West Orange BOE Cited in Potential Pension Abuse Report

More than 200 independent contractors in the state have been improperly participating in the state’s pension and benefits system since 2008, according to a report released on Wednesday.

State Comptroller Matthew Boxer issued the findings of an investigation where 57 of 58 municipalities and school districts in New Jersey -- including the West Orange Board of Education -- failed to remove private and independent contractors from the pension system. 

The investigation found there were 202 people statewide enrolled in the pension system, and recommended to the Division of Pensions and Benefits to review and remove them. The identities of those individuals were not released by the comptroller’s office.

West Orange School Board Secretary Mark Kenney said he did not agree with the report’s findings because he believes the report is questing the employment status of  school board attorney Steven Christiano.

The school board was in communication with the comptroller’s office during its investigation into Chrisitano’s employment status in the district, said Kenney.

“[Christiano] is totally a legitimate employee of the district of West Orange,” said Kenney. “Our attorney has been on salary for 22 years. ... We do things the right way.” 

However, Kenney did not get confirmation from the comptroller’s office that Christiano was the employee cited in the report. 

Pete McAleer, a spokesman for the comptroller’s office, said the office was also unable to identify whom the report cited. 

“We are not releasing the names of the 202 until [the Division of Pensions and Benefits] has a chance to review them,” said McAller. “We stand by the report and all of the towns and school boards have had a chance to respond, and we considered that response.”

The report says, according to the Internal Revenue Service, a person’s public employment status is in question if he or she operates or is employed by a private firm. 

Christiano is currently a partner of the law firm Christiano & Christiano located in West Orange. He did not return calls for comment.

Individuals are ineligible for state pension credits and benefits if they are independent contractors or retained through the public contracting process, according to a 2007 state law. Individuals should have been taken out of the system by 2008. 

The 202 people cited as improperly accruing hours toward state pensions consisted of 176 attorneys, 21 engineers, four heath care providers, and one auditor, according to Boxer’s report. 

The immediate consequence for those individuals would be the removal of their pension credits starting in 2008, said McAller. 

Criminal charges are unlikely to be filed against those individuals if the Division of Pensions and Benefits rules against them participating in the state pension system, added McAleer.

The cost to the state is estimated to be $1.9 million per year in state-funded pension benefits for only those 202 individuals.