Panel OKs ‘Pension-Spiking’ Curbs : Assembly: Inflation of pre-retirement salaries was uncovered by auditors in Huntington Beach, Anaheim and six other Southern California cities.

A bill to stop the kind of public employee “pension-spiking” recently uncovered in Huntington Beach, Anaheim and six other Southern California cities easily passed its first committee Wednesday.

The measure, sponsored by Assemblyman Dave Elder (D-San Pedro), would allow the state Public Employees’ Retirement System (PERS) to recover excess retirement payments and impose a 25% penalty against a local official who improperly inflates his final year’s salary for pension purposes.

Elder’s bill would also allow the $63-billion pension system to forward findings of such abuses to local grand juries and prosecutors, as well as extend the statute of limitations for criminal charges brought from those investigations from three years to 10 years.

“The 10-year statute of limitations is one for political corruption, and I think this is political corruption on a grand scale,” Elder said of the pension-spiking problem. The Assembly Public Employees, Retirement and Social Security Committee unanimously approved the measure; Elder is its chairman.

Among those testifying Wednesday for Elder’s measure was Robert C. Sangster, a Huntington Beach deputy city attorney, who said the city supports the bill because it would clear up “ambiguities” in state law about what kind of expenses can be lumped into pension calculations.

Sangster said it was a matter of interpretation when Huntington Beach included the value of vacation days and car allowances when calculating retirement payments for 16 former officials, including Councilman Earle Robitaille.

He said the city and the retirees were unfairly “tarred” in December in a state audit and press conference by Controller Gray Davis, who named former officials who “pig out” on inflated pensions.

And Sangster said the decision by Davis to publicly disclose names of the Huntington Beach retirees audited was designed to “grab attention” in Davis’ bid for the Democratic U.S. Senate nomination.

“I think the only conclusion you can come to is that the controller is trying to use the audit process for publicity for his Senate race,” Sangster said after the hearing.

Those named in the controller’s audit have not been charged with any crime. PERS officials said during Wednesday’s hearing that no civil or criminal penalty exists for pension-spiking.

Perhaps the most dramatic example found in Orange County by the audit involved former Anaheim City Manager William O. Talley, whose salary was bumped up from $97,390 yearly to $159,109 within the year before he resigned in 1987. Talley is now collecting his retirement payments while also receiving a salary of nearly $100,000 as city manager of Dana Point, which is interviewing replacements for Talley.

At the request of The Times, Davis also released names and specifics about the Huntington Beach findings in the audit. The figures showed that the last year’s salary for Robitaille was overstated by nearly $12,000 because it improperly included the value of vacation time and car allowances when he retired as fire chief in 1987.

In addition, the audit work papers named former Huntington Beach city administrators Charles Thompson and Paul E. Cook as beneficiaries of improperly padded pensions.

Davis said Wednesday that the findings of pension abuse by his auditors are “unimpeachable,” and not just a difference of interpretation.

“My auditors are longtime civil servants who work independent of who the current controller might be,” he said. “If Mr. Sangster doesn’t like them, that’s tough.”

He also suggested that comments by Sangster during and after Wednesday’s hearing were aimed at blunting criticism of Huntington Beach.

“What’s happening is that the officials in Huntington Beach are embarrassed, and they should be,” he said. “Inflated pensions are ripping off hard-working taxpayers and devaluing the honest effort of public employees.”