CalPERS’ Scandal-Ridden Fiduciary Counsel Ducks Jacksonville Subpoena; City Files Suit Alleging Illegal Creation of Gold-Plated Pension Fund

CalPERS’ recommendation to its board of the tainted pension fund attorney, Robert Klausner, who may be the only lawyer in the US in the business of providing “pay to play” conferences to public pension fund trustees and employees dressed up as education, is looking more and more problematic as a scandal in Jacksonville, Florida, heats up.

This past Friday, Klausner, through his criminal defense attorney, Henry “Hank” Coxe, ducked a subpoena and a request for appearance to be examined under oath. The subpoena came out of a request for documents by the city of Jacksonville that had been outstanding since June. One type of information sought involved payments Klausner, his firm and any affiliates received on class action litigation. Another focus was on compensation received by Klausner for Klausner’s long standing “educational” conferences, which he operates on a “pay to play” model.

The demand was originally made to the Jacksonville Police & Fire Pension Fund. It claimed it did not have these records, so the inquiry was directed to Klaunser, both as general counsel to the fund and the creator of some of the supposedly missing records. This request should have been uncontroversial, since Klausner had said in writing that he was disclosing all his fee arrangements and actual fees received on class action suits to this pension fund, and separately, under bar rules, he was required to provide them. The arrangements related to the “pay to play” conferences again subject to disclosure to his client as a conflict of interest under ERISA rules (the Jacksonville Police & Fire Pension Fund has adopted ERISA in full to govern the operation of its fund).

As one attorney put it (emphasis original):

These subpoenas are a very big deal. Undisclosed fee-sharing agreements not consented-to by the client are a no-no that might lead to disciplinary action by the Florida State Bar (although State Bar disciplinary action is rarely directed at the “connected” in our wonderfully self-regulated profession).

To put it another way, Klausner would not have hired a big ticket criminal defense attorney to handle a request for documents he should have on hand unless he thought he was exposed.

And as we’ll discuss, the way that Klausner and his attorney blew off the subpoena was, as another attorney put it, a “fuck you” to the City of Jacksonville. No records were turned over, and the few bits of information provided were incomplete and look to be deliberately misleading.

We’ve embedded the most important documents at the end of this post: the 1999 Klausner opinion that served as the pretext for creating a so-called Senior Staff pension fund (it’s included at the end of a May 29, 2015 letter to the Board of Trustees), a 2004 letter from Klausner to the pension fund in which he made specific representations regarding his fee arrangements with class action firms, the letter from Klausner’s attorney las week which essentially blows off the subpoena (more on that soon), and the suit filed by Jacksonville against the Jacksonville Police & Fire Pension Fund’s Board of Trustees and its former administrator, John Keane, after Klausner and the fund failed to meet the original deadline for responding to the subpoena, which was November 16.

Our post benefitted substantially from the extensive reporting done over the years by the Florida Times-Union on the Jacksonville scandal, and in particular, the generous assistance of reporter Eileen Kelley in helping us become familiar with it.

Background on the Jacksonville Police & Fire Pension Fund and its Secret, Allegedly Illegal, Gold-Plated “Senior Staff” Fund Created by Klausner

The Jacksonville Police & Fire Pension Fund (“PFPF”) is the prototypical Klausner client: small and unsophisticated. Klausner has been the PFPF’s general counsel since 1987.

Unbeknownst to Jacksonville city officials at the time, Klausner wrote an opinion in 1999 that served as the justification for the pension fund setting up in 2000 what the city of Jacksonville has said repeatedly, was an illegal “Senior Staff” pension fund for the “fund administrator,” meaning top official, John Keane, and two other fund trustees.*

PFPF’s Executive Director (also called the “fund administrator”) John Keane and his fellow trustees kept the very existence of the Senior Staff pension fund secret from the city from the 1999/2000 through the 2011/2012 fiscal years, omitting it from both the operating budgets submitted to the city annually as well as its comprehensive annual financial reports.

