Orange County’s Auditor Controller Eric Woolery is locked in a heated battle with county retirement administrators and county executives over a quiet deal struck back in February to retroactively fund a pension for Supervisor Shawn Nelson’s first term in office – one in which he publicly fought to refuse a public pension.

Under the deal, uncovered this week by a Voice of OC public records request, Nelson paid a one-time payment of $75, 861.67 earlier this year to cover his employee contributions for his first term in office.

In exchange, county officials will pay $247, 625 over the next two years from his office budget to the retirement system as the taxpayers’ contribution to Nelson’s pension.

Since its disclosure, the deal has been raising questions.

To read the deal, click here.

Nelson describes the February deal as the end of a bureaucratic snafu over his involvement in the local pension system, dating back to 2010 when he first was elected.

That year, Nelson campaigned aggressively on pension reform and then immediately signed up for the most expensive public pension option upon his election that June.

After Nelson drew criticism for his choice, he then publicly pressed to be removed, which he was a couple of months later that August.

Yet he was a retirement system member for a few months.

That apparent wrinkle, Nelson said, triggered a quiet firestorm last year when Nelson was sworn into his second term, because he is now covered by the supervisors’ 2012 pension initiative, Measure B, which he helped author and pass.

Measure B was billed as a way to force county supervisors into a cheaper public pension. But by establishing a limitation, it ironically also formally prevents a supervisor from refusing to take a pension – a position that earlier supervisors, like Pat Bates in 2006 were able to do.

It’s a delicate twist that has offered Nelson a unique opportunity and left some former supporters like State Senator Pat Bates feeling really burned.

“I never campaigned on I won’t take a pension,” Nelson said. “That was never a part of my campaign.”

“I campaigned exactly on what Jerry Brown campaigned on, the system is screwed up and we need to fix it,” Nelson said, adding “I don’t want a pension.”

Ironically, Brown’s pension reform initiative banned retroactive purchases of time in pension systems.

If nothing else, the controversy is certainly a stark reminder to read the fine print on ballot initiatives sponsored by politicians.

Nelson said he opted to pay the full employee share of his pension, even though he didn’t technically have to because county supervisors didn’t pay the employee share of their pension back in 2010.

“I figured we’d be litigating this one day,” said Nelson. “I did what I thought was the right thing to do.”

Yet Woolery has forcefully questioned the discrepancy between Nelson’s current efforts to collect a pension and his very public stand in 2010 along with his “irrevocable” written decision that year to forgo a pension on government forms.

Woolery said OCERS officials would not show him any authorizing documents for the reversal on Nelson’s pension. And he questioned why such a radical change in position – and budget impact – would not be taken to the full board of supervisors for discussion.

“I’ve just been doing my job and what I think my elected duties are,” Woolery said, underscoring his point that he’s an elected fiscal watchdog. “I haven’t done anything outside the government code.”

“If I get a payment that is unusual, I have every right to hold it,” Woolery said.

Faced with what he termed to be stonewalling from OCERS on authorizing documents, Woolery reversed the first county payment installment to Nelson’s account earlier this year at the Orange County Employees Retirement System.

That triggered an angry response from retirement officials and a visit from District Attorney investigators to Woolery, investigating his actions as embezzlement.

Woolery – who said he felt significant political pressure — later rescinded the funds transfer after being offered an indemnification against liability.

“Eric Woolery does not determine eligibility at OCERS,” Nelson said.

Woolery said he still finds the whole deal suspect and still wants to fight the retroactive pension funding for Nelson – questioning its legality.

But Woolery said county officials have refused his requests to hire independent lawyers because County Counsel also represents Supervisor Nelson.

That’s the same board of supervisors that fast-tracked a request years ago by then Auditor-Controller David Sundstrom to seek outside counsel that would allow him to agree to a $73 million tax transfer to supervisors. A subsequent successful lawsuit by state officials termed the transfer as illegal.

Once Woolery started balking on payments this summer, he said county officials pushed to speed up the payments for Nelson’s pension.

Yet Woolery says he won’t authorize payments until he sees more information or unless he continues to be indemnified.

“Everybody is passing the buck and guess where it turns up? In my office because I have to write the check,” Woolery said.

County officials have taken a considerable amount of time to respond to Voice of OC records requests on the issue. Only this last week did they respond to a broad request releasing one set of documents confirming the deal.

So far there are numerous open questions, such as Nelson’s contention that OCERS asserts that there cannot be empty gaps in service for an employee thus taxpayers have to pay out nearly $250,00 on his behalf.

It’s also questionable that this never came back to the board of supervisors for a public discussion on such a high profile pension matter that has implications for future supervisors.

Nelson and County Counsel both argue that the board has nothing to do with deciding eligibility at OCERs – thus it’s a question between Nelson and the system.

Yet come on, these are the folks that just spent a month arguing over a dog, where a court had already taken action.

Thus, if Woolery hadn’t balked, no one in the public would know about Nelson’s new pension.

Woolery is also asking questions about extra money he says was deposited in Nelson’s 401A retirement account in lieu of him participating in the pension system – a similar move for Bates.

Thus, if Nelson now gets a pension, does he also get to keep the extra retirement account funds as well?

In addition, Measure B said it only applied to people taking office after 2012. That’s what Nelson and his chief of staff told me years back when I asked whether the ballot measure they were pushing would provide him a pension.

Yet now, that same measure is the reason he’s eligible for a pension.

There also a question about a reciprocity agreement with the City of Fullerton, where Nelson was a council member, that could potentially boost his pension even more — by as much as 13 times. My former colleague, Kimberly Edds at the OC Register, found that nugget back in 2010 but the issue became moot when Nelson said he wasn’t taking the pension.

It also looks like the issue goes much deeper.

According to selected documents released by the Auditor Controller’s office, it appears that last December, county officials were contacted by OCERS advising them that there were contributions taken in error from Nelson in 2010 and Bates in 2007.

However, Bates – who is past retirement age – doesn’t seem to be seeking the same remedy as Nelson.

The real moral of the story, so far, is to be thoughtful on campaign jingles – whether it’s pension reform, or immigration or gay marriage – because the promises politicians make at coffee shops and in speeches often present problems later when it comes to governing.

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