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Guadagno’s Pension Maneuver in Sheriff’s Office Questioned

Judges’ release of documents in Guadagno case raises questions about legitimacy of Christie administration investigations

Credit: Governor's Office/Tim Larsen
Lt. Governor Kim Guadagno.

At the same time as Gov. Chris Christie has been calling for pension reform, his Lt. Governor, Kim Guadagno,has been fighting allegations that she improperly manipulated job titles while serving as Monmouth County sheriff. Her alleged goal was to enable a top deputy to keep collecting an $85,000 pension along with his $87,500 salary. Critics also say that Christie’s Attorney General’s Office and Treasury Department failed to properly investigate the charges

Four years after New Jersey State Policemen’s Benevolent Association President Anthony F. Wieners Jr. filed the first formal complaint calling for an investigation, two state judges last month ordered the release of internal Christie administration documents that not only bolstered the allegations against Guadagno, but raised questions about whether law enforcement or Treasury officials ever interviewed Guadagno about the case.

“The documents show Guadagno made false and misleading statements to enable Michael Donovan to continue collecting pension checks that should have stopped, and that she helped him circumvent the rules by playing around with job titles,” said Mark Lagerkvist, investigative editor for New Jersey Watchdog, who sued for release of the documents. “Based on the information released, there is a real question whether the Division of Criminal Justice did the legitimate investigation that the PFRS (Police and Firemen’s Retirement System) Board asked it to do.”

The release of documents in the Guadagno-Donovan case brings renewed scrutiny to the abuse of the pension system by “double-dippers” who are able to collect both salaries and pensions by exploiting loopholes in New Jersey’s pension system, whose seemingly byzantine rules, labyrinth of job titles, and exemptions for non-career positions are grist for the politically connected. Christie’s ally, Essex County Executive Joseph DiVincenzo, became a poster boy for the system’s excesses when it was revealed that he was drawing a $158,831 salary while simultaneously collecting a $68,861 pension from the same job.

The new attention to the Guadagno case comes at a particularly inopportune time for Christie, who recently cut $2.4 billion in pension payments and is preparing a comprehensive plan to cut the state’s pension and retiree health benefit costs. For Guadagno, it is likely to revive scrutiny of a questionable pension maneuver that she has managed to avoid answering questions about for more than four years -- just as she has refused to answer questions from reporters about Hoboken Mayor Dawn Zimmer’s charge that she threatened to withhold Sandy aid if Zimmer did not back a development represented by a Christie ally, and about whether she intervened to quash an investigation into the Hunterdon County Sheriff’s Office in 2010.

Since February, press officers in the governor’s office, the Attorney General’s Office and the Treasury Department have failed to respond to repeated requests for an interview with Guadagno and for information on Guadagno’s actions while serving as sheriff, the subsequent Treasury Department inquiry, or the investigation by the Attorney General’s Office.

Guadagno’s lone public comment on the case was a November 1, 2013, Associated Press interview in which she said her 2008 hiring of Donovan, a retired investigator, to replace Chief Sheriff’s Officer John J. Cerrato “saved the taxpayers of Monmouth County $50,000 a year, put a uniformed officer on the street, put a well-qualified retired law enforcement officer in his place.”

However, Guadagno’s decision to classify Donovan as a “chief warrant officer,” rather than as “chief sheriff’s officer” -- a position that is required to be in the pension system -- actually cost the deficit-ridden state pension system $227,000 in payments that were paid to Donovan while he was serving in a capacity that should have required him to suspend his pension and reenroll in the pension plan. It also cost the pension system $18,000 in pension contributions that Donovan would have been required to pay had he indeed been named chief sheriff’s officer.

Documents obtained by the Treasury Department and ordered released by Administrative Law Judge Linda Kassekert, included an August 21, 2008, memo by Guadagno announcing that Donovan would replace Chief Sheriff’s Officer Cerrato as “the new Chief of our Law Enforcement Division,” where he would supervise 124 uniformed officers, 24 civilian employees, and an $11 million budget, according to the department website.

The week before the announcement, however, Guadagno was already researching ways for Donovan to get paid by the Sheriff’s Office and continue to receive his pension, the Treasury documents showed. In response to Guadagno’s August 13 request for research into whether other counties used the position of Chief Warrant Officer -- a title outside the pension system -- Sgt. David Finck reported back in an August 25 memo that eight of the other 20 counties had someone in that position.

Guadagno formally appointed Donovan the following month as Chief Warrant Officer -- even though supervising the warrants division was just a small part of the overall responsibilities he had taken over from Cerrato. As Chief Warrant Officer, which was classified as a temporary position, Donovan could continue collecting his $85,000 annual pension and did not have to resume making payments into the pension fund, which he would have had to do if he had been named Chief Sheriff’s Officer.

Guadagno’s downgrading of Cerrato from chief sheriff’s officer to captain and her unusual “hiring of another individual from outside as Chief Warrant Officer, assuming the proposed demoted person’s duties” aroused sufficient concerns among the Monmouth County Board of Freeholders that it was the subject of a September 11, 2008, executive session, whose minutes were included in the Treasury records.

When the freeholders called Guadagno in for questioning in the closed session, “she apologized for not following the proper personnel procedures in hiring the new warrant officer and for not handling the impending demotion of the current Captain in a proper manner,” the freeholder board minutes said. “She went into great detail as to why she needs to hire a new person with authority and why the current Captain cannot continue his current responsibilities.”

What she evidently did not detail to the freeholder board was why Donovan would be assuming Cerrato’s full range of duties -- but not his title as chief sheriff’s officer.

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