reason," he says. "I imagine that's one of the things the study commission will review."
Political payday
As treasurer of Essex County, in the final days when there
was an Essex County, Tim Bassett was charged with, among other things, figuring out how to pay pensions to retired
and retiring county employees. He sounded sympathetic to their concerns that money be put
aside to meet contractual agreements.
"Pensioners need not worry about losing their pensions," he
was quoted as saying. "We'd better roll up our sleeves and get this straightened out."
A Marblehead resident, his hometown newspaper, the Marblehead Reporter, was critical of
his decision to hang onto $1.3 million that the county advisory committee had decided to
return to contributing cities and towns, as he waited for a legal opinion regarding
disbursement of that money. Clearly, Bassett was championing the government workers'
futures.
And no wonder. Since serving as elected county treasurer,
Bassett has been collecting his own government pension of $3,201.61 a month, or $38,419.32 a year. A Democratic state
rep for his former home turf of East Lynn, Bassett served as a legislator from 1973 until
1985, when he resigned under a Republican majority.
But he found a soft place to land, as they say in political
employment circles, getting the nod from former Gov. Michael Dukakis to head the state Government Land Bank. A job that
predictably evaporated shortly after Republican Gov. William Weld was elected to office,
with Bassett having barely accumulated the requisite 20 years to grab a Section 10
retirement brass ring. (He says he put in 23-plus years, but the state checked twice and sticks to 20
years, one month and 17 days.)
Just 47 years old, Bassett was sent packing from the Land
Bank office with what he says was a year's salary, or $100,000, in severance pay and $15,000 to look for a new job
(other published reports have quoted the severance as three times higher, while Bassett
denies this).
And soon after, someone at the state retirement board gave
the thumbs up to his Section 10 application, paving the way to $38,419 a year, beginning Feb. 17, '95 and based on an
average of his three highest years' earnings of $98,480.
His departure from the land bank, he says, was due to
political maneuvering, with an acknowledgment that there was "no problem" with his job performance. He says he was
given just seven days notice and soon after hired an attorney to see if there was anything he
could do about it. The attorney told him no, but discovered Section 10, a provision Bassett
said he knew nothing about until then.
"I didn't use the law for my own gain," Bassett says. "I was
forced to do it."
A year later, in 1996, Bassett was elected treasurer of
Essex County. And while the county was officially dismantled on July 1, '99, he's still on the job, he says, managing a $2
million budget to accommodate 5,000 county retirees. He's paid $91,000 a year, though not
through the state, but by statute from the county retirement account. You could say rumors of
the county's death have been greatly exaggerated.
Normally, retired state workers collecting a pension may not
earn more at a subsequent job than what their earnings were at the job from which they retired. But according to the state
treasurer's office, there's an exception for elected positions. And since Bassett was elected to
his treasurer's post, he collects a state pension, while still serving as treasurer for
the now-defunct county.
Again, legally.
Bassett acknowledges abuses in the Section 10 system, though
he describes his as a textbook example of why the program was established to begin with.
"I was forced into retiring when my public service was cut
off, because I wouldn't go along with the (Republican) agenda," he says. "One of the big challenges in public service is, how
do you hire qualified, talented people and protect them from being victim to political purge?
If you're under 55 and you can't retire and you're a victim of a political decision, there
should be an economic safety net for your situation."
Asked how he'd respond to charges he's double dipping,
Bassett is frank.
"I think double dipping is an old version of how people view
retirement when they only had one employer," he says. "Now people have Social Security, 401Ks, public pensions, military
pensions ... My situation is no different than that. I have several (county employees) who
collect multiple (retirement sources). And people forget, we pay into it through deductions
in our checks."
Bassett also points out that public employees who've been
contributing in excess of 8 percent to their pensions, after 1981, are funding their own pensions, with no taxpayer
contribution. Prior to '81 the employer, or taxpayers, are picking up the tab.
Raising red flags
While nobody's disputing Bassett's right to collect his
pension under the law, Angelo Marotta's case is another story.
Marotta did not return Sunday's request for comment about
the fact that he's one of four former state legislators now spotlighted by O'Brien's office as a Section 10 recipient under
questionable circumstances. In Marotta's case, he filed for early retirement based on the "not
re-elected" provision, despite the fact that he didn't even try to get re-elected at
the time he filed an application and gained subsequent approval.
In short, he was not 55 and he'd left his job voluntarily.
And Marotta must've been keeping a very close eye on the
calendar, because according to the state board of retirement, he put in for his checks exactly 20 years, no months and no
days following his first day of state service. O'Brien's office has been quoted as saying
Section 10 retirement claims filed near the 20-year mark should be "raising red flags."
Marotta was mayor of Medford in 1972 and '73, a state
representative until 1989 and the next year was apparently looking forward to seeing John Silber sworn-in as governor,
because that's when he illegally funneled $22,000 to Silber's failed gubernatorial campaign.
After pleading guilty to taking the money from a safe in his
home and buying 39 money orders assigned false names at seven different Medford banks, donating them all to the Silber
campaign, he told investigators he did so because he didn't want it to appear he'd "bought" a
job, if Silber subsequently hired him on the team.
