Date: Sunday, July 6, 1997
Page: A1
JOHNCAHERState editor
ALBANY -- Without contributing a cent to the state retirement system or ever holding a full-time government job, Albany labor lawyer James Roemer has crafted a taxpayer-funded pension deal that officials say may be New York's sweetest.
By getting in early on an unusually good retirement plan and taking advantage of a quirk, the 52-year-old attorney will draw more from taxpayers when he retires -- at least $80,240 annually, and counting -- than the last two governors or the former chief judge, comptroller and attorney general.
And if he retires at 55 and enjoys a normal lifespan, Roemer could draw more than $1.2 million from taxpayers -- based in part on billing the system for working 708 days in a single year. And it's entirely legal.
``I'm a lucky guy,'' Roemer said. ``I was in the right place at the right time.''
He remains well-positioned.
Roemer is the lead contract negotiator for the cities of Schenectady, Saratoga Springs and Utica, for the town of Colonie and for Schoharie and Sullivan counties. From those six part-time public jobs, Roemer collects an annual salary of $174,973.
Roemer also is a partner in the Albany law firm of Roemer, Wallens & Mineaux. The firm has its own contracts with all six of Roemer's public-sector employers and about 35 other municipalities, enabling it to collect tens of thousands of dollars in taxpayer billings every year. As a partner, Roemer derives substantial income from those contracts.
How did he manage to get such a deal?
For one thing, he knows how to grease the wheels. Private correspondence obtained by the Times Union shows that in September 1991, Roemer helped raise funds for Democratic candidates for the Schenectady City Council by advising business colleagues to each contribute $99 each to the campaigns, which ensured that their donations would fall below the $100 threshold and stay out of the public record.
``Ask me if it happens today on occasion,'' Roemer offered in a recent interview. ``The answer: Yes.''
Roemer also was lucky enough to get into the state retirement system when it was ripe for manipulation -- before it was reformed. And he was smart enough to know it.
State Comptroller H. Carl McCall said there is apparently nothing illegal about Roemer's deals, but he does find them bothersome.
``While it is legal for a person to have multiple public employers, this situation represents an egregious manipulation of the retirement system,'' McCall said.
Aides to McCall said they could find no record of anyone with as many part-time public jobs as Roemer or anyone who had worked only part time and qualified for such a high pension.
Twenty-seven years ago, Roemer got in on a wildly expensive -- and long since abolished -- state pension plan. Tier I allowed even part-time workers to qualify for full pension benefits and didn't require a contribution. In 1971, a year before Tier I was replaced by a contributory system, Roemer took a part-time job as an attorney for the village of Altamont.
He eventually formed a law firm, Roemer & Featherstonhaugh. With his partner, James Featherstonhaugh, a skilled trial lawyer who became a well-connected lobbyist, Roemer built the firm into the largest in the region. He remained in the retirement system as a public employee.
Meanwhile, his law firm grew, in part through its work as counsel to the Civil Service Employees Association, and Roemer established himself as a contract negotiator. When the CSEA fired the firm in 1987, Roemer and Featherstonhaugh simply switched sides and started representing management. The firm expanded as it took on dozens of municipal clients.
But by 1994, Roemer and Featherstonhaugh were on the brink of a professional divorce, and Roemer began plotting his future. He convinced several municipalities to put him on the payroll as labor negotiator while retaining the firm to handle employment-related legal matters, usually involving human rights statutes or the Americans With Disabilities Act.
Typically, the total cost to the municipality for hiring Roemer and retaining his law firm was the same as it had been before he was placed on the municipality's payroll.
Schenectady, for instance, had been paying the law firm about $100,000 a year. The city put Roemer on its payroll at about $50,000 a year and paid the firm for about $50,000 a year in legal work.
Michael Brockbank, Schenectady's corporation counsel, said Roemer is the highest-paid part-timer on his staff.
``There was a deal made before I was here,'' Brockbank said. ``He wanted to be a part-time employee and the city agreed to it. They wanted to accommodate him. He brings to the city a certain amount of expertise that the city doesn't have in-house, somebody who specializes in labor. He brings some very valuable insight.''
Over time, Roemer managed to land six part-time jobs, every one of them adding to his state pension.
``It is a mutual benefit. The employer gets the same person year after year'' for contract negotiations, Roemer said. ``I get the obvious benefit of being an employee of those jurisdictions.''
Under Tier I, Roemer's pension is based on this formula: years of service divided by 50, multiplied by the average salary of a worker's top three years -- typically the final three working years.
So if he quit government work now, Roemer, with 27 years on the public payroll and an average ending salary of $148,592, would be eligible for a pension of $80,240. If Roemer keeps working at his present level until he is 55, when he will be eligible to begin collecting a state pension, he will collect over $89,000 annually.
If Roemer retires from his public jobs then and lives a normal lifespan, taxpayers will pay him $1.2 million in retirement benefits.
But Roemer can work as long as he likes under Tier 1 and still accrue benefits until the pension reaches 75 percent of his final average salary. In other words, with his current earnings, and never receiving a raise, Roemer could one day command a state pension of $111,444 a year.
By comparison, Mario M. Cuomo, who served 12 years as governor and, before that, four years each as lieutenant governor and secretary of state, has earned a pension benefit of $52,154, according to the state Department of Audit and Control. Although Cuomo did not accept his entire gubernatorial salary, he took the entire paycheck and then gave back $30,000 annually -- the end result being that his retirement benefit is based on what he legally earned, not what he decided to take. Still, Cuomo never earned more than $130,000 a year, and even though he worked full time, his benefits pale in comparison to Roemer's.
``It's the way the system works,'' said Assemblyman Eric N. Vitaliano, D-StatenIsland, chairman of the committee on governmental employees.
Vitaliano, a member of the state pension advisory board, said he is bothered by the unfairness of a man like Roemer earning lucrative benefits without working full time or contributing to the system.
``Under the constitution, there is no way to retroactively deprive someone of a benefit legitimately obtained. It is not a special deal. It is a deal that was available for everyone.''
One particularly beneficial quirk, of which Roemer has taken full advantage, is that Tier I allows employees to accumulate a full-time day's pension credit for less than a full day's work.
State records show that last year Roemer worked parts of 260 days for Utica, 240 days for Schenectady, 65 days each for Colonie and SullivanCounty and 39 days each for Saratoga Springs and SchoharieCounty. In each case, Roemer is credited with full-time hours.
For retirement purposes, then, he worked a 708-day year.
``The amount of time a part-time Tier I employee works is irrelevant. You get full-time credit,'' Roemer said. ``I put in between 60 and 70 hours a week in my public employment. I work the equivalent of two full-time jobs. I can assure you I am putting my time in. This is not no-show. I have work to do.''
Roemer's employers say he earns his keep.
``His reputation precedes him,'' said Douglas H. Astalagia, Utica corporation counsel. ``He is one of the best in the country regarding labor relations.''
Sullivan County Attorney Ira Cohen said if Roemer has figured out a way to bolster his retirement, well, good for him, as long as the county gets its money's worth.
``The bottom line is, as long as the fee is fair for what we pay him for, we are satisfied,'' Cohen said. ``If he is a good businessman (and) as long as it is not illegal, immoral or against public policy, it is OK with us.''