To be clear, Keane is a career fireman with no investment experience; the basis for him getting such a lavish pension (over $300,000 a year, with over $228,000 from the Senior Staff plan and over $67,000 from his regular pension**, with a present value in excess of $2 million) on top of a lavish salary (over $200,000 a year) for running a penny-ante pension fund appears to be that he is the local firemen’s union boss. Keane’s pension is so rich that the expected annual payment is over $41,000 in excess of what the IRS deems permissible for a pension payment.

So what did the PFPF Board of Trustees do? Authorize an “excess benefits” payment which comes out of the pension fund’s operating budget…even though it lacked the authority to do so (the expenditure had to be approved by the city, and that never took place).

And if all that isn’t enough, it appears that the pension payments that Keane has been receiving are illegal because he never actually retired. He rolled over from being the administrator of the PFPF and Senior Staff fund to being a consultant to both of them for $130 an hour ($250,000 a year, assuming 40 billed hours a week for 48 weeks a year) for performing largely the same duties.

Jacksonville demanded that the Senior Staff fund be unwound when the city learned about it in 2012, since it had not been approved by the city as required by Florida statute and the city in establishing the pension fund has expressly stipulated that changes to the plan required approval by the city council. This was after the PFPF had been singled out in 2008 by Florida TaxWatch as being severely underfunded and mismanaged.

Instead, the pension fund defied the city and made a special payment to the Senior Staff fund, effectively looting the regular pension fund to the benefit of the fund for the cronies in charge, putting the Senior Staff fund in overfunded status, when the regular pension fund is so severely underfunded that it is in the bottom 1%. It’s not clear, save perhaps at other Klausner-supervised pension funds, whether there is any precedent for a Senior Staff fund to be carved out of the assets of an extant pension plan and given funding priority relative to it. From an article by Eileen Kelley in the Florida Time-Union:

Keane’s type of pension is called a SERP (Special Executive Retirement Plan). But unlike most SERPs, which are designed to be incentives for high-achieving executives to work harder and stay longer, this one was pre-funded.

“It’s rare and aggressive to have a pre-funded SERP,” said Jonathan Trichter, a pension expert and principal at MAEVA Municipal Solutions, who was part of a city Pension Reform Task Force assembled last summer. “And I’ve never seen it in the public sector.”

The city first tried getting Governor Rick Scott and attorney general Pam Bondi to take up the matter. Since Florida was ground zero for foreclosure mills, and Bondi fired staff and made spurious allegations against activists who were pursuing foreclosure fraud when their research proved to be correct, it was never likely that the state would investigate an attorney, even one alleged repeatedly in the press as having engaged in self-dealing and failing to obtain prior approval of his class action compensation arrangements. The latter is potentially a criminal offense, and appears to be the reason why Klausner has hired a big-ticket criminal attorney, Hank Coxe, to represent him.

Before you wonder if this dispute is just a big “he said, she said,” we’ve reviewed the underlying documents with independent experts, both attorneys and pension fund trustees. The reaction of one attorney who has considerable criminal litigation experience:

This sort of “opinion letter” [justifying the creation of the Senior Staff fund] has no legal effect except to make ignorant Board members comfortable doing patently illegal things. There is no good reason to for them compensate an employee so generously. Ironically, the Attorney General Opinion from the mid-90’s doesn’t really say much at all – and it’s the only colorable “authority” relied upon by Klausner. It can be read to support the opposite conclusion as well – that employees of the Jacksonville Police & Fire Pension Fund are employees of the City covered by their plan.

Both the lawyers and the former pension trustee were of the view that the city of Jacksonville suit was strong.

And bear in mind that the subpoena and suit seek to get information about additional improprieties that have been exposed via the dogged reporting of the Florida Times-Union, which among other things, sued the city and the pension fund to obtain information about settlement talks which had not been properly noticed under Florida’s Public Records Act. Citizen activist Curtis Lee has also unearthed important information about dubious conduct by the PFPF and Klausner. He won a separate Public Records Act suit at trial court and appeals after the then Chairman of the Board of Trustees Bobby Deal threatened Lee and tried charging impermissible fees for Lee to gain access to records. Lee conservatively estimates that the pension fund has spent at least $365,000 as of early 2015 on its own legal fees and costs fighting him, all of which come out of fund assets.