Marotta had previously voted in favor of the state's
campaign finance disclosure law and had been collecting $17,524.92 a year in Section 10 retirement benefits for three
years when he was sentenced in 1994. Acting U.S. Attorney Karen Green called the sentencing of six
months of home detention and a $35,000 fine, "the heaviest fine ever imposed in an illegal
campaign finance scheme in Massachusetts."
But the fine obviously didn't hurt the former rep in the
pocket any, because according to court documents, four years later he loaned $135,000 to the Caruso brothers, Saugus heirs
to the Diplomat restaurant, who describe him in a deposition as an "old friend in
construction."
Six months later, Marotta, his wife Louise and nursing home
millionaire Alfred Arcidi bought the majority of Caruso stock, launching a mega court battle, in part accusing Marotta, who
was president and treasurer of Caruso's, of borrowing more than $1 million from Century
Bank and proceeding to mismanage, squander and misuse the funds, while not paying bills
and creating jobs for friends.
The charges remain allegations, as the case has yet to be
settled. Through it all, Marotta's state retirement checks keep arriving in the mail.
Retiring minds
As one might expect, Citizens for Limited
Taxation, based in Marblehead and founded in 1974 to "defend taxpayers against a
proposed state graduated income tax," has something to say about early retirement deals.
Chip Ford, director of CLT operations, needs little prompting to weigh in on Section 10.
"They keep asking us where to cut," he says. "This is how
they managed to double the budget in the last 12 years. Your paycheck doubled in the last 12 years, didn't it?"
Ford says lawmakers employ the same scare tactics each and
every budget time, calling on emotional targets, like children, the elderly, the mentally ill, to be slashed if taxes aren't
raised. But they continue to approve raises and put in for early retirement checks for themselves.
"What kills me is that people keep buying into it," he says.
"They projected spending a billion dollars over budget and they retire people early when they're 45? With full pensions?
They say to cut off the mentally ill, starve the children and cut the elderly but give us our early
pensions. That's why we're in a fiscal crisis. And they wonder why we're cynical."
Shannon O'Brien's official Web site describes Section 10
retirements as a "termination retirement allowance," available to members of the state retirement system with 20 or more
years "who fails of re-nomination or re-election, or fails re-appointment, or whose office or
position is abolished, or who is removed or discharged from his or her office or position
without moral turpitude." Further, her public explanation of the law says anyone removed
from a state job for violating the rules and regulations applicable to that position, or brought
about by "collusion or conspiracy," is not entitled to Section 10 checks.
Additionally, filing a false or fraudulent application can
result in a $2,000 fine, as well as double the amount of any Section 10 money collected.
Asked by Sunday to weigh in on the retirement deal, Tapper
says, on O'Brien's behalf, that no questionable Section 10 retirements have been granted on her dime, adding that since
taking over the state treasurer's office, she's tightened the reigns.
First, he says, she's expanded the retirement board from
three to five members and eliminated a past practice of having administrative clerks charged with approving retirement
applications. Now, says Tapper, the full board of five must grant approval.
Spurred by a questionable retirement application filed by
former Jane Swift aide, Peter Foreman, who claims he was fired by Swift before moving to a more lucrative job, O'Brien's
office now says it will require a document signed by the employer, under the pains and
penalties of perjury, noting, "that the termination is a genuine termination."
The assistant state treasurer says his boss has also filed
legislation asking for the creation of a study panel "to look at the entire law." The panel would examine the history and
examples of Section 10 and make recommendations to the legislature. In the meantime, Marotta's
retirement case is being pushed to the front of the line, without waiting.
"We're in discussion with them, or I should say their
attorneys," he says. "It could cost more if challenged in court."
A state treasury official, speaking on the condition of
anonymity, says Section 10 retirees on the hot seat argue that O'Brien can't cut off their benefits, since those benefits were
approved by a prior administration which interpreted the law differently. They're arguing that if you
didn't seek re-election, you didn't win, therefore you're eligible for early
retirement if you have your 20 years in. O'Brien's office, says the source, doesn't see it that way.
That's likely to be part of the discussion between the state
and Marotta's attorneys, along with his criminal activity while collecting. State law says you can lose your pension if you're
convicted of a crime related to the duties of your office, and given that Marotta is on the
record making reference to a potential job from Silber, in exchange for his $22,000
contribution, it may be called into question.
Asked if he thinks Marotta's conviction is job-related,
Tapper hedges.
"Since he's one of four under review," he teases, "we will
take a look at this."
As for Bassett, he says that when his county treasurer's job
expires in December, the state is expected to appoint someone to take over. In the meantime, he mails checks to the 5,000
county retirees, collects his own $38,419.32 state retirement check, as well as the $91,000
salary for the county treasurer's job, while expressing disdain for people who abuse the
system.
He says, "It galls me when other people twist the law
around."
For a complete list of Section 10 retirement recipients,
call the state treasurer's office at 617-367-6900.
Elizabeth Dinan is a reporter for North Shore Sunday. E-Mail her at edinan@cnc.com.
Thank you Elizabeth Dinan and North
Shore Sunday!
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