By Michael G. Stogner
This article below is from the SacBee and it’s mostly about the reporting to CalPERS. Steve Landi also called the San Mateo County Whistleblower Hotline to report this in 2017. Who in San Mateo County handled that complaint? That would be a good question for the 5 Supervisors to answer.
CalPERS double-dip audit came too late
MANNY CRISOSTOMO SPECIAL TO THE BEE
Retired police officer Steve Landi stands in front of the Broadmoor Police Department in Daly City in January. Landi complained to the California Public Employees’ Retirement System in 2016 that Police Chief David Parenti was working full time, earning thousands a month, while illegally collecting retirement benefits. A CalPERS audit team determined that Parenti was one of three police chiefs and a top commander in the department who defrauded the pension system for a decade, together collecting as much as $2 million.
BY RANDY DIAMOND
Retired police officer Steve Landi complained to the California Public Employees’ Retirement System back in 2016 that his police chief was working full-time earning thousands a month while illegally collecting retirement benefits.
A CalPERS audit team finally arrived in May 2021. Last month, it said that, sure enough, Landi’s boss, Broodmoor Police Chief David Parenti was one of three police chiefs and a top commander in the department that defrauded the pension system for a decade, together collecting as much as $2 million.
It was one of the largest abuses of retirement benefits in years — so egregious that the local district attorney is considering criminal charges.
It also raises a question for Landi as well as Parenti’s two successors: Why did it take CalPERS so long to figure it out and take action?
“They were lining their pockets for years,” said Landi, who joined the department in 2015 after retiring from the San Francisco Police Department. “It’s corruption at its finest.”
CalPERS is a retirement system like no other in the U.S. It covers state employees but also the workers at some 3,000 municipalities, school districts, authorities and other governmental entities. More than 650,000 retirees and another 1 million or so current employees are covered by CalPERS.
A FAILURE TO COMMUNICATE
Broadmoor was under scrutiny by CalPERS for failing to enroll some officers in the pension fund at the time, but not for the chief’s double dipping. That suggests to former insiders such as J.J. Jelinic that the CalPERS division that monitors employee enrollment issues has little coordination with another unit assigned to examine double-dipping and other violations of state retirement law.
“The right hand doesn’t know know what the left is doing,” said Jelinic, a former CalPERS investment staffer and board member
Consider this irony: Landi said he and other police officers in Broadmoor were told by Parenti that the small 11-person department, two miles from the San Francisco line, couldn’t afford to enroll them in the CalPERS retirement program.
“He said the police department was going broke and we were encouraged to quit our jobs,” Landi said.
CalPERS officials insist they only learned or the double-dipping last year, but in 2017 they started requiring that Broadmoor enroll Landi and other members of the police force into CalPERS
Landi said in the same November 2016 email that he complained about Parenti. He also detailed how other members of the Broadmoor department were not enrolled in the retirement system.
CalPERS officials say they never received the complaint about Parenti. But they also say the membership division, which receives complaints about members not being enrolled in CalPERS is separate from the audit division, which examines issues like double-dipping — employees illegally receiving retirement benefits and working full-time.
Records show that Broadmoor repaid around $200,000 in back pension contributions to CalPERS for seven Broadmoor employees, including Landi, between 2017 and 2019, who were never enrolled in the pension’s system.
CalPERS spokeswoman Amy Morgan said a CalPERS employee not enrolling its workers in a pension system won’t necessarily automatically trigger an audit.
“The complaint was about membership enrollment issues, while the audit focused on working after retirement,” she said.
Morgan said CalPERS uses its own risk metrics, which she won’t specify, and complaints, to determine which of CalPERS 3,0000 employees to monitor. Around 240 audits are done a year. On that schedule, it would take more than 12 years for every CalPERS agency to be reviewed.
A ‘RED FLAG’ IS MISSED
Former Broadmoor Police Chief Mike Connolly, who was not charged with wrongdoing in connection with the CalPERS audit, said the back retirement payments Broadmoor was forced to make to CalPERS was a sign that there were larger problems.
“It should have been a red flag,” said Connolly, who had served as the third highest ranking police officer in the San Francisco Police Department before retiring and joining Broadmoor in 2019.
CalPERS rules prevent double-dipping at agencies that participate in the retirement program. Once retired, pensioners can only work part-time.
Broadmoor’s current chief Mark Melville is also perplexed on why an audit was not done on the police department earlier since CalPERS became aware of issues back in 2017 with employees not being enrolled in the pension system.
“They should have done a lot of things back in 2017 that they didn’t do,” he said of CalPERS.