Note the final cost of this case, which also comes out of pension fund assets, has yet to reached. The pension fund is appealing the appeals court award of Lee’s attorney’s fees and costs, which are roughly $75,000. It’s hard to view the appeal as anything other than punitive, as well as yet more looting of the pension fund, since the cost of the appeal to the Florida Supreme Court will clearly exceed the cost of writing a $75,000 check to Lee*** Oh, and who represented the fund in this litigation over the fund’s plan to charge Lee an impermissible $300 to get records? Klausner’s firm, natch.

But the biggest potential risk to Klausner lies in the 2004 letter that he sent to the PFPF, claiming that he only took 5% to 10% of class action fees, always obtained prior approval of the Board for all settlement decisions, and always reported “the final percentage and dollar amount”. According to the Jacksonville ethics director, Carla Miller, the administrator of the PFPF and the Senior Staff fund, John Keane, said that he never received any reports or records from Klausner regarding his fees from class settlement awards. As Miller pointed out, what Klausner and Keane have said cannot both be true. Also note that Keane does not appear to have anything to gain by withholding Klausner’s reports of payments.

Now one might think that Keane might be trying to protect Klausner, since if Klausner had received more than he had told the fund that he would take in class action settlements, that a misstatement would constitute a bar violation so serious as to have the potential to lead to disbarment. It would also be fraud, and arguably, criminal fraud. In other words, this is the issue where Klausner apparently feels exposed enough to have hired a pricey criminal defense attorney.

But pretending there were no records would not help Klausner, since not obtaining client approval in a class action settlement and failing to report the amounts received is also a bar violation and could similarly subject Klausner to prosecution. That means if he did not adhere to the policies he set forth in his 2004 letter, Klausner is going to be in very hot water.

And apart from the matter of whether Klausner disclosed his billing arrangements properly, legal authorities have said they see this sort of arrangement as inappropriate for a fiduciary. From Edward Sidlle’s report to the city of Jacksonville:

Some have severely criticized these “portfolio monitoring” arrangements between pensions and class action firms. One highly regarded federal judge, Judge Rakoff, noted in 2009, that such an
arrangement was “about as obvious an instance of conflict of interest as I’ve ever encountered in my life.” He said he was shocked that persons with a fiduciary duty to monitor pension investments would choose “to save a few bucks” by hiring a law firm to monitor those investments that could only profit by recommending litigation.

The fact that the city Of Jacksonville filed suit, admittedly on a related matter, means that this issue is not going away any time soon.

Mind you, that’s far from the end of alleged abuses at the Jacksonville fund alone. We discussed in our original post on Klausner how he runs pay to play “educational” conferences for his clients, where the fund trustees and staff that attend for free are the product being sold. Fund consultants and law firms pay $30,000 and up to present at Klausner’s annual conference. This arrangement represents a conflict of interest, since one would expect if anything adverse selection among advisors that felt they needed to pay in order to build credibility with and gain access to prospective clients.

As former Kentucky Retirement System trustee Chris Tobe said via e-mail:

There is no other attorney except Klausner who charges money managers for access to his client trustees at a conference. The only other fiduciary still engaged in this conflicted practice is an investment consultant Callan at their Callan College.

As a Kentucky trustee I was expected to attend the Klausner conference for 100% of my fiduciary training. After reading the Forbes and New York Times articles [in 2004] on the conflicted nature of these conferences, I refused, and staff reluctantly allowed me (the first and only) to attend the Program for Advanced Trustee Studies at the Harvard Law School and Fiduciary College for Public Pension Trustees at Stanford Law School.

Edward Siedle, who was hired by Jacksonville to conduct a forensic audit on the PFPF and the Senior Staff fund, raised doubts about the value of these conferences, particularly since the Jacksonville Ethics Officer Carla Miller has looked into complaints about wasteful travel by the PFPF board members to confernces. She concluded that there was a lack of oversight and called for further investigation. As Siedle’s report stated:

In our opinion, the likelihood that public pension board members and staff who lack investment experience will learn anything meaningful regarding pension investing through travel to exotic locations is remote.

