Assemblyman Lavine: Legislation Will Prevent Pension System Abuse

July 10, 2008

(D-Glen Cove) Assemblyman Charles Lavine announced the Assembly passed a bill agreed to by the Senate and governor that he supported to bring transparency and accountability to the public retirement system and permanently stop waste, fraud and abuse of the state pension system (A.11743).

“New York State’s pension system is designed for those who have contributed years of service and expertise. The fact that some people take advantage of this system at the expense of New York’s taxpayers is outrageous,” Assemblyman Lavine said. “This legislation will combat this blatantly fraudulent practice.”

This legislation follows Attorney General Andrew Cuomo’s investigation that uncovered long-term and systematic fraud of the public pension and benefits system. Many attorneys were found to be on the payrolls of multiple school districts and BOCES programs simultaneously, some not even providing legal services for the school districts in question. Also revealed through this investigation was the practice of “double-dipping,” or allowing employees to earn a salary and pension at the same time, often for the same job.

“When individuals defraud the government by receiving benefits they are not entitled to it doesn’t just defraud taxpayers,” Assemblyman Lavine said. “It defrauds schoolchildren of money earmarked for education.”

This legislation enacts rigorous transparency and accountability measures to permanently stop waste by:

• allowing the attorney general to bring action to recover funds and impose penalties on attorneys who aren’t employees of school districts or BOCES, but who improperly receive compensation or benefits;

  • increasing the penalty for pension fraud from a misdemeanor to a felony and creating a new criminal penalty for lawyers who improperly receive compensation or benefits;
  • prohibiting lawyers from simultaneously being an employee and an independent contractor for a school district or BOCES;
  • closing “double-dipping” loopholes in the pension waiver process; and
  • requiring schools to list all compensation, including salary and benefits, for all administrators to be posted on the school’s Web site and at public libraries.

“At a time when so many New Yorkers are financially stretched, it is shocking and disheartening to learn that millions of taxpayer dollars were wasted on fraudulent pensions and benefits,” Assemblyman Lavine said. “This legislation gives the state a means to recoup benefits that were improperly credited and provides transparency to ensure this systematic abuse of public funds does not continue.”