Court ruling could allow feds to seize Silver and Skelos’ pensions By Kaja Whitehouse August 17, 2016 | 2:46pm
A federal Court of Appeals ruling Wednesday could pave the way for federal authorities to seize the state-protected pensions of corrupt politicians like Sheldon Silver and Dean Skelos.
The ruling, in the case of convicted former Bronx Assemblyman Eric Stevenson, found that his pension contributions are fair game as the feds seek to recoup $22,000 in ill-gotten gains.
The court sided with the government’s argument that federal law trumps state constitutional protections of retirement funds when it comes to forfeiture.
“Convicted politicians should lose pensions paid for by taxpayers they betrayed,” Manhattan US Attorney Preet Bharara tweeted about the ruling.
Bharara said he was going to start going after pensions in 2013 when testifying before the now-defunct Moreland Commission, which was established by Gov. Andrew Cuomo to go after public corruption.
And he made Stevenson a test case.
Bharara told the Moreland Commission that his office had just adopted a new set of policies to go after public officials’ pensions – starting with Stevenson, a former member of the Bronx New York Assembly, and disgraced ex-state Sen. Malcolm Smith, both of whom were arrested on corruption charges that year.
“A galling injustice that sticks in the craw of every thinking New Yorker is the almost inviolable right of even the most corrupt elected official – even after being convicted by a jury and jailed by a judge – to draw a publicly-funded pension until his dying day,” Bharara said at the time.
Bharara blamed New York state lawmakers for protecting corrupt politicians’ pensions.
“That error of state law, partially fixed a couple of years ago, must succumb to common sense. The common-sense principle is a simple one: Convicted politicians should not grow old comfortably cushioned by a pension paid for by the very people they betrayed in office.”
On Wednesday, the New York Appeals Court said it agreed with Bharara and ruled that Stevenson’s pension should be considered an asset that could be tapped toward the $22,000 in ill-gotten gains he was ordered to forfeit. The court cited federal law, saying it trumps state laws protecting pensions.
“Stevenson argues that identifying his pension plan contributions as a substitute asset and permitting seizure by the Government was error as those contributions are protected by… the New York State Constitution,” said the three-judge panel. “We disagree,” the judges said.
Wednesday’s ruling by the New York Appeals Court gives corrupt politicians like Sheldon Silver, former speaker of the Assembly, and Dean Skelos, a former state Senator, less wiggle room to appeal the money they have been ordered to fork over, which is based in part on both of their pensions.
At former state Senate Majority Leader Skelos’ sentencing, prosecutor Jason Masimore warned that Skelos’s “victims are going to keep paying Dean Skelos under his pension agreement,” that requested that his fine be reflective of that.
Judge Kimba Wood agreed and ordered a fine of $500,000, which she said was more than one-half that value of his pre-tax pension.
Disgraced ex-Assembly Speaker Silver’s $70,000 a year pension was also taken into account was ordered to fork over $5.3 million in illegal profits on top of a $1.75 million fine.
“Mr. Silver’s New York pension, which he filed for just days after being convicted, has a present value of approximately $850,000. I have taken that into account in setting the fine,” Judge Valerie Caproni said at his sentencing in May.