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 Report by Mark Lagerkvist

Posted On November 19, 2012

TRENTON — New Jersey Watchdog has won another battle in its fight for public records detailing Lt. Gov. Kim Guadagno’s involvement in a pension scandal.

state appellate judge denied a motion by the Attorney General seeking to stop the Government Records Council, another state agency, from reviewing Treasury files requested by the investigative news site.

As a result, Treasury officials must comply with a GRC order to turn over 26 documents for inspection.  After review, the Council will determine which documents, if any, should be released to New Jersey Watchdog under the Open Public Records Act.

The records focus on an alleged $245,000 pension scheme while Guadagno was Monmouth County sheriff. The story was first reported by New Jersey Watchdog in 2010.

Treasury officials gathered the documents during its inquiry of whether Guadagno’s chief officer, Michael W. Donovan Jr., improperly collected nearly $85,000 a year in state retirement pay in addition to his $87,500 annual salary.

In 2008, Guadagno hired Donovan, a retired investigator for the county prosecutor, as the sheriff’s “chief of law enforcement division.” She announced the appointment in a memo to her staff. The sheriff’s official website subsequently identified Donovan as “sheriff’s officer chief,” supervising 115 subordinate officers and 30 civilian employees.

But Donovan faced a legal problem. As a sheriff’s officer chief — a position covered by the pension system — Donovan should have been required to stop receiving pension checks, plus resume his contributions to the state retirement fund.

So Guadagno lied about Donovan’s job title, enabling her chief officer to double-dip.

In county payroll records, the oath of office and a news release, Donovan was listed as the sheriff’s “chief warrant officer” – a similar sounding, but low-ranking position that’s exempt from the pension system. A chief warrant officer is responsible for serving warrants and other legal documents.

On Guadagno’s organizational chart, Donovan was listed as chief of law enforcement. The position of chief warrant officer cannot be found on the chart.

The following year, Donovan campaigned for Guadagno and Gov. Chris Christie as Monmouth County chairman of the “Law Enforcement for Christie-Guadagno” team in the gubernatorial election. (Click here for New Jersey Watchdog’s story on LECG’s 12 double-dippers.)

While sheriff’s chief, Donovan pocketed $227,000 in checks from the Police and Firemen’s Retirement System. Since he did not re-enroll in PFRS, he avoided another $18,000 in contributions. If the state decides Donovan violated pension law, he could be forced to repay $245,000.

The stakes are also high for Guadagno and her boss, Gov. Christie, who faces a re-election campaign next year.

Under state statute, “Any person who shall knowingly make any false statement or shall falsify or permit to be falsified any record or records of this retirement system … shall be guilty of a misdemeanor.”

After its review of the circumstances, the Treasury failed to take conclusive action. Not satisfied with that result, the PFRS Board of Trustees voted in May 2011 to call for a criminal investigation of Donovan — plus parallel instances involving John Dough, of Essex County, and Harold Gibson, of Union County.

The case was referred to the Attorney General’s Division of Criminal Justice. However, the DCJ investigation is riddled with potential conflicts of interest:

  • Guadagno is DCJ’s former deputy director. She held the post from 1998 to 2001.
  • Nearly two dozen DCJ investigators and supervisors are “double-dippers” who collect state paychecks and pensions.
  • Attorney General Jeffrey Chiesa, a Christie appointee, is ultimately in charge of the probe of fellow cabinet member Guadagno. Chiesa is also former chief counsel to Christie.

Christie has not publicly addressed the issue of whether an independent prosecutor should be appointed to handle the case. Spokespeople for Christie and Guadagno have declined to comment. Representatives for Chiesa have not responded to questions about the investigation.

The records battle began in March 2011 with an OPRA request.  When Treasury officials refused to release the documentsNew Jersey Watchdog filed its complaint with GRC.

In its July 2012 decision, the Council rejected Treasury’s blanket assertion that records of the probe were exempt from review.

The GRC’s findings led to the state Treasury’s unsuccessful plea to the Appellate Division of Superior Court. The motion by the Attorney General on behalf of Treasury was opposed bybriefs from New Jersey Watchdog and GRC.


Michael Donovan takes his oath of office, witnessed by his mother, Emily; Kim Guadagno and the Hon. Lawrence M. Lawson