County looks afar to ease pension woes Gary administration thinks insurance firm in Conn. can help

An elusive silver bullet?

Cigna was actuary for ample benefits created in the 1980s

September 22, 1996|By Scott Wilson | Scott Wilson,SUN STAFF

The Gary administration, elected two years ago promising to fix the county's snarled retirement system, believes the solution to Anne Arundel County's pension troubles may be locked in a file cabinet in Hartford, Conn.

There, at the giant Cigna Insurance Co. headquarters, is a drawer full of paperwork the county's lawyers say was collected as a defense to a lawsuit that never was filed.

Cigna was the actuary for Anne Arundel's $750 million pension fund during the 1980s, when the County Council created one of Maryland's most generous retirement plans for top officials.

If the administration's hunch is correct, the paperwork -- memos, interview notes and financial analyses of county legislation -- may be the elusive silver bullet County Executive John G. Gary has been searching for to kill once and for all Anne Arundel's notorious pension system for top officials.

"If it's there, any smoking gun would obviously be very important to us," said David A. Plymyer, Anne Arundel's deputy county attorney.

Last year, Gary initiated a secret investigation into Anne Arundel's pension system, now the subject of two lawsuits and a huge legislative effort to roll back retirement benefits for new employees.

In June 1995, Gary hired Sovereign Investigations, a Glen Burnie firm owned by former Baltimore County police Officer Kevin Keane, to find evidence of criminal corruption within the administration of former County Executive O. James Lighthizer, who left office in 1990.

The subjects of scrutiny were Adrian G. Teel, former chief administrative officer; Richard F. Mayer, former personnel officer; and Joseph H. Novotny, former county auditor.

Soon after bringing Keane on board, Gary hired John R. Greiber Jr., a lawyer who lost a bid for Anne Arundel state's attorney in 1994, to provide Keane with legal advice. "That is a very common practice," said Keane, now a Gary-appointed member of the county Ethics Commission.

The goal of the investigation was twofold: Find evidence of conspiracy among Lighthizer aides that could be used in civil court to nullify six pension bills passed in the 1980s, and pass that information to police to form the basis of criminal charges against the former officials.

Keane and Greiber were trying to determine the contents of a conversation that allegedly occurred in a Hartford office in May 1989. Involved were Cigna accountants, Mayer and other Anne Arundel officials.

The alleged meeting preceded the council vote on a 1989 bill, described by Gary administration lawyers as the coup de grace that dramatically increased benefits for top Lighthizer officials.

A $10 million levy

During the conversation, county officials believe, Mayer and others told Cigna actuaries not to notify the council that the additional benefits could cost taxpayers as much as $10 million.

County attorneys believe Cigna accountants, fearing legal reprisal once the financial ramifications of the pension changes were discovered, began assembling evidence to exonerate themselves if a civil suit was filed against the company.

Cigna was replaced as the county's actuary in the early 1990s when Anne Arundel consolidated pension funds with Aetna Insurance.

"It would seem logical that they would want to protect themselves," said Phillip F. Scheibe, county attorney.

But Greiber and Keane never made the Hartford trip.

From June through December 1995, they met periodically to review their findings, including the location of potential witnesses to the meeting. In October, the two met with Gary, who told them to continue the investigation.

On Dec. 7, Greiber and Keane flew to Fort Myers, Fla., rented a car and drove west to Cape Coral, a Gulf Coast city where Michael Milanowski, former Anne Arundel deputy personal director, was human resources manager.

They never saw Milanowski, but Greiber telephoned him.

'Never been to Hartford'

"He stopped into my office unannounced and unscheduled," said Milanowski, now personnel director for Charlotte County, Fla. "He called later and asked if I'd been privy to any conversation that took place in Hartford. I've never been to Hartford."

He added: "I believe it's a wild goose chase. There is no conspiracy."

The trip was over in 30 hours. The cost of the investigation, including the Florida trip, came to $10,620.

Days later, Gary halted the investigation after the county was sued separately by the Anne Arundel Taxpayers Association, which wants to rescind the pensions, and former county employees challenging Gary's legal right to roll back retirement benefits.

"The amount of money is pretty astonishing," said Robert C. Schaeffer, president of the taxpayers group, which was urged to file suit by Gary.

Greiber, who charges $180 an hour for his services, represents the group in the lawsuit. To date, his fee for the suit exceeds $10,000.

Gary said he expects to restart the investigation. "It's not going to go away," he said in a recent interview.

'A flagrant breach'

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