Further, the risks related to such high-stakes marketing junkets are substantial and, in our opinion, far outweigh any educational benefit. The potential for corruption of the investment decision-making process at pensions, resulting in higher fees and lower performance, is obvious and enormous.

Klausner has created a major conflict of interest by running a side business that uses his fiduciary relationships to earn significant amounts of income from another set of customers. That appears to be inconsistent with his duty of loyalty to his fiduciary relationships. The fact that Klausner is the apparently only attorney who thinks this sort of arrangement is kosher raises serious doubts about his sense of propriety and how he prioritizes his own profits versus his professional duties.

We’ll now turn to an in-depth discussion of his attorney Hank Coxe’s letter to the Jacksonville city council as an illustration of his and Klausner’s respect for the law.

What the Hank Coxe Letter Says About Klausner

Normally, one hesitates to read too much into documents prepared by lawyers in contested matters, since normally the client defers to counsel. But here the client, Klausner, is an attorney, and has considerable knowledge in the underlying subject matter, while his counsel does not. And most important, Klausner himself is a successful litigator, having argued and won an important case before the Supreme Court. It is thus inconceivable that he would not be actively involved in the strategy for how to respond to the Jacksonville subpoena, and would presumably have reviewed the letter carefully.

The letter gives a “dog ate my homework” level excuse for not providing documents and making an appearance. If Jacksonville officials were not already seeing red over Klausner’s intransigence, this letter is enough to put them in a justified rage. Remember the timetable: Jacksonville sought the records in question in June. They first asked the PFPF, and then Klaunser when the PFPF administrator Keane said he had no such records, since Klaunsner had produced them and separately should have them in his capacity as general counsel to both funds, the PFPF and the Senior Staff fund. Remember that Klausner was not being asked to create any new documents or provide new information.

After the weeks of delay, the PFPF provided only a few records, and Klausner, none. The city then issued subpoenas to the PFPF and Klausner, an act they’ve very rarely taken, requesting not just the records but also an appearance to answer questions under oath. And even with a very long lead time for the subpoena, at the 11th hour, the PFPF Hank Coxe requested a continuation. Coxe, in a show of bad faith, did not inform the city until late last week of his pending knee implant surgery, which conveniently conflicts with the rescheduled hearing date.****

So the strategy appears to be to try to wear the city of Jacksonville down and hope that the local press loses interest. Given that the Florida Times Union has assigned Eieen Kelley full time to this story, this is likely to be a failed bet.

The responses on the class action fees are incomplete, potentially misleading, and are still damning as far as Klausner’s status as a fiduciary is concerned. If you read the Coxe letter, it pretends to answer a request for records by providing information. However, given that a key issue is whether the PFPF was informed as to the fee arrangements between Klausner and class action firm, and whether the PFPF gave approval of the awards, as required by bar rules and as Klausner maintained was his established practice as of 2004, the continued refusal to provide records strongly suggests that Klaunser was violating the law and making misrepresentations to fund trustees.

Moreover, the information that Coxe does provide is troubling.

The information is obviously incomplete. Coxe provides information about what Klaunser’s firm received for four class action cases. There is at least one missing: Board of Trustees of Lake Worth Retirement System v. Merrill Lynch. The court filing for the final approval of the settlement clearly lists Robert D. Klausner and Adam P. Levinson of Klausnser, Kaufman, Jensen & Levinson as “Co-Lead Counsel for Plaintiffs.”

Also keep in mind that Coxe has discussed four of five cases in which Klausner was co-lead counsel. Former Kentucky Retirement System trustee Chris Tobe points out that the PFPF may have been a party in as many as 50 other in other class action suits, but not as co-lead plaintiff.

The information is potentially misleading. For each of the four class action cases listed, the Coxe letter sets forth what “the Klausner firm” received.

However, if you look at the 2004 letter to “Dear Trustees” (note the irregular lack of an address or other identifiers for the recipients, meaning this was probably a form letter sent to all Klausner pension fund clients), you will see it is not on letterhead, has no firm address or firm name, and is signed “Bob Klausner,” meaning by Klausner personally and not as a partner of his law firm. The letter also uses “I” and not the firm “we” to refer to his compensation arrangements on class action suits. For instance: “I usually receive between 5 and 10% of the approved fee.”

