More than half of the disability retirements awarded to police officers under former Bell City Administrator Robert Rizzo — including those given to three police chiefs — should not have been granted, and workers' compensation settlements for 13 officers were "exceedingly large," an investigation has concluded.
As a result of those awards, the officers could receive millions of dollars in extra benefits. The advantage of a disability retirement is that only half of the pension is taxed; workers' compensation settlements are tax free.
The city investigation was prompted by the state retirement system after the Los Angeles Times inquired about allegations that one of L.A. County's poorest cities had used disability and workers' compensation to provide bonus pay to police chiefs Rizzo had forced out. The California Public Employees' Retirement System asked Bell to investigate.
The Times reported that in at least two instances, the city wrapped severance and unused vacation and sick time into the workers' comp settlements, which experts said violated tax laws.
Rizzo and seven other officials in the financially strained town have been accused of draining the city treasury by paying themselves enormous salaries, handing out generous pensions and lending city money to employees and businesses.
David Thomas, the attorney who conducted the city's investigation, said that if CalPERS arrives at the same conclusion as the city, he expects it will refer the matter to the district attorney. It is unclear whether the awards and settlements can be rolled back.
A CalPERS spokesman said the agency will conduct its own investigation. "If we believe the pensions were improperly awarded, we will take all steps necessary to recover the money, including referring the issues to the appropriate authorities for further investigation," spokesman Brad Pacheco said in an email.
The Times has also reported that the Internal Revenue Service is investigating.
In an email, Bell Mayor Ali Saleh called the retirement packages "another example of Rizzo's shameless disregard for Bell residents."
Because Bell is self-insured, the cost of the worker's comp settlements falls on the city.
In a four-page letter to CalPERS last week, Thomas said his investigation was "nothing short of a revelation." He said that the disability retirements were not justified in seven of the 13 cases, including those awarded to former chiefs Michael Chavez, Andreas Probst and Dennis Tavernelli.
None of the former police chiefs commented on the investigation's findings.
Chavez receives an annual pension of $117,942, Probst $160,649 and Tavernelli $169,027. Chavez received a workers' comp settlement of $140,00, Probst received $250,000 and Tavernelli $395,667.
A disability pension does not prevent them from taking other jobs.
Thomas said in an interview that the disabilities of the seven officers "were not justified based on the existing medical evidence."
In his letter, he cited Tavernelli as an example. The police chief suffered a heart ailment, and his doctor said he should limit his heavy lifting and have "no exposure to greater than ordinary amounts of stress."
Those restrictions would have prevented him from working as a patrol officer, but not as police chief, Thomas said. Tavernelli told the doctor he had planned to retire anyway.
"The clear implication is he wasn't forced to retire because of injury," Thomas said.
State law allows cities to approve disability retirements when an on-the-job injury prevents an employee from performing normal duties.
Rizzo cut a similar agreement to persuade Randy Adams to take the police chief job in 2009. Adams negotiated a deal that the city would support his application for a disability pension. Adams did not apply for a disability retirement when he left the chief's job in Glendale just before going to Bell. Adams stepped down from office when the Bell scandal broke in 2010 and his $457,000-a-year salary became public.
-- Jeff Gottlieb, Los Angeles Times