Santana: Playing with Pensions

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.

  • John Claxton

    What a racket! The goon squad send over the DA’s enforcers for scare tactics. Anyone else check out the dates this was signed. Approved in 2 days. Never see the county move that fast on nothing. Looks like a huge helping of public funds! Wow. Follow the money. Bigger story to follow.

    • Kathleen Tahilramani

      What is terribly sad is the pattern of bigger story ….no accountability, bigger story, no consequences. bigger story…..nada. If there are no consequences there will be no change.

  • octaxpayer

    Why do they allow the “one-time payment” ? I know of other directors and such that took advantage of the same. Seems like another way to scam tax $$$. Anyway again nothing will happen we lose again.

  • LFOldTimer

    “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.”
    True dat.
    Norberto, you must feel like a sanitation worker given a brillo pad and a bottle of Ajax and told to keep the County’s sewer lines clean.

  • Jacki Livingston

    Well, well, well…so another of the five Emperors has no clothes? Color me surprised, Batman! I remember well all of Nelson’s posturing and posing about pensions, at the time when they were stabbing us in the back over ours. What a lying dog…and not the cute kind, though I do hope that Karma catches up with Nelson someday, over this and all of his other evil.

  • LFOldTimer

    Paging Shirley Grindle……Paging Shirley Grindle…….Please call the Situation Room ……We have a scenario to run past you…….

    • Jacki Livingston

      LOLOLOLOL…I have an image of Morgan Freeman from “Olympus Has Fallen” calling that out. Because, of course, everything sounds better when Morgan Freeman barks it. 😉

    • David Zenger

      MIA. Maybe Shirley was buried alive when a giant stack of index cards fell on her.

      • Kathleen Tahilramani

        I’ve fallen and I can’t get up…………..

  • OCservant_Leader

    So Sup Nelson schemed up the whole Ballot Initiative just so he could be “forced” to take the very Pension he claimed he was against?


    I actually had respected his stance on consistently being against Pensions…(like Bates) now to find out it was a scam?

    That OC Pension makes seemingly good decent people do very corrupt evil acts.

    • David Zenger

      “So Sup Nelson schemed up the whole Ballot Initiative just so he could be
      “forced” to take the very Pension he claimed he was against?”

      No. It was schemed up as a political gesture to look like he was doing something toward “pension reform,” and it had the almost immediate benefit of painting OCERS members Janet Nguyen and Todd Spitzer into a corner in January 2013 when they were to be sworn in.

      I never heard Nelson and/or Bilodeau discussing how this would turn out to be of beneficial to Nelson in 2015.

      Of course lots of unsavory things were deliberately kept out earshot from me…

      • LFOldTimer

        “I never heard Nelson and/or Bilodeau discussing how this would turn out to be of beneficial to Nelson in 2015”.
        Well, as you said, just because you didn’t hear it, it doesn’t mean it never happened.
        Let’s dissect this. Nelson’s a lawyer. Nelson authored or co-authored the ballot measure that led to his mandate to accept a pension after he ran on an anti-pension platform to get elected.
        Do you expect us to believe that Nelson had no idea how the ballot measure that he either wrote or co-wrote would affect his own pension status?

        • David Zenger

          All I know is what I heard. Other than that I cannot say.

    • Jacki Livingston

      Sadly, you are not the only one. I remember Rep. Ken Calvert waxing on and on about Nelson’s commitment to ethics and ‘no-nonsense’ government when he called Nelson about the embezzlement I reported. Of course, Nelson then had his Chief of Staff Dave Wiggins email and ‘handle me’. Wiggins failed, miserably, but it is funny how many GOP bigwigs thought that Nelson was an ethical man. Dey wus rrrrrrooooooong!

    • Kathleen Tahilramani

      WHAT! You don’t believe Nelson that he accidentally on purpose wrote a Ballot Initiative to give himself a pension he hates? It was just a unfortunate misfortune. Now he is a victim of getting a pension. Poor baby! The Horror of it all! He is as fake as his hair color!

  • Kathleen Tahilramani

    Ah, the eternal quest for enlightened self-interest. Nelson is self-serving but that is not new news. As for Woolery – the 5th floor quest to get rid of him just went into high gear. Politics is a dirty business and Woolery just made himself a big target. Sad.

    • Jacki Livingston

      Kathleen, the 64 thousand dollar question is…will Woolery get his pension when they force him out? Counting down…five, four, three, two…………..

      • LFOldTimer

        If you happen to be Tom Mauk you get a going away party with a full BoS attendance and a nice sweet golden parachute – my guess is if you happen to be Woolery you get the Guillory treatment.

        • Jacki Livingston

          No doubt. Poor Woolery. He probably thought that if he spoke up, then logic, decency and common sense would prevail. Poor, delusional man…

      • Kathleen Tahilramani

        Well, the 5th floor goal will be to get rid of him before he qualifies for a pension. That is what the BOS calls a “goal”.

    • OCservant_Leader

      “Woolery just made himself a big target”…ain’t that the truth!

