Westport Finance Director Gary Conrad may have violated New Canaan's Code of Ethics by making unilateral changes to pension benefits prior to leaving his former CFO role in New Canaan, according to an official report presented to the New Canaan Board of Selectmen Wednesday morning.
Conrad and other New Canaan officials made changes to town pensions, both for general rules and in the specific case of calculating a higher pension than the rules allowed for former New Canaan First Selectman Jeb Walker.
Garrett A. Denniston, a lawyer from an outside law firm the town hired to examine various New Canaan pension decisions, wrote in the report, "it is possible that the conduct constitutes a criminal violation such as larceny or theft.” But if the decision to grant higher payments was made by mistake, "it is equally possible there is no criminal wrongdoing," he wrote.
The report was the result of a modification to New Canaan’s pension plan that decreased the number of years required for a town official to be completely vested under the plan from five years to four. The change, which passed through New Canaan Town Council and the Board of Finance, allowed the former selectman to receive substantially more money under his pension plan as a fully vested retiree, as opposed to a partially vested retiree.
“It was discussed with the actuaries and their attorneys of how to address elected officials who may not make the full five years for vesting due to the term ending in their fourth year and that their last term in office they would not be granted any vesting rights,” Conrad said in a written statement to Westport Patch. “Making that decision to calculate the pension based on the passage of the amendment was not done with any intent to break any rules of code of conduct.”
The report that was presented to the New Canaan Board of Selectmen addressed four major issues, including whether Conrad had the authority to make changes to the pension benefits and whether the changes made violated the town's Code of Ethics.
Westport Board of Finance Chair Avi Kaner said, "I have found Gary Conrad to be highly competent and exhibiting high integrity during his tenure in Westport. We are fortunate to have someone of Gary's caliber in Westport. New Canaan's loss is our gain."
Conrad issued the following statement to Westport Patch:
"Elected Officials Pension amendment:
"The point in time that the Plan change was June 30, 2008 when the 401(h) part of the plan that required the plan to be funded at 125% of liabilities was no longer in effect due to the stock market crash. This resulted in the last point in time people with less than five years of service would vest annually. It was discussed with the actuaries and their attorneys of how to address elected officials who may not make the full five years for vesting due to the term ending in their fourth year and that their last term in office they would not be granted any vesting rights.
"The actuaries and their attorneys wrote an amendment to the Plan to be included with the new pension document that would be filed with the IRS for a determination letter approving the Plan. The actuaries were in a state of flux since the engagement with the Town was terminating. The final document did not include the amendment regarding the vesting of elected officials. The amendment was submitted to the Board of Finance (approved unanimously) and moved to the Town Council were it was initially approved but later found to have insufficient votes to pass.
"The calculation of Mr. Walker’s pension was done based on the assumption that the vesting change for elected officials would be enacted. There were open discussions over the years on this amendment. I assumed the amendment would pass and it was presumptuous to assume that. The Plan amendment should have been submitted to the Boards prior to Mr. Walker stepping down from office, but due to the change in actuaries that was not possible due to the Plan filing for a determination being delayed.
"Making that decision to calculate the pension based on the passage of the amendment was not done with any intent to break any rules of code of conduct. It was an assumption that the Boards and Council would see this as an equitable way to treat the position of CEO/First Selectman and the Second Selectman since due to their terms ending prior to five years participation in the Plan the last term in office would not count for vesting.”