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No Reform in Sight for Bipartisan Abuse of State Pension Loophole

Legislature won’t undercut patronage, entitlements for ‘political class,’ ethics advocate says.

Gov. Chris Christie (right) talks with Essex County Executive Joseph DiVincenzo (left) and Sheriff Armando Fontoura after their campaign walking tour of Newark's Ironbound on July 23.
Credit: O'Boyle
Gov. Chris Christie (right) talks with Essex County Executive Joseph DiVincenzo (left) and Sheriff Armando Fontoura after their campaign walking tour of Newark's Ironbound on July 23.

For a challenger like Sen. Barbara Buono (D-Middlesex) stuck in an uphill race and trying to cast herself as a reformer unafraid to take on the political bosses, it was a made-to-order political attack. There was Republican Gov. Chris Christie campaigning in Newark’s Ironbound with two of his most prominent Democratic supporters, Essex County Executive Joe DiVincenzo and Sheriff Armando Fontoura. Christie was on camera praising DiVincenzo for “running a clean, effective and efficient government,” proclaiming “there is no better sheriff” than Fontoura, and declaring that “I love working with these guys.”

“These guys” are two of the poster boys for a notorious New Jersey pension practice that enabled DiVincenzo to “retire” and collect a $68,861 pension while continuing to be paid his full $153,831 salary and Fontoura to collect a $62,304 pension while being paid $137,917. Fontoura has collected more than $1.2 million in pension payments since he “retired” in 1990.

But Buono couldn’t make a big deal out of Christie for campaigning with double-dippers like DiVincenzo and Fontoura, even though the practice drives her public employee union supporters crazy.

That’s because Buono’s campaign chair, Assemblywoman Bonnie Watson-Coleman (D-Mercer), collects her $49,000 legislative salary while taking a $44,724 pension from the state Department of Community Affairs. So does Senate Majority Leader Loretta Weinberg (D-Bergen), one of Buono’s most vocal supporters, who boosts her $49,000 Senate salary with a $36,000 pension from her Assembly years.

“It’s the way the system works in New Jersey, and this practice is a symptom of a problem that is endemic to both parties,” said former Sen. Bill Schluter (R-Hunterdon), who has spent 25 years fighting for ethics and campaign finance reform. Ironically, Christie signed an executive order last Wednesday creating a new unit within the Treasury Department to investigate pension and disability fraud, develop recommendations for changes in practice, and refer cases for both criminal and civil prosecution.

But the salary/pension double-dipping by DiVincenzo, Fontoura and dozens of other legislators, state and county officials is legal and will have to be addressed through legislation. And that just isn’t going to happen, Schluter noted.

“The Legislature comes up through politics, and one of the cardinal rules of politics is that you take care of your friends and honor patronage,” Schluter explained. “These pensions you cash in [while you’re still working] and the unused vacation days and unused sick days you bank are all part of the entitlement. DiVincenzo has a fulltime job and should not get a pension on top of it.”

Schluter was such a persistent advocate for ethics reform in the Legislature for 14 years that Republican and Democratic legislative leaders redistricted him out of office in 2001. He served on the state Ethics Commission, which rules on ethics violations in the executive branch, from 2006 until this past March. But Christie declined to reappoint him to another four-year term after he was the only member who bucked the governor over his insistence on putting in “his own person” to replace the commission’s longtime executive director in 2011.

Schluter was not surprised that legislation sponsored by Sens. Jennifer Beck (R-Monmouth) and Steven V. Oroho (R-Sussex) to ban the practice of government officials simultaneously collecting full pay in their current government jobs while also collecting a government pension check has not even been posted for a vote in committee more than two years after DiVincenzo’s double-dipping made the headlines. The Beck-Oroho bill would effectively ban not only elected officials, but all public employees from collecting a salary from one public job in New Jersey while pulling down a pension from another. Any New Jersey government retiree who goes back to work for a government entity in New Jersey and makes more than $15,000 would have to suspend his or her pension while working in that job in the same way that retirees who go back to work have to give up a portion of their Social Security payments if they make more than a certain amount.

“The Legislature won’t fix this, any more than it will change senatorial courtesy or any other special benefits that maintain the power structure,” Schluter said. He pointed out that former Senate President John Bennett (R-Monmouth) was able to cash in a total of $82,000 in pensions after he lost his seat because he had been classified as an employee rather than a contractor by the various municipal bodies he represented as attorney.

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