NCPBA Legislative Update: June 16, 2011

Jun 16, 2011

JUST WHEN THINGS COULDN’T GET WORSE . . . THEY DID.

LONG KNOWN LEO OPERATIVE, EDDIE CALDWELL, SEEKS TO PAD HIS OWN WALLET ON THE BACKS OF DISABLED COPS BILL.

UNPRECEDENTED MOVE COULD MEAN BIG RETIREMENT BUCKS FOR THE NORTH CAROLINA SHERIFF’S ASSOCIATION TOP EXECUTIVE WHILE CAUSING POSSIBLE LONG-TERM REDUCTION TO RETIREMENT BENEFITS FOR THOUSANDS OF LAW ENFORCEMENT OFFICERS AND OTHER LOCAL GOVERNMENT EMPLOYEES.

Following last week’s derailment of HB 602, LEO Fairness Act, it was thought that the North Carolina Sheriff’s Association (NCSA) opposition to PBA sponsored legislation was through.  Not so.

On Wednesday, June, 15, 2011, just hours before HB 538 (Remove Restrictions on LEO Disability Benefits) was to be heard in the Senate Pensions and Retirement Committee, PBA learned that committee chairman Senator Tom Apodaca planned to amend the bill by enrolling Eddie Caldwell and less than ten other NCSA employees into the state’s Local Government Employees Retirement System (LGERS).

As reported earlier, HB 538 which removed the one year restriction for disability retirement for officers with less than one year of service who are permanently injured in the line of duty, sailed though the full House 117 – 0 on June 3, 2011.  The Senate companion bill SB 443 unanimously passed the Senate P & R Committee last week and we were looking forward to the same support for HB 538 by this same committee which would place the bill on a fast track for passage into law this summer.

However, Senator Apodaca’s amendment changed that.  Eddie’s high jacking of HB 538 occurred without notice to PBA or any other stakeholders, including the State Treasurer’s Office, and Chairman Apodoca pushed passage of the amendment without allowing any public comment. 

WHILE CLEARLY MORALLY BANKRUPT, IS THIS LEGAL? 

Is it legal for an employee of a non-profit private employee/employer association to be enrolled in a public employee/employer retirement system?  The answer is apparently NO, unless such employee represents a recognized “instrumentality of the United States or any state or political subdivision.  And according to a June 14, 2011, opinion of the North Carolina Attorney General, NCSA is NOT an instrumentality of government and, therefore, Mr. Caldwell and his staff are not eligible for enrollment into LGERS.  The AG’s opinion goes on to say that “the addition of the NCSA as a participating employer in LGERS would adversely affect the system status as a governmental plan” and would put in jeopardy “the various factors upon which the IRS has historically relied in determining whether an entity is an agency or instrumentality of the State.”

In other words, such a change could prompt a federal IRS audit and investigation that could challenge the legality of your retirement system, and could lead to changes in the tax exempt status of the plan and other provisions which could substantially reduce retirement benefits for thousands of local law enforcement officers and other public employees.

WHY WOULD ANYONE DO THIS?

This begs the question, why would a person who has been a mainstay in North Carolina law enforcement circles for more than three decades risk damaging the retirement benefits of so many law enforcement officers?  Certainly, Eddie Caldwell is arguably the single biggest obstacle to professional standards of fairness and accountability of police conduct and administrative due process.  However, PBA and the NCSA have successfully worked together on many issues while endorsing several sheriffs, some of whom are even PBA members.

The answer may be in simply looking at the numbers.  According to a 2005 published media report, Eddie Caldwell had a reported salary from the NCSA then of one quarter of a million dollars.  Sources tell us that if the NCSA were to purchase additional time for Eddie to add to his time with the Attorney Generals Office years ago, the current retirement formula could put his annual retirement income from the Local Government Retirement System at almost $139,000 or about what our governor earns in yearly salary.

Such a sham by any standard would be repugnant.  To seek personal profit at the expense and possible destruction of a bill to protect permanently disabled police officers and their families defines a new low in disrespect for law enforcement officers, including our sheriffs’ own deputies.

IF YOU HAVEN’T HUGGED A FIREFIGHTER LATELY . . . YOU NEED TO.

Upon hearing about the attempt to highjack HB 538, members of the Professional Firefighters and Paramedics Association led by association President Dave Anders, were instrumental in mobilizing efforts to kill the amendment.  Their efforts, along with other groups and the state Treasurer staff, were key in helping Senator Martin Nesbitt to offer an amendment to remove the Caldwell amendment and return the bill to its original language.  After displacing the bill from the Wednesday, June 15^th Senate calendars, Senator Nesbitt’s amendment to HB 538 passed on Thursday, July 16, 2011, 49 to 1, with Senator Ralph Hise being the only dissenting vote.

HB 538 without the Caldwell amendment passed the Senate 50 – 0 and since this bill was returned to the originally passed House version, it was not necessary for the bill to be returned to the House for concurrence.  HB 538, if not vetoed by the governor, will become law.