The federal Court of Appeals in New York handed down a ruling last week that could enable authorities to seize the state-protected pensions of disgraced government officials such as Sheldon Silver and Dean Skelos.
The ruling, in the case of convicted former Bronx Assemblyman Eric Stevenson, determined that his pension contributions are vulnerable to seizure as the feds seek to recoup $22,000 in illicit gains.
According to the New York Post, the court sided with the government’s argument that federal law overrides state constitutional protections of retirement funds in regards to forfeiture.
“Convicted politicians should lose pensions paid for by taxpayers they betrayed,” Manhattan US Attorney Preet Bharara declared after the ruling.
Bharara informed the Moreland Commission that his office had just instituted a new set of policies to attempt seizure of public officials’ pensions — starting with Stevenson, a former member of the Bronx New York Assembly, and ex-state Sen. Malcolm Smith, who were both arrested on corruption charges in 2013.
Bharara placed the blame on New York state lawmakers for protecting the pensions of corrupt politicians.
“The common-sense principle is a simple one: Convicted politicians should not grow old comfortably cushioned by a pension paid for by the very people they betrayed in office,” the Manhattan US Attorney asserted.
The latest court ruling agreed with Bharara that Stevenson’s pension should be classified as an asset that could be applied toward the $22,000 in ill-gotten gains he was ordered to forfeit. The court cited federal law, saying it overrides state laws protecting pensions.
“Stevenson argues that identifying his pension plan contributions as a substitute asset and permitting seizure by the Government was error as those contributions are protected by… the New York State Constitution,” the three-judge panel noted. “We disagree.”
The ruling also gives corrupt politicians like former Assembly Speaker Silver and former state Senate Majority Leader Skelos less maneuvering ability to appeal the money they have been ordered to hand over, which is based in part on both of their pensions.
At Skelos’ sentencing, prosecutor Jason Masimore warned that his “victims are going to keep paying Dean Skelos under his pension agreement,” and requested that his fine incorporate that point.
Judge Kimba Wood agreed and ordered Skelos to pay a $500,000 fine, which she said amounted to more than one-half that value of his pre-tax pension.
Silver’s $70,000 a year pension was also included in the court’s deliberations when he was ordered to submit $5.3 million in illegal profits on top of a $1.75 million fine.
“Mr. Silver’s New York pension, which he filed for just days after being convicted, has a present value of approximately $850,000. I have taken that into account in setting the fine,” Judge Valerie Caproni announced at Silver’s sentencing in May.