More Questions In CHP Disability Fraud Probe

Friday, November 24, 2006

We've been telling you about the CHP turning over nearly two dozen suspicious cases of potential medical pension fraud to the state. But, the state's largest pension fund for public employees is forbidden by law to investigate some of those cases.

ABC7 has now learned that one of two separate investigations has ended.

One investigation was launched by the Sacramento County District Attorney, who convened a secret grand jury.

The other was by Calpers, which administers the state retirement system. We've learned that Calpers has finished its probe, but its findings leave more questions than answers, and even they are frustrated.

The CHP turned over 21 suspicious cases to Calpers. This after the CHP's fraud task force investigated possible abuse of disability retirement, specifically among its highest ranking officers.

Most startling of all, 80 percent of assistant chiefs retired on disability. Almost as many deputy chiefs did the same.

Sixty-eight percent of assistant CHP commissioners were disabled when they retired. Investigators found that the CHP had the highest rate of disability retirements in state government.

Calpers investigators cleared 11 of the 21 cases which they received from the CHP. It is seeking restitution in another case after finding that the retiree was not disabled.

But Calpers investigators dropped the remaining nine suspicious cases, saying their hands were tied by state law, because all nine retirees were over the age of 50.

Calpers spokesperson Pat Macht explains.

Pat Macht, Calpers Spokesperson: "If they have a disability retirement and they reach over age 50, we really don't have any enforcement tools to go against them for that kind of fraud."

Specifically, state law forbids Calpers from requiring disabled retirees who are 50 or older to submit to another medical evaluation, even if there is evidence of possible fraud.

Macht wishes Calpers had that kind of authority.

Pat Macht, Calpers Spokesperson: "We don't have a law today that allows, takes fraud and makes it a criminal penalty."

State Sen. Jackie Speier, (D) San Mateo: "When there's abuse going on, when you're ripping off the taxpayers, its not acceptable."

Outgoing State Senator Jackie Speier says powerful lobbying interests killed pension reform bills, including her legislation that would have given Calpers that kind of leverage.

State Sen. Jackie Speier, (D) San Mateo: "I carried legislation that would have allowed the PERS system, the Public Employees Retirement System to call back disability retirees once during a three year period of the time after they went on disability retirement to just confirm that they are still disabled."

The CHP fraud task force also referred suspicious cases to the Sacramento County district attorney for possible criminal prosecution.

The DA convened a grand jury, which is currently in the midst of its investigation.

Grand jury proceedings are of course secret, but our sources tell ABC7 they expect the grand jury to end its investigation soon.

One source says the panel has subpoenaed more than two dozen people since mid-October and that the jurors are looking not only at specific cases but at the entire practice of what was known as "chiefs disease."

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