April 2, 2008
CORRUPT OFFICIALS PROVISION IN HB 5507
By: Sandra Norman-Eady, Chief Attorney
You asked for a summary of the corrupt officials' provision in sHB 5507, An Act Concerning Ethics.
The Government Administration and Elections Committee favorably reported sHB 5507 on March 17, 2008. Among other things, the bill permits state courts to revoke or reduce any retirement or other benefits due to state or municipal officials or employees who commit certain crimes related to their employment. The remainder of this report consists of a detail summary of the corrupt officials' provision.
With two exceptions, the bill permits state courts to revoke or reduce any retirement or other benefit due to state or municipal public officials or employees or quasi-public agency members, directors, or employees who commit certain crimes related to their employment. Under the exceptions, (1) no revocation or reduction prohibits or limits benefits that are the subject of a qualified domestic relations order (e.g., child support) and (2) no pension may be reduced or revoked if the IRS determines that the action will negatively affect or invalidate the status of the state's government retirement plans or a municipality's government retirement plans under § 401 (a) of the Internal Revenue Code of 1986, as from time to time amended.
The bill requires the court to order payment of any benefit or payment that is not revoked or reduced.
Crimes Related to Office or Employment
The bill requires the attorney general to apply to the Superior Court for an order to revoke or reduce the benefits of a public official or employee who is convicted of or pleads guilty or nolo contendere (no contest) in federal or state court, on and after January 1, 1998, to:
1. committing or aiding or abetting the embezzlement of public funds from the state, a municipality, or a quasi-public agency;
2. committing or aiding or abetting any felonious theft from the state, a municipality, or a quasi-public agency;
3. bribery connected to his or her role as a public official or employee; or
4. felonies committed willfully and with intent to defraud to obtain or attempt to obtain an advantage for himself or herself or others through the use or attempted use of his or her office.
The period of any revocation or reduction begins from the date the crime was committed.
“Public officials” are current, impeached, or expelled (1) statewide elected officers, (2) legislators and legislators-elect, (3) judges, (4) gubernatorial appointees, (5) municipal elected and appointed officials, (6) public members and union representatives on the Investment Advisory Council, (7) quasi-public agency members and directors, and (8) people appointed or elected by the General Assembly or either chamber. The term does not include advisory board members or members of Congress.
“State employees” includes employees of quasi-public agencies.
When determining whether to revoke or reduce a public official's or employee's benefits or payments, the bill requires the court to consider:
1. the severity of the crime;
2. the amount of money the state, municipality, quasi-public agency, or anyone else lost as a result of the crime;
3. the degree of public trust reposed in the person by virtue of his position;
4. if the crime was part of a fraudulent scheme against the state or a municipality, the defendant's role in it; and
5. any other factors the court determines that justice requires.
The court cannot revoke or reduce the pension benefits of a public official or employee who cooperated with the state as a whistleblower before learning of the criminal investigation. This prohibition applies only if the court determines or the attorney general certifies that the official or employee voluntarily provided information to the attorney general, state auditors, or a law enforcement agency against a person more blameworthy than the official or employee.
After determining to reduce pension benefits, the court must consider the needs of an innocent spouse or beneficiary and may order that all or part of the benefits be paid to the spouse or beneficiary.
If an official's or employee's pension is revoked, the bill entitles him to the return of any contributions he made to it, without interest. But, the repayment cannot be made until the court determines that the official or employee has fully satisfied any judgment or court-ordered restitution related to crime against his office. If the court determines that he has not, it may deduct the unpaid amount from the individual's pension contributions.