Iverson claims ignorance at time of offered benefit

By JOSEPH R. LaPLANTE, Valley Breeze & Observer Managing Editor

SCITUATE - Rhode Island Municipal Employee Retirement System records disclose that seven of the 13 persons who served on the Town Council with former councilman Richard Iverson elected to join the state's pension system in the same period he contends he was unaware of the benefit, according to documents obtained by The Valley Breeze Observer.

Iverson is now attempting to fill that 10-year void in his pension eligibility by convincing the municipal employee board that when he failed to apply for inclusion in the system between 1983 and 1993 it was due to, in the words of separate affidavits signed by him and Council President Robert Budway, "inadvertence, mistake, and excusable neglect on the part of the town or the employee (Iverson)."

When Iverson inquired about his accumulated pension benefits with the state agency in February, the retirement system's assistant director Diane S. Bourne wrote an inter-office memo on Feb. 7 advising the retirement counselor handling Iverson's case, "Total time served on Town Council must be purchased. Since the reason he did not contribute during the 10 years was because he was unaware that he could contribute, he must purchase all the time." Bourne said in the memo that the retirement system has taken the same position in similar cases.

The employee retirement system has notified the town that it owes $183,225 in taxpayers' money to cover those 10 years of Iverson's service at their present actuarial value. Iverson's retirement benefits were substantially enhanced after his former council colleagues hired him as the town's director of public works in 1994. Iverson earned $77,258 in the job in 2005; $76,028 in 2006, $75,042 in 2007 and $38,225 this year, according to his filing with the retirement system. He had earned about $600 a year as a council member.

Iverson applied for inclusion in the pension system when he was named highway director in 1994 and was told then he owed a little more than $1,000 to claim the council years. His bill has increased modestly over 14 years to $1,927 to buy back the 10 years he served on the council. He also is seeking to buy back three years of military service, which the system said would cost $28,000. He has not paid either bill.

The fact that he inquired about buying back the 10 council years in 1994 casts a cloud of doubt over his current contention that he was unaware of the requirements to join the state pension system when he was a council member.

In addition to his timely inquiry in 1994, it is now known that most of his colleagues applied for the same benefit, according to the documentation by the municipal employee retirement system of Iverson's inquiries then and now.

The town in 1994 was billed $1,220 to cover Iverson's council terms. The town, like Iverson, did not pay the now paltry-by-comparison bill.

The newspaper obtained a copy of a records request to the municipal employee retirement system by Richard Finnegan, a local lawyer, that sought the retirement system status of Scituate council members from 1983 to 1994, the period that Iverson was a member of the body.

Finnegan, registered as an independent, has joined Democratic Town Council candidate Richard Kells and Democratic state representative candidate Michael Marcello, himself a former council member who entered the pension system when he served, in uncovering the background to Iverson's pension maneuvers.

The former council members named in Finnegan's request are Thomas Yeaw, Robert Crowley. Earl Colvin, Charles Masso, Henry Langlais, Gerald Round, Richard O. Brown, Norma Gauthier, Judith Loven, David Ellingwood, Alvah Vernava, Margaret Long, John Marchant and Robert Dexter.

Of those 14 men and women who served with Iverson, half had knowledge about the requirements of building pension benefits and joined the municipal employee retirement system. They are Marchant, Long, Loven, Vernava, Masso, Gauthier and Dexter. The retirement system does not have records of the other members ever inquiring about the pension.

"I just don't see how he could not have known that this was available to him," Finnegan told The Valley Breeze & Observer. "When most of the people he was serving with applied, you have to think that everyone pretty much knew it was available. So, I want to know what was the 'mistake.' Mr. Iverson and the council president signed affidavits saying that he should be able to buy back the time now because he made a mistake then. Not bothering to take care of something is not a mistake."

Finnegan said he is curious why town Treasurer Theodore Przybyla submitted the same affidavit as Iverson, but then later withdrew it.

Przybyla submitted his affidavit on March 7, but followed that submission on March 24 with a fax transmittal of a request for withdrawal.

