Skip to comments.Vernon's nervy ex-manager suing city after defrauding it: Editorial(CA)
Posted on 07/30/2013 12:29:28 PM PDT by Mark
There's a new face of chutzpah to join that of the former Bell city manager: Bruce Malkenhorst.
Malkenhorst is a former city manager of Vernon who was paid an obscene salary of more than $900,000 a year. He is now suing that city because he doesn't think his CalPERS pension is generous enough.
His pension is $115,000, but he's not satisfied with that -- though the median household income for the Los Angeles County city of Vernon is $38,625, according to the 2010 Census.
That's because the California Public Employees Retirement System originally granted Malkenhorst a pension of $545,000 a year, after he retired in 2005. But last year the organization slashed his pension after ruling that he had derived much of his salary improperly over his 29 years working for Vernon.
So now he's suing Vernon to force his former employer to make up the difference. He claims that because Vernon paid him that ridiculous (our word, not his) salary, the city is responsible to make sure he has an similarly outsized retirement, even though CalPERS is giving him "only" a hundred grand-plus a year.
After CalPERS cut his pension in May 2012, Malkenhorst, who is 78, termed it "elder abuse." He filed two lawsuits to try to fend off the reduction, but lost both and is appealing.
It's worth noting that the year after Malkenhorst retired, L.A. County prosecutors filed corruption charges against him. They accused him of spending $60,000 in city money for personal use, including meals, massages and golf. (Hey, it's tough affording greens fees when you're only pulling down $911,000.)
Malkenhorst pleaded guilty in 2011 and got three years' probation, $35,000 in fines and penalties, and had to pay the $60,000 back to Vernon.
Clearly this man has no shame, suing the city he's been convicted of defrauding, not to mention draining its checking account into his own through years of outlandish compensation.
But then, for infamously corrupt Vernon, there can be few surprises. The city manager who followed Malkenhorst, Eric T. Fresch, was paid even more lavishly -- about $1.6 million a year in 2008. CalPERS nullified Fresch's pension entirely after determining that he was not an actual city employee but an independent contractor.
"For decades, these grifters scammed the system and today the system finally struck back," declared state Sen. Kevin De Leon, D-Los Angeles, after Malkenhorst and Fresch took the hits to their pensions. Malkenhorst's son, Bruce Jr., lost pension benefits at the same time. Speaking of no shame, could Malkenhorst Sr. possibly do any more to deliver a public-relations blow to public employees? When the sizes of public pensions in general are already under scrutiny and criticism, his selfish crusade doesn't help.
In the 2000 Census, Vernon -- which consists primarily of industrial areas -- had a population of 91. That means Malkenhorst was making about $10,000 per person in the city he "managed." Good thing Miguel Santana doesn't get paid at the same ratio to population, or L.A. would be paying its administrative officer about $38.5 billion a year. Nice work if you could get it.
If there's any justice, Malkenhorst's lawsuit will get short shrift in the courts, and he'll have to pay his own legal fees and Vernon's out of his "measly" $115,000 pension.
Are there stupider people than the taxpayers of CA on the face of the earth? They must have their brains removed at birth.
The owner of this web site is from California
California will survive many more years before it goes under, because there are still so many wealthy people who live there.
I live about 200 yards from Vernon.
Everyone who lives in Vernon has a family member that works for the city government. The residences in Vernon are owned by the city, and are only available to city workers. It has a large number of companies, to include Farmer Johns’s and S&W (canned vegetables).
The city held no contested elections from 1980 to 2006; The “Los Angeles Democrat” said city officials virtually “handpick their colleagues”: Out of the five current City Council members, four were appointed, not elected by the voters.
Very interesting! Good point. Now, Cal pers is a state pension, so do other tax payers have to help out at all?
In theory, Vernon paid into the Cal Pers pension for him.
The argument is they paid into it based on incorrect claims by him (unnecessary or fraudulent claims of overtime, and travel).
Vernon makes so much money for so few people that live there that it has been a corruption magnet for the last 20 years. Its local taxes are lower than other surrounding cities. It is full of businesses, so they can’t expand, and can’t reasonably spend the money they take in.
All that money sitting in various accounts is a powerful temptation.
glad I read to the end of your post....my blood always starts to boil before I get to the punch line
To avoid that limit, some 70% of businesses have established supplemental plans ( called SERPS) for their top employees. The key difference is that SERPS do not have the protections under ERISA, and the promised benefits aren't guaranteed, if the business fails. Also, the benefits to the employee can be attacked via litigation.
Government plans like CALPERS are different in that the employers ( various levels of government) aren't concerned about the tax deductability of their payments into the plan; however, it does show how benefits and protections accorded to government employees today far exceed that for the private sector.
CALPERS, and other government plans have no business providing benefits in excess of $300,000 for any employee..indeed the maximum should probably be $200k. That should be an immediate reform.
“CALPERS, and other government plans have no business providing benefits in excess of $300,000 for any employee..indeed the maximum should probably be $200k. That should be an immediate reform. “
I wouldn’t worry about CALPERS, it is said to be more than a half a trillion dollars underfunded at this juncture. That gravy train has square wheels going forward, and their initial claims in the municipal bankruptcies here (Stockton and San Berdo) to the effect that they “have to be paid” look to be loosing in court.