|Judges who stand to benefit as result of PERS case need to let others decide|
Almost everyone would agree an elected official who has a financial stake in a case’s
outcome shouldn’t rule on it. It’s a clear conflict of interest.
Yet, in 1996, in a pivotal case on Oregon’s Public Employees Retirement System,
the Oregon Supreme Court justices, who were PERS participants, ruled on
vote-approved Measure 8, which reduced PERS benefits. The court ruled it
unconstitutional, thus killing changes that might have prevented it from
becoming the overly generous funding burden it is today.
A Bend attorney, Daniel Re, is challenging that ruling and maintains rightfully
that any PERS case should be handled by temporary, non-PERS judges. He’s now
asking the Oregon Supreme Court to require the Court of Appeals judges to
disqualify themselves in hearing his case, because they, like all judges in
Oregon, are PERS participants. He said his next step is to go to federal court.
Measure 8, which voters passed in 1994, required public employees to contribute
6 percent to their retirements and thus banned employers from making the
payment for them, as the state and many other public employers in Oregon do
today. It also would have eliminated the guaranteed minimum rate of return on
employee PERS accounts. Thirdly, employees could not figure unused sick leave
into the final average salary their pensions would be based on.
Had all these changes been implemented, it would have significantly reduced the
cost of the PERS system.
Re points out that, not only did the judges have a financial stake in the
Measure 8 case, but so did both the plaintiff, PERS members, and the state
employees defending the voter-approved initiative. All stood to gain
financially if Measure 8 lost.
The history of PERS since 1971 consistently shows those who stand to gain from
decisions making those decisions, Re said. In 1975, legislators pass a law
allowing them to join PERS and another establishing a guaranteed minimum rate
of return. In 1979, the Legislature approves the state picking up the 6 percent
PERS contribution for employees, which included the majority of the lawmakers.
It was to last only two years, but lawmakers did away with the sunset provision
In 1983, the Legislature put judges into PERS. Re notes they are the only
elected officials required to join PERS.
Then came the overturning of Measure 8 by some of those judges in 1996.
PERS is thus a system built through a series of votes taken despite obvious
conflicts of interest.
It’s not known what would happen if Re ever succeeds in getting non-PERS judges
to rule on his lawsuit. First, what the verdict itself would be. Second, how much a decision for Re would affect PERS.
One thing that is clear is Re — and taxpayers — deserve their day in court —
without judges who stand to gain from their loss.