Convicted Pols Collect Thousands Before State Stops Pension Payments

SCRANTON — Pennsylvania’s State Employees Retirement Service usually punishes crooked politicians, by taking away their monthly pensions once these lawmakers are convicted of, or plead guilty to felony corruption charges.

But an Action 16 Investigation shows some of these lawmakers bringing home hundreds of thousands of dollars before SERS stops these payments.

We looked at the pension records of seven politicians convicted of, or pleaded guilty to corruption charges in the last few years.

*Former State Senator Bob Mellow (D) Lackawanna County, pleaded guilty in May to corruption and tax evasion charges.  Awaiting sentencing.

*Former State Representative Stephen Stetler (D) Erie County, found guilty in July on six corruption related charges.  Awaiting sentencing.

*Former State Representative Mike Veon (D) Beaver County, found guilty in 2010 of using taxpayer-funded bonuses to fund rewards for campaign related activities. Now serving 6-14 years in prison.

*Former State House Speaker John Perzel (R) Philadelphia, pleaded guilty in 2010 to eight corruption related charges, including using state related services for campaign purposes.  Now serving a 30 month prison term.

*Former State Senator Vincent Fumo (D) Philadelphia, convicted of 137 counts of public corruption related charges.  Now serving a five-year prison term.

*Former State Representative Frank LaGrotta (D) Beaver County, pleaded guilty to allowing ghost workers on his payroll.  LaGrotta was allowed to keep his pension because the use of ghost workers was not a crime considered worthy of losing a pension at the time of his indictment, and he continues to collect $48,000 a year.

*Former State Representative Linda Bebko-Jones (D) Erie County, pleaded guilty in 2008 to criminal conspiracy in filing false signatures to get on an election ballot. Bebko-Jones pleaded guilty to misdemeanor crimes and collected monthly pensions up to her death in November 2011.

Collectively, records show these seven collected $628,000 in one-time, lump-sum payments, and are entitled to it, because it is the money they put into their pensions.

But when it comes to monthly payments, even though the state stopped paying most of them when they were found, or pleaded guilty to corruption charges, the seven collectively had already taken in $907,000.

“I understand why people are outraged by that,” says State Representative Gene DePasquale of York County, a Democrat now running for State Auditor General.  DePasquale wants pension reforms that would stop those convicted of crimes in office from getting any monthly payments.

Former State Senator Stephen Stetler received the most pension money from montly payouts.

By the time of his July conviction, Stetler had already received $250,338 in monthly payments since leaving office in 2006.

Former State Senator Bob Mellow of Lackawanna County is second on the list. Mellow’s $11,549 per month pension payments were stopped in May when he pleaded guilty, but he had already taken in $196,858 over 17 months.

“That number is stunning,” said DePascuale when we showed him the records.  “That`s just a stunning number.”

Former State Representative Mike Veon, former State House Speaker John Perzel, and former State Senator Vince Fumo are all in prison for their corruption related crimes. But these three collected about $390,000 combined, before they started doing time.

“Some of these folks have been ripping the taxpayers off, the taxpayers are paying their defense, they go to prison and still profit,” says political activist Eric Epstein of rockthecapital.org.  He believes these crooked politicians delayed their cases as long as possible, so they could collect monthly pensions and receive thousands before the pension board could legally stop payments.

“There`s a disincentive for political officials who are accused of wrong doing to want a speedy trial,” says Epstein.  “They`re going to want to drag this out as long as they can, and right now, we don`t have the power to have them pay us back.”

Representative DePasquale says one solution would be to send a retired politician’s monthly payments into an escrow account once they are indicted on corruption charges.

“If they are found guilty, obviously the escrow can go back into the state pension system,” says DePascuale.  “But if they are found not guilty, then they can get their pension.”

But until any bill passes, critics warn politicians charged with corruption will continue to delay their trials, and collect thousands a month.

Former State Senator Ray Musto of Luzerne County could be an example.  He was charged in 2010 with taking bribes and lying to investigators when he was still in office. But through a series of delays. He still has not gone to trial.

Musto says he`s innocent.  And since his indictment in 2010, Musto has racked up more than $200,000 in monthly pension payments.

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