This distinction matters. An attorney confirmed our suspicion that Klausner could have received compensation individually, as opposed to through “the Klausner firm”:

Founding partners as often as not work on their own account, subsequently sharing revenues with the firm under the terms of the partnership agreement.” He also thought that the reason for making disclosures regarding the firm was, “He may also be hoping to insulate the firm from the suit.

Even this limited disclosure raises serious doubts about Klaunser’s loyalties as a fiduciary. On these four cases alone, “the Klausner firm” made over $3 million, which is more than Klausner earned acting as fiduciary counsel ($2.7 million, according to Siedle’s report) over the 28 year life of his relationship with the PFPF. Moreover, in class action settlements, Klausner typically receives $650 or more an hour, versus the $385 ($400 in the case of CalPERS) he typically charges to pension fund clients (Update: In Jacksonville, a very long-lived relationship. Eileen Kelley of the Florida Times-Union has told us via e-mail that Klausner’s rate is $285 an hour). That alone would seem to pose a problem in terms of meeting the “duty of loyalty” standard for a fund fiduciary. Moreover, it raises the question of whether Klausner has been perpetrating a fraud on the court in his class action settlements, since the attorneys aver to the court that the billing rates they use in these cases are their ordinary and customary rates. Yet Klausner clearly charges his bread and butter business at a lower rate in order to earn much more on activities he presents as ancillary to his fiduciary counsel clients.

The response on the request for information about Klausner’s “educational” conferences is an insult to intelligence, as well as a potential violation of fiduciary duty. Coxe refuses to disclose what Klausner receives in the way of “pay to play” fees by asserting that it is “confidential, proprietary, and trade secret information” since he competes with other pay to play conference organizers. This is simply ludicrous, since Klausner is apparently the only attorney providing these conferences, and his participants come overwhelmingly if not entirely, from his client base (as in his sourcing of attendees is not “competitive”). Moreover, other sponsors of “pay to play” conferences, like ILPA, disclose what they charge presenters, illustrating that the payment scheme is not valuable commercial information. Clearly, just like the private equity firms who try claiming “trade secret” for documents and information that are obviously not competitively sensitive, Klausner is trying to protect himself from embarrassment.

Implications for CalPERS

It is hard to see how CalPERS can justify using an attorney in the sensitive role of fiduciary counsel see this post for more detail) with such a glaring record of casualness about conflicts of interest who now, by his choice of a costly criminal defense attorney, sees himself as a possible target of prosecution. As one attorney who has been around the pension world said, “CalPERS was really scraping the bottom of the barrel when they chose him. This is a sign of how far CalPERS has fallen in recent years.”

Keep in mind that it is unlikely that CalPERS’ staff recommended Klausner to the board over other qualified candidates in order to have Klausner pump for a lavish “senior staff” fund as he often does for fire and police pension funds. It’s far more likely that, as was reported when Klausner briefly had the San Diego pension fund as client, that he was selected to be a Trojan horse for the board by advocating whatever staff wanted to do to the board and finding arguments, however strained, for depicting those recommendations as fiduciary requirements. Tomorrow, we’ll do a long-form shredding of Klausner doing just that in acting as a hatchet man against the one board member willing to ask basic questions about private equity, JJ Jelincic.


* The lawsuit does not say that the plan is inherently illegal, but that it is illegally implemented by not having been approved by the city or established by the state legislature, as required, and by allowing in-service distributions, excessively large pensions, and trustees who are also city pension plan trustees.

** The numbers do not tie exactly because they come from different sources. The City of Jacksonville has put the expected payments of Keen’s pensions at $303,000 per annum, and their court filing is the most recent information; the breakdown between the regular pension fund and the Senior Staff fund comes from older media reports and Edward Siedle’s investigation.

