Politics & Policy

Corrupt — and Set for Life

In New York, officials convicted of fraud continue to draw taxpayer-funded pensions.

A corruption conviction doesn’t necessarily stop elected officials from profiting at the taxpayers’ expense. But a new effort led by U.S. Attorney Preet Bharara aims to go after politicians’ public pensions when the courts find them guilty.

“Our primary mission is to address and to undo injustice, and, in the public-corruption context, a galling injustice that sticks in the craw of every thinking New Yorker is the almost inviolable right of even the most corrupt elected official — even after being convicted by a jury and jailed by a judge — to draw a publicly funded pension until his dying day,” Bharara, attorney for the Southern District of New York, testified on September 17 at the Moreland Commission to Investigate Public Corruption. He added that “convicted politicians should not grow old comfortably cushioned by a pension paid for by the very people they betrayed in office.”

National Review Online has found that since 2008, at least four convicted politicians in New York have drawn pensions, all in excess of $3,000 per month.

#ad#Efrain González Jr., a former New York state senator from the Bronx, is currently serving a seven-year sentence for corruption — and drawing a gross monthly pension of $3,069.00, courtesy of the New Yorkers he defrauded.

Channeling money through two philanthropic organizations (including a children’s charity), González stole more than $500,000 — money that came from state grants as well as individual and corporate donations. He used the money buy a luxury apartment and a vacation-club membership in the Dominican Republic, jewelry, Yankees tickets, and decadent meals, as well as to help cover the costs of creating “Assembly” and “Speaker” label cigars.  

Another former New York lawmaker, Carl Kruger, who served as a state senator from Brooklyn, continues to receive a gross monthly pension of $4,834.25, which he began drawing once he resigned in disgrace. He, too, is serving time after a corruption conviction. The former chair of the New York Senate Finance Committee, Kruger had accepted over $1 million in bribe money from sources within the health-care sector.

Among Kruger’s co-defendants was Michael S. Turano, a gynecologist. Kruger had reportedly lived with Turano and Turano’s mother and brother in a gaudy old mafia house in Mill Basin, the New York Times reported.

The mother, Dorothy Turano, apparently referred to Kruger as her “partner,” but prosecutors suggested Kruger and Michael Turano had shared an intimate relationship —  recordings from wiretaps showed that the two men “sometimes spoke to one another in baby talk,” according to one FBI agent. Bribery payments were funneled through Michael Turano’s bank account to Kruger, the gynecologist would later admit to the court. The money apparently went in part to help pay the mortgage on the Turano mansion, and to finance a black Bentley Arnage.

Kruger is receiving more than $58,000 a year in pension payments, and throughout the duration of his seven-year prison term, he’ll draw more than $400,000 in taxpayer-funded pension payments.

But former Westchester County senator Nicholas Spano, who pleaded guilty to filing fraudulent tax returns, makes even more — $5,849.24 per month, to be exact.

During his time in office, Spano helped craft the operating budget for New York — which is ironic, considering that he wasn’t contributing his fair share. In 2012, Spano confessed to underpaying his taxes by $53,000. He had committed fraud on his tax forms, deducting more than $180,000 in wrongfully claimed expenses. Sentenced to a year and a day in federal prison, Spano will collect more than $70,000 annually in pension money.

And Anthony Seminerio, a Queens lawmaker for 30 years, was receiving $5,930.67 a month in pension payments when he died in prison in January 2011. In exchange for legislative favors, the lawmaker had received more than $1 million in payments from businesses operating in New York, federal prosecutors claimed. The indictment said specifically that one area hospital had paid Seminerio $310,000 through a consulting firm for favorable treatment. In 2009, Seminerio pled guilty to a single count of fraud, admitting he had “promoted the interests” of Jamaica Hospital Medical Center.

It’s not clear whether his family continues to draw survivor’s benefits.

It’s possible that many more public workers with corruption convictions are also drawing public pensions, but the lack of transparency makes it difficult to know. NYCERS, the New York City pension system, is the largest municipal-employee retirement system in the nation, managing pensions for more than 300,000 people. But the NYCERS receptionist told National Review Online that the system had no press contact on file; nor is anyone available to answer media questions about beneficiaries. While NRO has not been able to independently verify who does or does not receive a pension, since August 2009 alone, at least ten New York public employees and officials have been convicted in corruption cases, and several more are facing charges.

Clawing back these benefits isn’t easy, in part because of state law. The New York State constitution offers some of the strongest protections for pensions in the United States, explicitly stating that promised retirement payments cannot be decreased in any way once an employee becomes eligible to participate.

But District Attorney Bharara is seeking to use federal law to recover pension payments when a public official is convicted of corruption. As he outlined in his testimony, one way to do that would be to “appropriate fines that take into account the money a corrupt official might derive from a publicly funded pension.” Federal forfeiture law could also be employed.

This approach is both unprecedented and sensible, and it will probably soon be tested in the federal courts. Bharara has already identified two pending public-corruption cases where he will attempt to go after the accused’s pensions. If he succeeds, justice would truly be served. When public officials engage in corruption, they — not the taxpayers — should be forced to pay.

— Jillian Kay Melchior is a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity.

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