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State still paying thousands to felons who held office

11:03 PM CST on Thursday, January 31, 2008

Lee Zurik / WWL-TV News Anchor

In the more than five year's he's been in prison, former governor Edwin Edwards has collected checks totaling almost $300,000 from the state of Louisiana.

It's all from Edwards’ state pension or retirement, which is partly funded by taxpayers. 

In fact, state records, obtained by Eyewitness News show taxpayers help pay Edwards almost $60,000 a year in retirement benefits.

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“I think the reaction is, as a taxpayer, why am I paying for a retirement or a benefit for somebody who used the office that is entrusted to them to break the law,” said Barry Erwin, the president of the Council for a Better Louisiana.

Erwin said Louisiana is paying millions of dollars to current or former federal felons, who were sent to jail because of their illegal activity while in office.

Eyewitness News requested details on a handful of former state employees with a federal rap sheet.

The records show that former elections commissioner Jerry Fowler, who admitted to defrauding Louisiana of almost $900,000, is still paid almost $53,000 a year by the same state he defrauded.

Former senate president, Michael O'keefe - convicted not once, but twice - for bank fraud and obstruction of justice, receives $36,000 a year.

Former state insurance commissioner Sherman Bernard, who admitted to taking payoffs while in office, gets almost $30,000, former state senator Larry Bankston, who was convicted of accepting a bribe from a video poker company owner, receives more than $12,000. Former Jefferson Parish judge Ronald Bodenheimer, who was convicted for receiving gifts in exchange for lowering bond requirements, takes in more than $53,000 a year.

Former Jefferson Parish judge Alan Green has not started receiving benefits yet, but when he does, state records show he'll receive almost $50,000 a year.

In 2006, then state senator Art Lentini introduced a bill that would eliminate retirement benefits for any state employee convicted of a federal offense associated with their employment.  The bill did not pass.

“Taxpayers shouldn't have to fund a corrupt person's retirement for the rest of their lives,” he said.

Lentini says he was surprised by the resistance he got on the Senate floor where his bill died - receiving just 12 yea votes, and 23 nays.

“It irks me to see people sitting in jail collecting retirement when they're in jail because they violated the trust to the public,” said Lentini.

One group that came out against Lentini's bill is the board that runs Louisiana's state retirement system.

The concerns, the strong reservation expressed by our board, was the significant negative impact the legislation could have on the innocent spouse, or the innocent child of this individual,” said Cindy Rougeou, president of the board.

“My answer was that we put people away a lot for theft and crimes of violence and we don't worry about the spouses,” countered Lentini.

Rougeou says another reason the board came out against the bill is the small impact it actually has on taxpayers.

“The employee pays a substantial amount towards his benefit,” she said. “The retirement system pays a substantial amount towards the benefit, and I would say the state pays a smaller percentage.”

“It is a pension,” countered Erwin. “It's not like the average guy who has a 401K or something like that. You have to save that money up and hope it doesn't run out at the end or you outlive it.  This is a pension that lasts until you die.  And that's a pretty lucrative thing.”

Many other states have decided to adopt bills similar to Lentini's.  Eyewitness News looked at all 50 states and found at least 16 have some type of law that takes away benefits for federal offenders.

A similar bill, which applies to U.S. Senators and Congressmen, recently passed the house and awaits a vote in the Senate.

Next month, lawmakers in Louisiana could have another chance to end retirement benefits for federal felons.  State Senator Steve Scalise will introduce a bill and says it has the backing of Governor Bobby Jindal.

Scalise says that legally the bill will have to "grandfather" in anyone already convicted and will only apply to future offenders.

“Ultimately we won't be taking anything away,” said Scalise. “We will be setting a clear standard that if you violate the public trust, if you commit corruption, this is the price it's going to be.  Now you and your family will know that and if someone still chooses to cross that line, I think we've got to have a big hammer.”

To get a bill that prevents convicted ex-officials from collecting retirement pay, there would have to be a Constitutional amendment and voters would have to pass it.

Currently, governors, judges and legislators contribute 11.5 percent of their salary to the retirement system every year and the state contributes about 19 percent. The retirement benefits are fixed, so that, unlike a 401K, it doesn't matter if investments do well. Your benefit is calculated by the years of service, your average compensation and the classification of your job.