Legislators should kill SB912 SD1, RELATING TO THE EMPLOYEES’ RETIREMENT SYSTEM, despite its support from some “good government” activists.

A public hearing is scheduled Tuesday morning on the bill that could lead to the forfeiture of 1/2 of all pension benefits otherwise due to any public employee, active or retired, who is convicted of a felony “related to the State or county employment of the individual.”

Here’s the summary that appears in the hearing notice from the House Committee On Labor & Tourism:

SB 912, SD1
RELATING TO THE EMPLOYEES’ RETIREMENT SYSTEM.

Authorizes a court to order the forfeiture of one-half of the Employees’ Retirement System (ERS) benefits of an ERS member, former member, or retirant upon conviction of the individual for a felony related to the State or county employment of the individual. Authorizes designated beneficiaries to receive the ERS benefits to which the member, former member or retirant would be entitled under this section upon the death of the member, former member, or retirant. Prohibits designated beneficiaries convicted of a felony under the same set of circumstances as the member, former member, or retirant who was subject to forfeiture of ERS benefits from receiving benefits. Effective 7/1/2050. (SD1)

Common Cause sent out a call to its members to submit testimony supporting passage of the bill as amended.

This is one where I don’t support the Common Cause recommendation.

I personally find the bill far too vague. It fails to clearly define the types of egregious violations of public trust that could trigger the loss of earned pension benefits. The plain language of the bill does not define the triggering conditions except for conviction on felony charges “related to” the person’s public employment. What, exactly, does “related” mean? That’s very vague. In my view, far too vague when you’re talking about taking away such an important benefit of public employment, and one that is protected by the Hawaii State Constitution.

Note that the bill is not limited to “public officials” but would apply to all public employees, and the type of felony charges that could trigger forfeiture are not further defined.

Hawaii ranks felonies by seriousness, with Class A felony being the most serious, and Class C being the least serious.

Not being a lawyer, I went searching online for examples of Class C felonies, and found this: “Theft of property worth more than $300 is an example of a class C felony.”

Certainly loss of half of all earned pension benefits would be a disproportionate response to conviction for a minor theft, or other Class C felony, in my view at least.

State law already allows fines to be imposed that vary according to the seriousness of the crime. The potential value of pension benefits to be forfeited goes far beyond the types of fines already authorized for the most serious crimes such as first-degree murder. That doesn’t seem justified in all but the most extreme cases.

§706-640 Authorized fines. (1) A person who has been convicted of an offense may be sentenced to pay a fine not exceeding:
(a) $50,000, when the conviction is of a class A felony, murder in the first or second degree, or attempted murder in the first or second degree;
(b) $25,000, when the conviction is of a class B felony;
(c) $10,000, when the conviction is of a class C felony;
(d) $2,000, when the conviction is of a misdemeanor;
(e) $1,000, when the conviction is of a petty misdemeanor or a violation;
(f) Any higher amount equal to double the pecuniary gain derived from the offense by the defendant;
(g) Any higher or lower amount specifically authorized by statute.
(2) Notwithstanding section 706-641, the court shall impose a mandatory fine upon any defendant convicted of theft in the first or second degree committed by receiving stolen property as set forth in section 708-830(7). The fine imposed shall be the greater of double the value of the stolen property received or $25,000 in the case of a conviction for theft in the first degree; or the greater of double the value of the stolen property received or $10,000 in the case of a conviction for theft in the second degree. The mandatory fines imposed by this subsection shall not be reduced except and only to the extent that payment of the fine prevents the defendant from making restitution to the victim of the offense, or that the defendant’s property, real or otherwise, has been forfeited under chapter 712A as a result of the same conviction for which the defendant is being fined under this subsection.

Look at the last provision, which spells out mandatory fines for conviction for receiving stolen property.

There is no similar specificity in the proposed bill calling for forfeiture of pension benefits.

I agree with the impulse behind the bill, the idea that public officials and public employees should not be able to defraud the public, undermining public confidence in government in the process, and still reap the benefits of public employment despite their criminal misconduct.

But to achieve that ends, it seems to me that significantly more specificity is required, to that it is clear that forfeiture would apply only to egregious abuses of public trust, and only certain kinds of offenses.

Legislators should take a cue from the testimony submitted by the State Ethics Commission during an earlier Senate hearing. The commission supported the “intent” of the bill, not the language in the current measure. Here’s an excerpt from their testimony.

The Commission supports additional penalties for extreme abuses of power. This measure will provide an additional deterrent to those few state employees who may seek to use their official positions, and the power of their offices, to commit employment-related felonies. The Commission agrees that such a severe consequence – forfeiture of retirement benefits – should come only after conviction of criminal activity.

I agree. The problem is that the bill, as written, is not limited to such “extreme abuses of power.”

For now, the legislature would be wise to hold this bill until its scope and application are more clearly and appropriately limited to those cases of extreme abuse of public power and public trust.