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No Reform in Sight for Bipartisan Abuse of State Pension Loophole

Another reason for Christie’s mild reaction to DiVincenzo might be that Christie’s deputy chief of staff, Louis Goetting, also was engaged in the same practice, collecting an $88,860 pension from his years at the state Treasury Department plus $140,000 for his senior post in the governor’s office – a story that came out after the original week-long media feeding frenzy over Divincenzo. . Christie spokesman Michael Drewniak attempted to differentiate Goetting’s case by noting that Goetting actually had retired and had been called back out of retirement to join the governor’s staff.

But Goetting is just one of 19 officials serving in the Christie administration who are collecting a pension as well as a state salary. Under the Beck-Oroho bill, Goetting could have come back to work for Christie at the agreed-upon $140,000 salary, but he would have to give up his $88,680 pension while he did.

Christie on Wednesday appointed Jim Scott, a former U.S. Internal Revenue Service criminal fraud investigator who works in the state Attorney General’s Office, to head the new Treasury unit he created through an executive order Wednesday to investigate pension and disability fraud, develop recommendations for changes in practice, and refer cases for both criminal and civil prosecution.

“Siphoning of pension and disability benefits by fraud or ineligibility hurts everyone, including honest current and future pensioners and, above all, New Jersey taxpayers who support the system and expect it to be fair and free of fraud," Christie said in a press release.

Scott’s Treasury team, the governor announced, would work in cooperation with the Attorney General’s Office and state Comptroller Matthew Boxer, who worked in the U.S. Attorney’s Office under Christie before being tapped by his Democratic predecessor, Gov. Jon Corzine, to head the independent investigative agency almost five years ago.

Boxer, whose office has been aggressive in investigating pension fraud, reported last summer that 202 town and school board attorneys, engineers, and other professionals who were working part-time while continuing to illegally add years to their pension service in violation of laws designed to limit pensions to employees earning at least $7,500 a year.

Accrual of pension time while serving as part-time legislative aides or in other political positions paying the previous minimum of $1,500 a year was another way the political class had of rewarding supporters. Because pensions were based upon the highest three years of salary, a part-time legislative aide who spent three years in a patronage position in state or local government that paid $80,000 and spent 17 years collecting $1,500 a year as a part-time legislative aide for occasional work would receive a pension twice as large as a state worker in a psychiatric hospital who worked fulltime for 20 years and retired with a maximum salary of $40,000.

Christie supported the $7,500 minimum for pension eligibility that was included in the pension and health benefits bill he signed, and has been harsh in his criticism of Democratic foes -- as opposed to allies like DiVincenzo -- for practices he deems unethical.

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