Battle pits Gary's guys vs. old days Pension-plan lawsuits ,,foster accusations against ex-top officials

'Breach of public trust'

1989 law is called the 'coup de grace' at center of dispute

February 25, 1996|By Scott Wilson | Scott Wilson,SUN STAFF

Anne Arundel's pension plan for appointed and elected officials, snarled in two competing lawsuits, has set off a bitter battle between the county's cost-conscious administration and its predecessors.

In documents filed the past three weeks in U.S. District Court in Baltimore, the county attorney's office accuses former top administrators of "a flagrant breach of public trust" for creating one of Maryland's most lavish retirement plans during the 1980s.

The former administrators say the effort to cut their pensions has more to do with politics than the law.

The documents represent the latest chapter in a civil suit filed last year by 13 former Anne Arundel employees seeking to protect their retirement benefits. The papers also signal an escalation in the suit's tone and charges.

Last summer, County Executive John G. Gary pushed through legislation that rolled back many benefits paid to the county's retired appointed and elected officials, prompting the suit.

In December, the Anne Arundel Taxpayers Association filed a separate suit, seeking to strip certain retirement benefits from top county administrators -- a goal that Mr. Gary endorses. Now, the association's board is discussing a referendum effort to allow county voters to decide the matter in November.

"This is an obvious scam," said Robert C. Schaeffer, the association's chairman. "But nobody seems to want to do anything about it." The showdown in federal court has been cast as the legal remedy to years of political jousting over the pension plan, which includes 93 former and current county employees. Mr. Gary has acknowledged that fighting the lawsuit may cost more than the benefits themselves, at least in the short term.

County figures show that the pension plan, one of five covering Anne Arundel's 3,500 employees, is underfunded by $7 million.

The county's court filing, a response to the plaintiffs' request earlier this month for a quick decision in the case, accuses former top administrators of deceiving the County Council in order to enrich their own pension benefits.

The papers link at least three plaintiffs to the alleged deceptions: Richard F. Mayer, former personnel officer; Adrian G. Teel, former county administrative officer; and Joseph H. Novotny, former county auditor.

At the center of the dispute is a 1989 law -- described in court documents as the "coup de grace" -- that enriched top officials' pensions by lowering the retirement age, loosening restrictions on buying service credit from previous jobs, raising the county's contribution to the plan and increasing minimum benefit payments. County attorneys claim that top officials acted improperly to ensure the bill's passage.

The former county officials' lawyers dismiss the charges as "ridiculous" and "abusive."

"The vast bulk of the county's weighty opposition is simply a series of immaterial factual misstatements and legal red herrings," Glenn M. Cooper, a Bethesda lawyer representing the former employees, wrote in documents filed Friday.

"This case is unusual, however, for it is a political, not a legal, case," he said.

Because of the political animosities, the case was moved to federal court last month.

The pension case is being watched carefully by Maryland counties because of two key questions: Can elected officials raise their own benefits? And do subsequent administrations have a right to take them away?

Increasingly generous

From 1983 through 1989, court documents allege, the retirement program for some of the county's highest paid officials became increasingly generous as the result of six bills.

In a Feb. 7 court affidavit, a financial analyst hired by the county concluded that the plan "contained significant, unwarranted and excessive benefits."

Mr. Gary moved quickly upon taking office to scale back benefits granted by the plan. Specifically, his legislation sought to repeal three parts of the controversial 1989 bill passed during the final months of O. James Lighthizer's administration.

With the County Council's unanimous approval, the bill returned the retirement age from 50 to 60, lowered the minimum annual retirement benefit from $4,800 to $1,200 and cut back the county's contribution by 20 percent.

The legislation is on hold until the civil suit is settled. The plaintiffs could be liable for paying back benefits with interest should they lose the case.

2 points, both rejected

The county's argument comprises two points: That Mr. Gary has the right to scale back benefits and that the procedure used to raise pension payments through the 1980s was improper.

The former officials reject both claims. Mr. Cooper said Maryland law prohibits county councils from repealing benefits. Both sides cite past attorney general opinions to support their conflicting points of view.

Additionally, Mr. Cooper denied that his clients misled council members and said the charge is abusive.

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