Judge Sees no Issue With Finagled Calif. Pension
(CN) - A court-appointed receiver for California prisons did nothing wrong when he took a job with a state agency to qualify for a pension, a Sacramento judge ruled.
J. Clark Kelso, formerly the chief information officer for the California Department of Technology, had been appointed to oversee California's prison medical program in 2008.
In a 2011 federal complaint brought on behalf of taxpayers, former state employee Daniel Francis claimed that Kelso then used the Administrative Office of the Courts to wash his salary.
He said that, two months after the appointment to receiver, Kelso took a job as a "special consultant" with the AOC, then loaned himself out to the prison system for the receiver job so that he could enroll in the California Public Employees' Retirement System (CalPERS).
In this position, Kelso allegedly enjoyed the perks of being one of the highest paid CalPERS recipients and lifetime health benefits.
After Francis filed supplemental points about his case against CalPERS with the court, a San Diego judge chimed in with an email Kelso sent him years earlier.
Judge Runston Maino had written Kelso to satisfy his stated interest, "both as a judge and as a member of the public who pays taxes, [in] where my money is being spent."
Kelso replied that his compensation would "have no impact on the Judicial Branch's budget."
"My placement within the judicial branch of government and the AOC for payroll purposes only was intended to provide me with the necessary independence from the governor's powers so that my independence as receiver would not be compromised," the receiver added. "Given that the governor and I have ended up in litigation against each other and that the governor has imposed an Executive Branch-wide furlough program, the decision to put me in another branch of government was a prudent one."
Judge Michael Kenny tentatively ruled that Kelso is a legitimate state employee eligible for CalPERS membership.
"Petitioner has failed to demonstrate that respondent's determination was invalid," Kenny wrote. "Petitioner accordingly has failed to demonstrate that respondent's determination was a violation of its constitutional duties regarding administration of the state retirement system."
Francis had also failed to prove that the AOC did anything illegal by employing Kelso, and that his pension is not a gift of public funds, since the state receives the benefit of Kelso's services as receiver, the ruling states.
Francis' attorney Michael White did not respond to a request for comment.
Judge Kenny affirmed the tentative ruling on Sept. 6.