$1 Billion DROP Salary Scandal: L.A. Cops, Firefighters Allowed to Double-Dip Into City Funds, Collect Pensions 5 Years Early (VIDEO)
Ever heard of the Deferred Retirement Option Plan (DROP)? We hadn't.
But 2,808 LAPD officers and L.A. city firefighters sure had -- and a KCET public television investigation on Channel 28 tonight at 9 p.m. will make sure the rest of Los Angeles gets all the dirty details.
Reporters interview Mark Leap, a former LAPD deputy chief who signed up for DROP five years before he retired. Then, magically, on his day of departure, Leap collected a check for more than $700,000. The Weekly scored a sneak preview into L.A.'s latest Great Recession absurdity, as documented by KCET's "Show Me the Money" team:
According to the video, DROP "allows LAPD and L.A. city fire personnel who've been on the force for at least 25 years and are 50 years old to collect both a salary and their pension for their last five years on the job. And, of course, they continue to collect their pension for the rest of their lives."
The average size of a DROP check is $306,000 for cops, $328,000 for firefighters. If we multiply that average with the number of employees who have participated in the program -- 2,808 -- we find that the city has spent about $900 million on the program.
We love and support our local law-enforcement heroes as much as the next guy, but this looks downright awful for the police and fire departments. In the last couple months, the union that protects LAPD officers came out in opposition of a measure that would support painfully underfunded L.A. libraries, arguing that the "government's top obligation is public safety."
And today, the Board of Fire and Police Pension Commissioners will vote on a plan to boost retiree health benefits by 7 percent -- costing the city an extra $5 million per year. It's no wonder Mayor Antonio Villaraigosa is begging the board to reject the plan (not likely), give up a sliver of existing benefits (not likelier) and even raise the retirement age to 65 (not likeliest).
Wow. So. In light of all this, how can the DROP double-dip possibly be justified? Leap gives it his best shot:
"It allowed me to continue to promote during that time," he says in the clip. [Ed note: Uh... come again?] "It allowed me to make contributions to the department, to the city of Los Angeles, that I never would have been able to make had I retired. And it gave me a nest egg when I did retire -- really made it a win-win for myself and the city."
That's one way to look at it. (Awkwardly, Leap, speaking from the comfort of his spacious mansion, seems to think this is some happy-go-lucky "we heart cops" documentary. Not so much.)
Basically, officers are given the option of falsely retiring one day, then coming back to work the next. From the KCET report:
Now Officer Jones continues to be paid his salary. But his pension goes into an account, where it collects 5 percent interest. Jones and the city still contribute toward his pension. When Jones leaves his job, he gets those accumulated pension checks plus 5 percent interest.
And the party favors keep coming: A list of all 2,808 DROP participants, including the top 20 earners (names not included, sadly). Also, a crazy "treemap" of the L.A. city budget that singles out both city pensions in general and DROP payouts in particular. Have fun with that.
We'll be doing our best to get some top brass on the phone today for further justification, so don't forget to check back.
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