RESULT OF THE AUDIT
The CalPERS audit found that Parenti improperly increased his yearly pension retirement from $93,000 a year to $152,292 a year by coming out of retirement in December 2012, working for 13 months and then retiring again. Even then, the audit said Parenti was never actually retired, continuing to collect more than $6,000 in salary per two week-pay period.
The audit said while continuing to work, Parenti also received a more than $100,000 disability payment from CalPERS, which shielded his retirement income from taxes. The disability payment under state law should have ended his work career at the Broadmoor Police Department.
Parenti joined Broadmoor in 2005 after serving as an investigator for the San Francisco District Attorney’s Office. One of his assignments was providing security for the then District Attorney Kamala Harris, now the vice president.
The CalPERS audit detailed how Parenti’s predecessor, Chief Greg Love also collected worked full-time while receiving retirement benefits and also received a disability payment of more than $100,000 but continued working.
POSSIBLE CRIMINAL CHARGES
San Mateo County District Attorney Steven Wagstaffe said he has launched a criminal probe that is examining whether Parenti and Love should be charged criminally.
Broadmoor is the last police department of its kind in California. It’s formally called the Broadmoor Police District. There is no Broadmoor City Hall. The police district taxes the approximate 4,000 residents of the unincorporated area of San Mateo County, covering an area of about 1.8 square miles, to fund its approximate $2 million budget.
It is surrounded by Daly City — population 107,000 — on three sides, and Colma — population, 1,500 — on another.
Connolly was present when the audit team arrived on May 10, 2021 at Broadmoor. He was eager to provide some new information about a Broadmoor “ghost employee” who was receiving CalPERS benefits.
“They said that’s for another day, they weren’t looking at those issues,” Connolly said.
The police chief said he also tried to tell the audit team that up to another 20 former Broadmoor employees dating back two decades had worked at Broodmoor , some for as little as a few months, and might be eligible for CalPERS benefits. Connolly said audit team members said that was an issue for the another team, the membership team.
A ‘GHOST EMPLOYEE’?
Connolly and Broadmoor’s current chief Mark Melville both say that the “ghost employee,” police officer Alan Johnson, never worked for the department, though police department records have him on the payroll from around 2003 to 2005.
Johnson had worked at the San Mateo County Sheriffs Office and other police agencies before his name started appearing on the Broadmoor payroll.
Melville said some records are missing but it’s likely that Johnson was loaned to a federal drug task force with Broadmoor footing the bill.
Yet, he said it would be “very unusual” for a small 11-person department, the size of Broadmoor, to be loaning an officer to another police agency.
“You wouldn’t see a department that small doing that,” he said.
Johnson has been receiving a monthly CalPERS retirement benefit of $4,538.16 a month for his reported Broadmoor work and from time at two other agencies that pay CalPERS benefits, show pension system records.
CalPERS spokeswoman Amy Morgan said CalPERS doesn’t plan a review of Johnson pension because a former Broadmoor employer, commander Ralph Cole, certified that Johnson had worked for and retired from the police agency back in 2005.
“If there is any other information that we should look at that says otherwise, please provide and we will review,” Morgan said.
Cole and Johnson were unable to be reached for comment.
The 2021 audit review came after the San Mateo County District Attorney’s Office forwarded an anonymous 2021 letter to the pension plan, citing the double-dipping at the police district. CalPERS officials also said they were planning the audit because of other information, which they won’t disclose.
CalPERS officials said its membership division, which handles complaints about workers not being enrolled in the retirement system, is separate from the audit division.
It is that separation and the resulting lack of communication that concerns Jelincic, the former CalPERS board member.
Jelincic said the problem is especially troubling with CalPERS underfunded by tens of billions of dollars, and more than 2 million people dependent on the pension system for the retirement,
“How many other employers are defrauding the system?” he asked.
CalPERS officials deny and say while audits can discover errors in pay classifications and other matters affecting retirement benefits, most aren’t intentional and are resolved.
Love also continued in his chief’s job after receiving his CalPERS pension and also received a disability award of more than $100,000 but that did not stop his Broadmoor paychecks.
CalPERs General Counsel Matt Jacobs rejects the assertions that it took CalPERS too many years to do the audit of Broadmoor.
“The claims by Broadmoor officials are like the criminals saying we should have caught them sooner,” he said in a statement.
A VOW TO DO THINGS PROPERLY
Melville who became Broadmoor police chief on Dec. 14, had worked for several California police agencies and was retired receiving CalPERS benefits.
He said he came out of retirement to fully comply with California law while working at Broadmoor and plans to make sure that everything is done properly at the police department.
“Broadmoor was mismanaged in the past,” he said
He said he also welcomes a late December CalPERS request for the payroll records of all current 11 employees saying the police department wants to follow all pension system rules.
Randy Diamond: 916-321-1145