"Subsequent information has come to the attention of my office that warrants additional review and further investigation," Przybyla wrote to the employee retirement system's internal legal counsel, Gayle C. Mambro-Martin.

"Every effort will be made to expedite review of the recently uncovered documentation so that the affidavit can be resubmitted in a timely manner," Przybyla wrote. However, Przybyla has never resubmitted an affidavit.

Instead, Budway submitted an affidavit that nearly mimicked the form affidavits submitted by Iverson and Przybyla. Budway's "employer affidavit," however, was re-typed and contained a qualifying clause inserted in a key statement in the affidavit. Budway inserted the words, "Based on information presented to me," to the boiler plate language that Iverson and Przybyla had attested to.

The boiler plate language on the employee affidavit for the same statement: "The failure to be a contributing member of MERS for the time period referenced (the 10 council years) was due to the inadvertence and mistake on behalf of the Town of Scituate and myself."

Przybyla's affidavit had the added boiler plate language of "excusable neglect."

Only Budway, however, altered the official affidavit form, dated May 1, to read, "Based on the information presented to me, the failure of Richard Iverson to be a contributing member of MERS for the time period referenced ... was due to inadvertence, mistake and excusable neglect on behalf of the Town of Scituate and/or the employee, Richard Iverson."

Finnegan recalled that "Mr. Budway characterized that affidavit as a 'fill in the blank' form, but he didn't just fill in the blanks the way that Mr. Iverson and Mr. Przybyla did. He wrote his own affidavit and added that language. I wonder why?"

Budway on Tuesday, Aug. 26, acknowledged "the difference is obvious" after reviewing all three affidavits during an interview with the newspaper. "The original affidavit is not qualified."

"Neither myself nor anyone else on the Town Council had first-hand knowledge of what happened 14 years ago," Budway continued. "But based on the information that we have at this point in time we felt it was appropriate to make that statement. I did request that that language go in there."

Budway said that when the council met in executive session on April 25 to discuss the matter "we deliberated on this at great length."

Budway met with Iverson prior to the meeting, accompanied by Przybyla and Town Solicitor David D'Agostino.

"My initial reaction was: How could this have happened? Why didn't Richard Iverson take the necessary action at that time?" Budway recalled. "When I sat down with him that day I knew that five of the people who he served with had taken the pension and two had not. That is the information that I had.

"I asked him, 'Are you sitting here and telling me that five of the people you served with knew and you did not know?' And he said, 'No, I did not know.'"

Budway said that the council had the documentary information about Iverson's pension situation that has been reported subsequently.

"The council had no basis on which to decide that he should not be given credit for the time," Budway said. "Richard said he was given conflicting information at that time by the retirement board and that he thought he had handled it the way he was supposed to."

"The fact is there may be other individuals who could be in the same situation in the future," Budway said. Asked if he meant in Scituate, Budway said "Yes here and in other communities."

Although the submission of both the "employer affidavit" and the "employee affidavit" had been specified by the agency earlier in March as the final step to Iverson being able to buy back those 10 years and to begin collecting his pension payments - pending he and the town paying their bills - the Employees' Retirement System of Rhode Island balked.

The board's Executive Director, Frank J. Karpinski, wanted additional information. Karpinski wanted to know why the system should permit the buy back now when it could have been made in 1994 when Iverson first inquired about buying back the 10 years.

"In 1995 the town and Mr. Iverson were billed for this time." (The town was billed $1,220 and Iverson was billed for $1,049.) "No payments were ever made," Karpinski wrote in a May 12 letter to Budway. "Recently, 14 years after the original request, this same request was presented to ERSRI. The only differences are that now the amount due has increased significantly" and the process now includes sworn statements in the form of affidavits.

"Therefore, in an effort to make a decision regarding this request, ERSRI is seeking information relating to the long delay from the time of the original request in 1994 and the current request in 2008. Once this information is received, ERSRI will review the information and respond to the request."

Budway said the council has "put the decision in the hands of the state retirement board. The town hasn't paid a dime. The town is waiting for the retirement board's decision."