A bill permitting state employee pensions to be forfeited by court action after financial crimes like embezzlement cleared the House on Friday in a voice vote.
A priority of the Shumlin adminstration, the bill follows in the wake of a police overtime scandal last summer, where Vermont State Police Sgt. James Deeghan claimed $213,000 in overtime pay for work he never did.
Deeghan is now a convicted felon and must pay back $202,000 in restitution over six years. He will spend at least two years in prison.
The bill sailed through committee and floor proceedings, seemingly facing no opposition at all. It now heads to the Vermont Senate for consideration.
State employee unions and others signed on, with the state’s three boards who deal with public retirement funds backing the bill this morning. The boards together represent about 46,000 active and retired public employees.
In a statement released Thursday, House Speaker Shap Smith said, “We do not expect that most hard-working state employees, municipal employees, and teachers will breach the public trust.
“However, if there is a need for recourse, we currently do not have it available under our current laws. This bill will ensure that the state will have a system in place to address the issue, if it occurs.”
Safeguards built into the law allow for pension payment to innocent spouses and family members of the convicted public employee, and provide a specific enumeration of the relevant crimes. House Judiciary chairman Bill Lippert, D-Hinesburg, described the bill as fair to both the state and its employees.
According to state Treasurer Beth Pearce, about half of all states have some laws dealing with pension confiscation after criminal convictions. Offenses punishable by pension forfeiture under the bill include embezzlement, theft, bribery and other crimes that abuse a public position for private financial gain.
An external forensic audit of pay practices at the Department of Public Safety, where Deeghan worked, is yet to be completed, said state Auditor Doug Hoffer. Results may arrive in a week or two.
Results from this audit were originally expected at the end of January, with audit manager Stephen Vantine telling House lawmakers in mid-January that the data hadn’t yet indicated any systemic fraud.
Read the legislation as introduced, H.41, here.
