Investigative Report by Mark Lagerkvist
New Jersey Gov. Chris Christie’s new pension fraud squad won’t need to look far to find their first case.
They could start by examining a $245,000 pension abuse involving Lt. Gov. Kim Guadagno, Christie’s running mate and second-in-command. If not, the governor and the unit he created by executive order may be guilty of first-degree hypocrisy.
As Monmouth County sheriff, Guadagno made false statements that enabled her chief aide to collect both a pension and salary, totaling $172,500 a year. The story was first reported by New Jersey Watchdog in 2010.
Guadagno hired Michael W. Donovan Jr. as her “chief of law enforcement division” in 2008 at a salary of $87,500 a year. She announced the appointment in a memo to her staff. The sheriff’s official website identified Donovan as “sheriff’s officer chief,” supervising 115 subordinate officers and 30 civilian employees.
Donovan faced a legal problem. He was collecting an $85,000 a year state pension as a retired investigator for the county prosecutor. While double-dipping is often legal in New Jersey, this case was different.
Since the position of sheriff’s officer chief is covered by the pension system, Donovan should have been required to re-enroll in the retirement plan, stop receiving benefits and resume contributions to the state retirement fund.
Instead, Guadagno falsified Donovan’s job title in several documents so her aide could get two checks, not just one.
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 not part of the pension system. A chief warrant officer is responsible for serving warrants and other legal documents.
However, on Guadagno’s organizational chart, Donovan was listed as chief of law enforcement. The position of chief warrant officer was not on the chart.
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.
The favor was repaid. The following year, Donovan campaigned for Guadagno and Christie as Monmouth County chairman of the “Law Enforcement for Christie-Guadagno” team in the 2009 gubernatorial election. (Click here for New Jersey Watchdog’s story on LECG’s 12 double-dippers.)
If the state decides Donovan violated pension law, he could be forced to repay $245,000. The stakes are also high for Guadagno.
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.”
The PFRS Board of Trustees voted in May 2011 to call for a criminal investigation of Donovan – a probe seemed destined to implicate Guadagno. But the case was referred to the Attorney General’s Division of Criminal Justice, where it was riddled with apparent 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 plus pensions, New Jersey Watchdog found.
- The attorney general is a Christie appointee faced with the task of an investigation involving fellow cabinet member Guadagno.
What happened to the 27-month-old investigation is a mystery. Spokespersons for Christie, Guadagno and DCJ have declined comment.
Now there is another conflict. To head the pension fraud unit, Christie selected Jim Scott, a DCJ investigator with a $100,810 annual salary.
“He is extremely well-suited and highly qualified for this important role in my Administration to protect the pension and benefits system for state employees and New Jersey taxpayers,” said Christie in a press release.
Scott is also in a prime position to protect boss Christie and his campaign from embarrassing disclosures in an election year.
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