Prison Medical Receiver Facing Lawsuit Over Pension Spiking Claims

J. Clark Kelso -- the federal receiver for California's prison health services -- is facing allegations of pension spiking in a lawsuit filed in Sacramento, the Sacramento Bee's "The State Worker" reports.

Background

In 2008, U.S. District Judge Thelton Henderson appointed Kelso as the federal receiver for California's prison health system (Ortiz, "The State Worker," Sacramento Bee, 4/28). The receivership was created after Henderson ruled that California's prison health care system was so poor that it violated the U.S. Constitution's ban on cruel and unusual punishment (California Healthline, 5/3/10).

As part of his employment agreement, Kelso is on the payroll of the Administrative Office of the Courts. The California Prison Healthcare Receivership Corporation -- the not-for-profit business arm of the receiver -- reimburses AOC for Kelso's salary and benefits.

Kelso already was a CalPERS member before taking the receiver job because he previously worked for the state.

Lawsuit Details

In the lawsuit, Daniel Francis -- a retired state worker and CalPERS member -- claims that Kelso's employment agreement illegally washes his federal compensation through AOC so the money can boost his CalPERS pension.

Francis said he wants the court to revoke Kelso's membership in CalPERS ("The State Worker," Sacramento Bee, 4/28).

Kelso's Response

In November 2010, Kelso said that although his employment agreement is unusual, it has been thoroughly vetted and is legal and ethical.

Nancy Kincaid, spokesperson for Kelso, said, "That hasn't changed" (Ortiz, Sacramento Bee, 4/29).

Funding for Counties

In related news, the Assembly recently passed an amendment to a budget bill (AB 94) that would allow counties pay 10% of total jail costs, down from 25% currently. Counties are preparing to house about 40,000 inmates who are expected to be transferred from state prisons.

The Senate already passed the amendment to the budget bill, which now goes to Gov. Jerry Brown (D) for approval (Hoang, AP/Ventura County Star, 4/28).

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