[CITY BEAT] Was Wharton Out of the Loop? 

The county retirement board takes back a benefits boost for Tom Jones.

There was a flurry of activity in Shelby County government last week involving Tom Jones, formerly a top aide to three county mayors, who has pleaded guilty to federal and state embezzlement charges.

The controversy over Jones' retirement benefits featured the personal intervention of Shelby County mayor A C Wharton. The mayor made a forceful and unscheduled presentation at last week's meeting of the Shelby County Retirement Board. The board then voted to rescind a previous action which had nearly doubled Jones' monthly pension based on his being reinstated to a county job for three days in May.

Wharton told the Flyer he only learned in the last two weeks that Jones had been rehired and approved for a change in his pension.

"That came as a shock to me, because my position has been and remains that when it comes to pension considerations, particularly if they would increase someone's payments, it ought to go to the retirement board, which I chair," he said.

Jones is scheduled to report to a federal correctional institution in Forrest City, Arkansas, next week to begin serving his one-year term. He was notified last week that the retirement board "has determined that an improper determination was made in the processing of your pension benefit." He can request an appeal hearing. There is no indication of any deception on his part, and the rights he invoked are available to county employees. The error appears to be on the part of current county officials.

The embarrassing episode raises questions about how successfully Wharton has implemented his policies of openness and ethics in county government, which has seen Jones, former Mayor Jim Rout, former Shelby County Commission administrator Calvin Williams, and former Juvenile Court clerk and county commissioner Shep Wilbun indicted or investigated by state and federal grand juries in the last two years. The story was first reported last week by WMC-TV Channel 5 and the Flyer on its Web site.

Jones, head of the office of public affairs, mayoral policy adviser, and a member of several public boards, was suspended in August of 2002, shortly before the end of Rout's term. He was not reappointed by Wharton. He was indicted in 2003 for misuse of county credit cards and subsequently pleaded guilty. In April, he notified the county that he planned to exercise his reinstatement rights as a former civil-service employee early in his 26-year government career. The paperwork was processed in May and June, with Wharton apparently unaware of the ramifications until two weeks ago.

The Flyer began looking into this in July. Here's a recap of events, based on public documents provided to us by Shelby County at our request, interviews, and records of the Shelby County Retirement Board:

On April 28th, Jones wrote human-resources administrator Janet Shipman that he planned to seek placement in a county government job based on his civil-service rights.

Two days later, Shipman, who is a Wharton appointee, acknowledged the request.

"I will begin the process of identifying a position for your return to employment within Shelby County government," she wrote, adding, however, "I must make you aware that due to your conviction in federal and state court, upon your return to employment, the county intends to pursue charges against you for violations of county policy while in your previous position and to suspend you ... ."

Jones was rehired on May 28th to a temporary job to which he never reported and for which he was not paid. Within days, Shipman restated the county's intention to suspend him. Based on that, Jones notified the county on June 1st that he was resigning immediately. Wharton said he did not know all this until two weeks ago.

"I had naively assumed that since he left as a mayoral appointee, it would have to come back to me," Wharton said. "It turned out that premise was erroneous because he was seeking to come back in a classified division."

The phantom job had important pension implications. Under county pension rules, age 55 is a threshold for much higher benefits. Jones was 54 when he was suspended by Rout in 2002. He was 56 when he was rehired for three days. He applied to the retirement board for early-retirement benefits effective June 1st. Waverly Seward, manager of retirement, responded to Jones in a letter:

"The Shelby County Retirement Board has approved your application for service retirement benefits effective June 1, 2004," she wrote on June 17th. "The retirement board has authorized monthly payments to you in the amount of $3,090.49." That is nearly twice the monthly benefit of $1,595.61 the county now says Jones is entitled to receive.

There is a problem with Seward's letter. Wharton checked minutes of the meeting and said the board did not "approve" or "authorize" Jones' request at its monthly meeting. The action was apparently taken administratively by Seward.

I called Seward on Friday, July 30th, and Monday, August 2nd, the day before the scheduled meeting of the retirement board. I asked if Jones was on the agenda or if he had been on the previous month's agenda. Seward said no and referred additional questions to Susan Adler Thorp, head of public affairs for Shelby County. Jones was not on the printed agenda for the meeting. Therefore, the Flyer did not attend the Tuesday, August 3rd meeting. On Tuesday, Flyer deadline day, Thorp fielded our question about Jones being rehired. She said she would have someone get back to us. Chief Administrative Officer John Fowlkes called on Thursday and talked to us on Friday. Fowlkes said Wharton did not learn about Jones' higher pension until late July.

"Jones' action of retiring after 55 did not go before the retirement board originally," said Fowlkes, a former federal prosecutor in Memphis who was picked by Wharton to be CAO. "The mayor was unaware of it. He asked me to find out what happened."

That led Wharton to decide the night before the retirement board meeting that he, Fowlkes, and attorney Susan Callison would bring up the Jones pension.

"In the mayor's view, it was not an administrative act. It was significant enough to require the board to review the facts," Fowlkes said.

Callison, an attorney with the Bogatin Law Firm, is attorney for the retirement board. She provided Wharton and Fowlkes with a four-page letter, the gist of which was that "an error was made" and the Jones case "should have been submitted to the board for a vote."

The mayor said Seward did not know until Tuesday that he was going to bring up Jones. What Seward did know -- almost two months before Wharton, the chairman of the retirement board, knew it -- was that Jones was already receiving $3,090 a month in early-retirement benefits instead of the deferred pension at age 65 the mayor says he distinctly recalls being approved by the board in September 2003.

The board then voted 7-1 to rescind the benefits package.

On August 6th, Shipman notified Jones that "an improper determination was made in the processing of your pension benefit." He will have to repay $2,989.77 in excess benefits paid to him in June and July, according to Shipman's letter.

How could Wharton have been out of the loop for so long on such a controversial matter at a time when public spending and public pensions in particular are under scrutiny? Only last week, a group of citizens moved to put city government's pension system to a public referendum in November, and MLGW pensions made news earlier this year.

In an interview Monday, Wharton, formerly the Shelby County public defender, put some of the blame on himself and some on other county officials.

"Should I have known earlier? Yes," he said. "Anybody knows it should have been brought to my attention whether I agreed with it or disagreed with it."

The mayor said he began to get the picture shortly before leaving for the Democratic National Convention in Boston on July 30th when two people he did not identify sent him "a word of thanks for helping Tom."

"I had no idea what it was about," Wharton said. He wondered if Jones had gone to another elected county official about getting rehired, "which was his prerogative."

He found out on Thursday, August 5th, that the actions had been taken administratively and, what's more, involved the retirement board which he chairs. But after meeting with Fowlkes, he said he realized he could not undo anything without taking it to the board at its meeting on August 3rd "so the board would not think something had been kept from them."

As for Seward's letter stating that the "board has approved your application," Wharton said, "This gets into a legal question. My personal view is that that is not correct."

Wharton came into the mayor's office pledging that honesty and openness would replace the culture of entitlement. Now there is a culture of suspicion instead. The suspicion is that there is a regular way of getting things done in county government and a back-door way for insiders. And the mayor himself doesn't seem to have everyone on the same page.

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