*** From an 11/17/15 document prepared by Curtis Lee:

Also, after Mr. Klausner on 5/13/14 promised W. Bussells, then chair of the PFPF BOT, that KKJL would not bill for taking the appeal of the $75,000 fee award to the FL Supreme Court, KKJL billed more than $75,000 to the PFPF on this matter, which the PFPF paid. Plus, Klausner promised to reduce KKJL invoicing by $25,000 via email dated 5/13/14 – I see no evidence this was ever done.

**** Readers might wonder why one of Coxe’s 13 named partners could not handle this hearing. It is apparently not done in criminal or potentially criminal matters to have a partner pinch hit for the attorney handling the matter.

1999 and 2012 Fund opinions

2004 letter

Coxe November letter


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  1. cnchal

    About that Jacksonville Police & Fire Pension Fund.

    If one were to imagine that every investment and transaction the fund did performed to perfection and went the pension fund’s way, and that the fund manager was lily white and had the funds performance as his highest goal, and that the roughly $500 to $600 million in under performance as documented in Siedle’s report hadn’t happened, there is still a wee problem.

    It would still be underfunded by over a billion dollars.

    1. Yves Smith Post author

      The Jacksonville situation is a monster hairball, but the short version is the city entered into a 30-year agreement with the fund in 2001 (peak of the dot com era!) which is allegedly illegal by virtue of being a deal with a union. It’s considered to be collective bargaining, and in Florida, collective bargaining agreements cannot be longer than three years’ duration. In addition, the 2001 deal supposedly has an escape clause that the city, perversely, has failed to invoke.

      More detail here:–jacksonville-pension-crisis–

  2. John Zelnicker

    Yves – I’m confused about some of the class action issues and would appreciate your assistance in understanding them.

    First, who are the class action plaintiffs (pension funds?) that Klausner is representing and who are the defendants, generally speaking?

    Does he do any work as a class action litigator, or is he being paid for supplying (representing) plaintiffs for the class (within the legal action, not the conferences)?

    Attorneys often charge in the range of 30% or more of the final award of damages. When Klausner says he takes a 5-10% cut of the fees, does that refer to the amount awarded to the attorneys or to the entire damages awarded? In other words, does he get, say, 10% of the 30% paid to the attorneys, so about 3% of total damages awarded, or does he get 10% of the total, so about a third of the total attorneys’ fees?

    Thank you for taking the time to help me with this. Your work on pensions and private equity is masterful.

    1. Yves Smith Post author

      This 2004 story in Forbes, which led Klausner to issue the 2004 letter that appears to be the source of his big legal risk, gives some background. The media has reported repeatedly on Klausner’s tight relationship with Bernstein Litowitz, which is a focus of that story, and sources tell me that Bernstein Litowitz is believed to have paid $100,000 to be the exclusive class action law firm presenting at Klausner’s pension fund conferences:

      Klausners is basically getting referral fees for sending clients like the Jacksonville PFPF to big class action firms like Bernstein Litowitz. From Edward Siedle’s report:

      It is our understanding that the General Counsel:

       Recommends class action law firms to monitor the Fund’s investments and pursue litigation related to portfolio securities;
       Advises the Fund when to initiate or participate in a given lawsuit;
       Negotiates (on behalf of the Fund) fees paid to these law firms;
       Enters into fee-splitting arrangements with the firms he recommends for class action litigations whereby his firm receives a portion of the fees related to these cases.

      Florida Rules of Professional Conduct applicable to lawyers effectively provide that a division of fees between lawyers who are not in the same firm may only be made pursuant to an agreement that fully discloses that a division of fees will be made and the basis upon which the division of fees will be made.

      Any potential violations of such rules regarding full disclosure of fees, including any misrepresentation of fee arrangements by a lawyer should be reported to the appropriate authorities. An apparently isolated violation may indicate a pattern of misconduct that only a disciplinary investigation can uncover and reporting a violation is especially important where the victim is unlikely to discover the offense, according to the Florida Bar.

      We note with great emphasis that even if any such fee-splitting arrangements among law firms may be permissible under certain conditions prescribed by laws generally applicable to Florida licensed
      lawyers, whether the General Counsel, as an ERISA fiduciary to the Fund, may receive such fees and whether the class action firms retained by the Fund, as ERISA fiduciaries, may pay such fees to the General Counsel in connection with Fund litigation is an entirely separate matter. Any such dealings may amount to “prohibited transactions” under ERISA fiduciary standards and give rise to personal liability.