      They will use all underhanded tactics to force out the law abiding…rule following elected professional.

      It will be a war zone at the AC. Watch how the BOS will dismantle his budget, cut off HVAC, create phone line problems and HR quagmires are just the beginning of what’s in their bag of tricks.

      • Kathleen Tahilramani

        Oh my, I do fear they will open their magic bag of evil tricks, they are paging Leon as we speak!

  • LFOldTimer

    I’ve read in the rumour mill that Nelson might eventually consider a run for a judgeship. I don’t think this situation will help him. It’s somewhat altered my opinion of him. After reading about this maneuver I’d be hesitant to give him my vote, whereas before, I was very open to the idea. As a lawyer and the author or co-author of the ballot measure, he certainly must have known the impact it would have on him personally. Why do the ones in politics I halfway trust end up falling from grace? Is there anyone left who can walk the straight and narrow? Or should I throw my arms up, say ‘screw it’ and just go fishing?

    • David Zenger

      Go fishing. The return on your investment of time will be a lot higher.

      • Jacki Livingston

        And the slippery fish are much easier to hook and catch.


  • Ltpar

    Nelson is just another political hack out do what is best for him. He knew what he was doing all along and thought he could sneak in the back door, which he did. Voters should keep that in mind before voting for Nelson in the future.

    • KenCoop

      He’s termed out.

      • LFOldTimer

        I thought Nelson was in his 2nd term. Don’t they get 3 shots at it? How time flies.

  • occynic

    Norberto, have you done a public records request for Nelson’s “irrevocable”written statement to forgo the pension?
    It is Woolery’s job to make sure he only issues checks that been correctly authorized. That is what he was elected to do. And for that the DA ends up in his office? Would love to see who called the DA with this load of crap. There is another records request.

  • occynic

    “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.”
    Who is authorizing the payment of almost $250,000.00? Doesn’t a payment of that size have to come before the BOS? And how does Nelson have that much extra money in his budget? Are the residents of the 4th getting less service to pay off his pension? And why isn’t he going to take the lower pension, not the higher one from when he first took office?
    Why does everyone in Nelson’s office always play the “it’s not my fault, I have to do it, it’s always someone else’s fault card”?
    Don’t let this one fade away Norberto.

    • David Zenger

      All of the Supervisor’s budgets are intentionally inflated up so that they won’t be overrun and have to come back later for a transfer. So long as budgeted staff aren’t increased the budget office and the BOS wouldn’t get involved.

      Still, I don’t see how Nelson’s budget could carry that hit in a single fiscal year – so it was likely covered in both 2014-15 and 2015-16.

  • Paul Lucas

    Its funny that you seem surprised.

  • David Zenger

    “…and then immediately signed up for the most expensive public pension option upon his election that June.”

    No, that’s not correct. I well remember seeing the OCERS sign-up form on his desk for a couple on months, at least. It just sat there for a long time.

  • LFOldTimer

    Even though Nelson ran for Supervisor on a promise not to accept a County pension we know he wanted one so badly that he could taste it. So what did he do? Oh, he just went and helped write a ballot initiative that seemingly reduced pension benefits for Supervisors while it (cough, cough) mandated that Nelson not only receive a pension, but get paid retroactively in benefits(six figures) during his stint as Supervisor. Pretty slick, eh? ha. Oh wait, but the good Supervisor tells us that it wasn’t ‘purposeful’. 😉 I’ve rolled my eyes so many times at this elected board that people think I’ve having convulsions. It’s so friggin’ sad. I wonder what Ms. Grindle has to say about this? Will her latest Commission initiative that will cost the taxpayers millions of dollars to put into motion put a halt to occurrences like these? N-O-P-E. Not even close. ha. And then these people act offended when their poll approval rankings are down in the teens. ha. Kabuki theater at it’s finest. Oh, and why didn’t Nelson mention how this pension ballot initiative (which he helped author) that passed would effect his personal pension situation? According to him “nobody asked”. How’s that for a knee-slapper?

    • David Zenger

      “which he helped author”

      He was the one and only author.

      • LFOldTimer

        Ah, thanks for the info. No idea how Nelson could talk about this with a straight face. Oh well. We just slipped a little farther down the slippery slope. Everybody was so high on Nelson when he ran for office. He was going to be the game changer. The anti-establishment politician. How is it possible to have any faith or confidence in today’s political system? 35 years ago if something like this happened there would have been big talk of a recall. Today? What else is new? I practically feel like I’m living in TJ.

        • David Zenger

          Whatever its ostensible purpose, that ballot measure was design to immediately catch both Spitzer and Nguyen who were already into OCERS and who were to be sworn in after 01/01/13 – the date specifically chosen for that reason.

          That way they would either have to legally challenge the Charter or just take the lower formula to avoid pension hysteria embarrassment.

          How ironic.

  • David Zenger

    Fortunately, Shirley Grindle’s initiative will fix this sort of ethical vortex….oh, wait. No it won’t.