Vermont's Lawbreaking Public Employees Can Still Collect Their Pensions
Last year, Joyce Bellavance pled guilty to stealing $1.6 million from the Hardwick Electric Department. She was sentenced to three and a half years in federal prison and ordered to pay more than $1.1 million in restitution to her former employer.
Bellavance owes another $500,000 to the Vermont League of Cities and Towns, which covered the insurance claim on her theft from the public utility.
How will the now-disgraced former office manager, who perpetrated the largest embezzlement in Vermont history, afford to make those payments?
From her taxpayer-funded pension.
Records provided by the Vermont State Treasurer’s Office reveal that since December 1, 2010, Bellavance has been receiving $2,496.42 per month in pension payments from the Vermont Municipal Employees’ Retirement System. For her 38.8 years of “creditable service,” that works out to be roughly $30,000 a year — for life.
Bellavance voluntarily agreed to put half of her monthly retirement check into an escrow account to pay off her debt, but the law could not force her to do so. Under state law, courts can mandate paycheck deductions for child support or alimony but not to pay off public debts.
Twenty-five states have enacted laws allowing the revocation of pensions from public officials and employees convicted of felonies — mostly as a result of high-profile corruption scandals. Vermont and New Hampshire are the only northeastern states with no such law on the books.
Bellavance, who spent the stolen money on Pottery Barn furniture and down payments on homes for her two children, isn’t the only convicted public employee entitled to a taxpayer-funded pension. Kathy Lantagne, a former supervisor at the Vermont Department for Children and Families, was sentenced to 33 months in prison and ordered to pay more than $490,000 in restitution for theft, mail fraud and filing false tax returns. According to the state treasurer’s office, Lantagne’s 18 years of employment with the state also qualify her for a taxpayer-funded pension.
Ditto for Suzanne LaBombard, the former Isle LaMotte town clerk, treasurer and tax collector who confessed in 2007 to embezzling at least $100,000 from the town over five years. LaBombard, who worked for the town for 22 years, will be eligible to collect her pension from the Vermont Municipal Employees’ Retirement System when she turns 65, in about 11 years.
Jim Deeghan, the former Vermont State Police sergeant accused last month of doctoring his time-card with overtime he allegedly didn’t work, nearly doubled his annual salary of $80,000. Deeghan’s 22 years on the job qualify him to receive a state pension, too, though his benefits may be adjusted to reflect only the time he actually worked.
Vermont Treasurer Beth Pearce would not comment specifically on the Deeghan case or any other individual pension. Nor could her office calculate exact pension payments for Lantagne, LaBombard, Deeghan or a half dozen other public employees convicted of embezzlement or other felonies in recent years. Those calculations are based on an employee’s age, date of retirement, survivorship options and other factors. But nearly all public workers become eligible for pensions or refunds of their contributions after five years of creditable service.
Pearce explained that annuities and pensions are guaranteed to former public employees by law “and cannot be taken away,” even if they’re convicted of a felony perpetrated on the public dime. All the state can do is adjust payments downward if it discovers inaccurate wages.
Such adjustments may come as little consolation to Vermont taxpayers, who in recent years have been burned repeatedly by high-profile embezzlements. In January, “The 2011 Marquet Report on Embezzlement” identified Vermont as having the country’s highest risk of economic loss due to white-collar fraud.
Meanwhile, other states have been passing pension forfeiture laws. Maine adopted one in April that grants courts authority to seize public employees’ pensions for offenses related to their official duties, and direct that money to court-ordered restitution. Nicknamed the “Violette Law,” the statute was enacted after former state highway official Paul Violette pled guilty to pilfering more than $200,000 in public funds over seven years.
Alabama adopted a pension forfeiture law three months ago that allows the state to revoke pensions of public employees and state officials convicted of a felony related to their public duties. Maryland can revoke pensions for misdemeanors committed in public service, while Michigan allows a public pension to be withheld to cover the cost of incarceration.
Pennsylvania is considering expanding its pension-forfeiture law to cover violent crimes such as sexual assault, following news reports that convicted child rapist and Penn State football coach Jerry Sandusky will receive a public pension of $59,000 a year for life.
Why hasn’t Vermont enacted a similar law?
“We just haven’t had that discussion yet,” said Rep. Donna Sweaney (D-Windsor) who chairs the House Government Operations Committee. Last year, lawmakers passed a bill aimed at preventing embezzlement but did not address penalties, including the possibility of pension forfeiture, for those found guilty. “I’m sure it’s something we’ll look at,” Sweaney added.
In February, State Auditor Tom Salmon issued a report on financial wrongdoing in the state’s public school system that identified 25 incidents of theft, embezzlement and wire fraud in the public schools between 2000 and 2011. The cost to taxpayers: $415,000.
Salmon said that although his office hasn’t specifically considered the issue of pension forfeiture, he suggested it would be “a valuable exercise for Vermont to have that discussion.”
Convicted animal abusers can be forced to give up their pets, repeat drunk drivers can lose their vehicles and poachers can be banned from hunting in Vermont, remarked Sen. Vince Illuzzi (R-Essex/Orleans), the Essex County state’s attorney and a Republican candidate for state auditor.
“Clearly the precedent is there to do it,” Illuzzi said, but pension forfeiture “has never been actively considered.”
And if it were to be? Some would follow the logic of Sen. Kevin Mullin (R-Rutland). Although he wasn’t aware that current Vermont law protects pensions, Mullin said, “Those benefits should go back to whoever they stole the money from.”
But Doug Hoffer, who’s making a second run for the office of state auditor after his defeat to Salmon in 2010, said he’s not convinced the legislature should wade into this issue.
“Sensibilities change over time,” Hoffer wrote in an email to Seven Days, “and the justifications for cancellation/recapture could lose their force as society evolves ... ‘Minor’ felonies 20 years ago may look much less serious 20 years from now.”
“As a practical matter,” Hoffer added, “stripping a convicted felon of a major source of income could create serious hardships for a family, which could force them to seek public assistance (a cost to taxpayers). And, of course, it could limit his or her ability to pay fines or reparations.”