      In general, full disclosure of the potential conflict of interest and amount of any compensation related to a transaction that could be considered fiduciary “self-dealing” under ERISA would be required, at a minimum

      And from Siedle’s executive summary:

      The Fund Administrator repeatedly claimed to have no documents disclosing the dollar amount of fees the General Counsel actually earned in connection with specific class action litigations the General Counsel recommended the Fund initiate against publicly traded companies— despite the fact that the General Counsel himself stated in a letter to the Board that the final percentage, amounts and names of firms receiving such fees are always reported to the Board.

      Hope that helps.

      1. John Zelnicker

        Yes, indeed, that is very helpful, thank you.

        It seems that the deeper one gets into the details, the worse the situation appears. Not only are there issues of unethical, perhaps illegal, behavior in regard to the pay-to-play conferences Klausner sponsors, there are, apparently, some serious violations of ERISA rules against self-dealing and prohibited transactions.

  3. BEast

    Perhaps this is thinking too big for a small-time (or perhaps medium-time) so-and-so like Klausner, but I can’t help but thinking that carving out premium pensions for the top ranks — or even just the top rank of the pension board — would be a great way to destroy support for public employee pensions even among public employees.

    (Typo watch: paragraph 1: “Klaunser”; later, “Florida statue”.)

  4. Ishmael

    Oh look it is a corrupt union official. Never heard of such a thing. NOT

    At one time I had dealings with the Las Vegas Teamster health funds. They were so corrupt they ended up being ran by the Department of Justice.

    Big surprise here!

  5. R.E. Searcher

    Of possible interest- a Alaska Supreme Court decision which mentions a Robert Klausner.

    Supreme Court of Alaska.
    ANCHORAGE POLICE & FIRE RETIREMENT SYSTEM, Appellant, v. Jack GALLION, Michael Crotty, John Young, Carroll Grant, Anthony Provost, Douglas K. Bohac, and Anchorage Police and Fire Retirees Association, Appellees.
    No. S-9880.
    Decided: March 14, 2003


    The superior court held the Board of Trustees of the

    Anchorage Police & Fire Retirement System in indirect criminal

    contempt for violating a court order that approved a class action

    settlement. Indirect criminal contempt requires finding beyond a

    reasonable doubt that the respondent violated an order willfully.

    Because the superior court found that the system willfully

    violated the court’s order, because we conclude that the evidence

    supports that finding and that the order was unambiguous, and

    because we also conclude that there is no indication the superior

    court applied the wrong standard of proof, we affirm.


    In particular (but certainly not to the exclusion of the other facts and proceedings in the decision):

    On June 21 class counsel moved for an order to show cause and for Rule 95 penalties;  the motion asked court to sanction the board or its attorneys under Alaska Civil Rule 90(b) or Alaska Civil Rule 95.   Following briefing, the court ordered the system and its counsel to appear and show cause why they should not be sanctioned “for violating the court’s order concerning the timing of notification of the class members of the attorney fee dispute resolution.”

    After conducting an evidentiary hearing, the superior court found that “the distributions were made before the June 8th notice [enclosing the transcript] was sent.”  “[D]istributions were to the attorneys, the Municipality and 149 of the members․ I do find that that is contrary to the specific and unambiguous language of the April 6th order, so the system did violate that order, and in doing so defeated the purpose of that clause of the order.”   The court then held the system in contempt and announced an intention to fine it $100.10  Counsel for the system argued that contempt required a willful violation of the order and that the evidence demonstrated that Charles Laird, who had acted for the board, “did not intentionally defy the court’s order” and had an honest and good faith belief as to what he was required to do.   The court nonetheless held the system in contempt.   We discuss the court’s comments in Part III.B of this opinion.

    The court also found the system’s attorney, Robert Klausner, in contempt and assessed, but suspended, a “nominal penalty” of $10 against him.

    The APFRS appeals from the order holding the system in contempt.   Klausner has not appealed.

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