Former state treasurer’s guilty plea puts his public pension at risk

Posted by By at 7 February, at 22 : 02 PM Print

by Andrew Staub | PA Independent

First, Rob McCord lost his bid to be Pennsylvania’s newest governor when he finished third in the Democratic primary and watched as nominee Tom Wolf unseated Republican incumbent Gov. Tom Corbett.

Then, McCord lost his job as state treasurer, a post he held the past six years, last week when he agreed to plead guilty to federal extortion charges.

What could McCord lose next? His taxpayer-funded pension? Actually, yes.

According to court documents, McCord threatened to use his position as treasurer to inflict economic harm on potential donors if they didn’t make big enough contributions to his gubernatorial campaign, a crime that could put him squarely at odds with Pennsylvania’s Public Employee Pension Forfeiture Act.

The 37-year-old state law, also known as Act 140, mandates that members of the State Employees’ Retirement System forfeit their pensions if they are convicted or plead guilty or no contest to certain crimes in relation to their employment.

“If there is any pension, Mr. McCord is not going to see it,” said Eric Epstein, the coordinator of Rock the Capital, a government-reform group.

The law covers theft by extortion, as well as threats and other improper influences in official and political matters. While it is a state statute, Act 140 also covers federal crimes that are substantially the same as state crimes included under the law, said Pamela Hile, a SERS spokeswoman.

SERS, though, cannot make a pension forfeiture determination until a court accepts a plea and legal documents identify the specific crime to which a SERS member pleaded to, Hile said. It would also have to examine whether the federal crime is substantially similar to a covered state crime. McCord is set to plead guilty Feb. 17.

The only benefit allowed by Act 140 are contributions members paid into the pension fund, but even those funds could be used to pay for fines and restitution, according to SERS.

SERS does not estimate what somebody’s annuity might be before they issue any payment, but PA Independent used a SERS formula to calculate a ballpark figure. That showed McCord stands to lose up to $17,110 in annual pension benefits, a figure that took a hit because the 55-year-old former treasurer resigned before reaching retirement age.

While McCord’s plea agreement with federal investigators mandated he resign within a day of signing the document, his attorney, Robert Welsh, said it did not address his state pension. Welsh said he has “no idea” whether his client will lose his pension, either.

“It’s not my area of expertise, so I just don’t know,” he said.

Epstein believes the former treasurer’s case is “pretty clear cut,” but he has seen cases where public officials who behaved badly kept their pensions — as former state Sen. Joseph Loeper did after pleading guilty to a felony count of obstructing a tax investigation almost 15 years ago.

There’s also been the more recent case of another former state senator, Leanna Washington. She pleaded guilty to conflict of interest after using public resources to plan a birthday party that doubled as campaign fundraiser. Her deal allowed her to keep her retirement benefits.

Perhaps McCord’s case will be different. His transgressions have already cost him his job, prompted him to apologize in an online video and left him facing up to 40 years in prison, though there’s no guarantee a judge would impose such a sentence on him.

The fall from grace has its origins in the gubernatorial race.

While trailing badly in the polls and having already loaned his campaign more than $2 million, McCord made the threats last April and May, according to court records. He attempted to extort a Philadelphia-based law firm that did business with the treasurer’s office, as well as a western Pennsylvania property management company that had received benefits and incentives from the state that were approved, in part, by the treasury, according to court records.

In the case of the law firm, court documents reveal McCord counseled one attorney to tell the managing partner “My concern is that if he loses and you stiffed him, every time you are trying to get something done through state government you are going to have the State Treasurer looking to screw you.”

In another instance, McCord said, “At the very least I’m still going to be the freakin’ treasurer. What the hell are they thinking?”

After that, whatever pension McCord has coming should be forfeited, Epstein said.

State Rep. Fred Keller, R-Snyder, still isn’t certain McCord will be giving up his retirement benefits, saying the law could be up to interpretation. The state lawmaker wants to introduce legislation that would broaden Act 140 to cover crimes beyond those related to public office or public employment.

“We are people that should be the examples,” Keller said. “We’re being paid by the public. That trust should expand beyond the scope of our employment.”

 

Photo by Cheltenham Democrats

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