Garcetti, council members ignored 2016 report finding waste, flaws in police and fire retirement program

Mayor Eric Garcetti and leaders of the Los Angeles City Council ignored a report urging them to eliminate, or drastically amend, a controversial program that pays veteran cops and firefighters their salaries and pensions simultaneously for up to five years.

The Deferred Retirement Option Plan, or DROP, was approved by voters in 2001 with a promise that it would keep veteran officers on the job a few years longer with no additional cost to the city.

Last month, a Times investigation found more than 1,200 DROP participants had entered the program and then taken injury leaves at twice their usual pay — some of them staying out for years with bad backs and sore knees. Last week, the newspaper reviewed a 2-year-old, confidential city document warning of serious problems with the program.

At a closed-door meeting of top elected officials in February 2016, then City Administrative Officer Miguel Santana presented a report warning the program “is not and has never been cost neutral,” as originally promised to voters.

Further, the original reason for creating the program, a feared exodus of senior Los Angeles Police Department officers to retirement or other departments after the Rampart scandal — which exposed widespread corruption within the department — was no longer a threat, the report showed.

And there had never been a reason to include firefighters in the program because the city has no problem retaining them, Santana added.

On the rare occasions when there are job openings for firefighters, the department gets far more applicants than it can possibly hire. Firefighters typically work 10 24-hour shifts a month and full-time employees of the department averaged $174,000 in total compensation in 2017, according to a Times analysis of city payroll data.

Santana’s finding that the program was not “cost neutral” could have spurred elected officials to eliminate the program or renegotiate its terms with leaders of the politically powerful police and firefighters unions, according to the city’s administrative code. Instead, they did nothing.

Following the publication of the Times investigation, Garcetti joined members of the city’s Executive Employee Relations Committee — who saw Santana’s 2016 report — in calling for a fresh study of the DROP program.

DROP “is not an entitlement,” Garcetti said in an interview Thursday. “This is something we’ll keep if it works for our city and our public safety system, not simply because it has been there in the past.”

The mayor said one reform under consideration is the suspension of pension payments to participants in the program while they are on injury leaves, an idea borrowed from San Francisco’s now-defunct DROP policy. “That’s one easy quick fix that I certainly would support,” Garcetti said.

Garcetti said he did not demand the unions come to the bargaining table after receiving the 2016 report because he feared the underlying data might have been unreliable. It included years following the recession during which employees did not get regular raises, he argued.

When employees enter DROP, they agree to accept the pension they qualify for on that date. In theory, the program benefits the city because raises those employees receive over the next five years do not increase the size of their pension payment.

The overall assessment of whether DROP is a good deal for taxpayers depends on many other factors, however, including how long the employees live in retirement and whether they actually show up for work while receiving their salary and early pension payments simultaneously.

City Council members on the EERC also questioned Santana’s findings.

Councilman Mitchell Englander said that the “methodology of the report and its conclusions were questionable.”

Councilman Paul Koretz called Santana’s presentation “half-baked” and “not that compelling.” Koretz said that he often ignored suggestions from Santana, who, he said, “wasn’t a particularly pro-labor CAO.”

Santana, who left the CAO position to run the Los Angeles County Fair Assn. last year, stood by his report, saying, “ it speaks for itself.” He declined to comment further.

Since its inception in 2002, DROP has paid out more than $1.6 billion in extra pension checks, the Times investigation found. Nearly half of the participants, who must be at least 50 to qualify, have entered the program and then taken extended injury leaves for common ailments that afflict aging bodies regardless of profession, including bad backs, sore knees and high blood pressure.

Police and firefighters in the program from July 2008 to July 2017 were nearly twice as likely as those not in DROP to miss work for injuries, illness or paid leave, The Times found. The average absence was 10 months but at least 370 missed more than a year.

A married LAPD captain and detective who collected just shy of $2 million while in DROP each filed claims for carpal tunnel syndrome and other cumulative ailments after entering the program. Both missed about two years and spent some of the time off starting a family business and vacationing at their condo in Cabo San Lucas, The Times found.

Another LAPD captain, who collected $1.5 million over five years in the program, missed nearly three of those years because of pain from a bad knee, carpal tunnel and multiple injuries he claimed he suffered after falling out of an office chair.

Every elected official who received the confidential 2016 report has received significant financial support from the Los Angeles police and firefighters unions in recent elections, a Times review of city campaign finance records shows.

Koretz received more than $98,000 for his successful March 2017 reelection, including expenses the unions incurred for mailers and telephone calls on his behalf.

“Contributions don’t influence my actions,” Koretz said.

The unions also spent roughly $65,000 supporting the March 2015 reelection campaigns of Englander and fellow EERC members Herb Wesson and Paul Krekorian, records show.

Wesson and Englander each said that only a small fraction of his direct campaign contributions came from police and fire interests. “I reject that any person or entity had influence over my position,” Englander said.

The bulk of the spending came from the firefighters union, which is known for richly supporting city officials, and whose members’ standing in DROP was most directly challenged by Santana’s report.

Garcetti had failed to win their endorsement for his election campaign in 2013. But in August 2016, the union voted to contribute to his reelection campaign, spending $44,700 on donations and print and billboard ads in his support.

Garcetti said that political contributions were “categorically not” a factor in his decision-making. “I supported firefighters when their union didn’t endorse me, and I would do it again in a heartbeat,” Garcetti said.

A representative for the firefighters union said that the organization did not target EERC members but instead has supported the campaigns of “just about every member of the L.A. City Council.”

Corina Lee, a director of the LAPD union who testified at the 2016 EERC meeting, denied that preserving DROP was a motive for her organization’s political contributions. Lee said the police union was not even aware that DROP was imperiled, and never learned of or saw a copy of Santana’s report.

“Nobody asked any questions. We made our brief statements and we left,” Lee said of her testimony at the meeting.

In an internal union magazine a few months after the meeting, in April 2016, Lee wrote that following “a lengthy discussion, EERC agreed that DROP will continue as status quo until further notice.”

City leaders had an earlier opportunity to eliminate DROP in 2008, when it was originally scheduled to expire.

There were reports at the time of officers joining the program and then going out on extended injury leaves. One council member had warned of the abuse, but the city officials had not investigated the scope and scale of the problem.

In a bid to head-off debate on altering the lucrative program, Lee and a representative from the firefighters union proposed a rule requiring everyone to be on active duty the day they entered DROP.

The “one day rule” did nothing to prevent many officers from taking long injury leaves before they entered the program, returning to work for a couple of shifts to qualify for the double-payments, and then going out again on long injury leaves, The Times found.

Times staff writer Maloy Moore contributed to this report.

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