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Facing Possible Jail Time, Disgraced Justice Can Still Collect Pension

Estimates place former Supreme Court Justice Diane Hathaway's annual pension at nearly $100K

Former Michigan Supreme Court Justice Diane Hathaway faces a federal criminal charge and could end up in prison for up to 33 months.

Nevertheless, it appears that Hathaway can still expect to get a hefty state pension.

It's been estimated that Hathaway's annual state pension would come to $98,766. In fact, this could be a conservative estimate. It was based on calculation information posted on the Office of Retirement Services website and general information about her 20-year career in the court system.

So would Hathaway's pension eligibility change if she pleads or is found guilty?

"Only if the court ordered it," said Kurt Weiss, spokesman for the Michigan Department of Technology, Management and Budget. "There is nothing in statute that changes her ability to get her pension. If she were convicted, the court could possibly order some kind of change, but that would be unusual. However, if the court were to do that, obviously we would comply."

Last Friday, federal prosecutors filed a fraud charge against Hathaway. According to the charge, Hathaway made false statements to ING Direct, transferred property to others and failed to disclose available cash, all in an effort to fool the bank into believing she had a financial hardship. Officials said that, as a result of the alleged fraud, Hathaway managed to erase a $600,000 debt to a bank.

Hathaway's resignation from the high court became effective Jan. 21. She is scheduled to appear before U.S. District Judge John Corbett O'Meara in Ann Arbor on Jan. 29. According to court experts, Hathaway is expected to enter a guilty plea.

Michigan House Speaker Pro-Tem. John Walsh, R-Livonia, said Hathaway possibly still collecting what many consider a lavish state pension warrants review by legislators.

"I think this is an issue we should look at, and not just for her (Hathaway)," said Rep. Walsh, who chaired the House Judiciary Committee last term. "We're talking about judges and what they do while they're still on the bench. Right now, with her, these are just allegations. We shouldn't indulge in knee-jerk reactions to this particular circumstance. But there's a bigger issue here and we need to take a very serious look at it.

"This goes beyond this particular situation," Rep. Walsh said. "When any judge is convicted of criminal activity, it potentially reflects on the whole court."

Senate Judiciary Committee Chair Rick Jones, R-Grand Ledge, said the people of his district are outraged by the Hathaway situation, and he said he thinks they're justified.

“I'm very glad that Hathaway decided on a path to resigning," Rep. Jones said. "It saves us the time and trouble of impeaching her. A lot of the people I talk with are very angry about this. I was shocked about it. I think this is something that should be looked into.

"She was one of our Supreme Court justices," he said. "If the charges prove to be true, she broke the law, and it wouldn't have been just breaking the law, like a traffic charge, it would have been criminal activity. Judges shouldn't do anything that could cast doubts on their decisions. If she's guilty, what she did tarnished the integrity of the court."

Rep. Jones said he thought it was "very possible" there could be legislative hearings on the situation.

The Michigan Republican Party has called on Hathaway to give up her pension.

Hathaway filed her retirement papers with Office of Retirement Services on Dec. 20. However, she didn't announce her resignation until earlier this month, after the Judicial Tenure Commission publicly released the findings of an investigation of the allegations against her.

Assuming Hathaway enters a guilty a plea, sentencing would probably take place in three to four months. Court experts say she could be sentenced from 27 to 33 months in federal prison. Ultimately the sentence would be up to the judge’s discretion and could be as mild as home confinement. However, if that was the sentence, the judge would have to explain why he decided not to send her to prison.

Prior to the current scandal, Hathaway was probably best known in connection with ads against then Supreme Court Justice Cliff Taylor in 2008. The ads labeled Taylor as the "sleeping judge," based on a false claim that he had dozed off on the bench during a case.

Hathaway defeated Taylor in what was considered an upset.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Republican House Members Who Voted Against Right-to-Work

House Reps: 'I voted my district'

Republicans in the Michigan House widely supported giving workers the freedom to choose whether they wanted to financially support a union as a condition of employment.

But six GOP members voted against legislation (House Bill 4003 and Senate Bill 116) that made Michigan the nation's 24th right-to-work state.

On both bills, 58 Republicans voted “yes” and six Republicans joined the Democrats in voting “no.” These six were: Reps: Anthony Forlini, R-Harrison Township; Ken Goike, R-Ray Township; Ken Horn, R-Frankenmuth; Ed McBroom, R-Vulcan; Pat Somerville, R-New Boston; and Dale Zorn, R-Ida.

Five of the GOP House members who voted against right-to-work are starting a new term in the House. Horn is no longer in the Legislature due to term limits.

At times, legislative caucuses allow some members to vote against the majority position of the caucus. This can take place particularly when leadership knows ahead of time that there are already enough guaranteed “yes” votes for passage of a bill.

“Often they’ll let some members off, especially on some tough votes,” said Jud Gilbert, a Republican from Algonac who was just termed out after serving 14 years in both the House and Senate. “Typically, the situation arises when some members could be hurt politically by voting against their districts or when they have tough seats to hold onto.”

Michigan's House districts were redrawn in 2011. House members could argue that, theoretically, all the votes they made in 2012 were as representatives of their district as it was constituted in the 2010 elections. However, the partisan bases presented in this article are for the new (current) districts. It will be the constituents of these current districts that hold lawmakers accountable for votes taken in 2012 and in the future.

Right-to-work prohibits anyone from being forced to financially support a union as a condition of employment. Michigan Capitol Confidential contacted the offices of the five remaining House Republicans who voted against right-to-work and asked them to explain their reasoning.

Of the five, Rep. Goike might have taken the biggest risk by voting “no.” According to the Michigan Information and Research Services 2012 Election Guide, Rep. Goike's current 33rd House district has a 55.4 percent Republican base.

"I've got a Ronald Reagan district," Rep. Goike told The Voice, a northern Macomb County and St. Clair County publication. "We have a lot of union workers up there and they did not feel that it was something that they wanted. I am in trouble with a few people but at least they respect me because I said 'You know what? I have to vote my district and I know what this district is. I have worked in this district my whole life'.

"They know my reputation now," he said. "Once I decide on something I don't flip."

Rep. Forlini represents the 24th House District, which is located in a portion of Macomb County. It has a 50.8 percent Republican base.

"The bottom line is that I voted my district,” Rep. Forlini said. "My old district stretched all the way down to the southernmost part of Macomb County. Regarding my new (current) district, both a Republican House member and a Democrat House member, who previously represented parts of it, also voted against right-to-work — as did a Republican Senator.

"I hold meetings with my constituents twice a month," he said. "I've listened to what they've said at those meetings. Before we knew we would actually be voting on right-to-work, I stated my position on the issue at various events. I even talked about it in front of the Chamber of Commerce."

Rep. Forlini also said he would have preferred that the bills go through the regular committee process and said he believes it would have been better if the issue had been left up to the voters.

"My preference was always that this be presented to the voters as a referendum," Rep. Forlini said. "I think there would have been a lot of wisdom in letting both sides present their arguments and then let the voters decide."

Rep. McBroom represents the 108th district, which is in the Upper Peninsula. It includes the counties of Delta, Dickinson, and Menominee, and has a 50.5 Republican base.

"It really boils down to voting my district," Rep. McBroom said. "Whether I was knocking on doors or at events, the message I heard from the voters of my district was loud and clear. They don't support right-to-work. I even have businesses in my district with union shops that don't support this. They like having one entity to work with and believe that benefits them.

"I began hearing that my constituents were opposed to right-to-work as early as when I first ran in 2010 — even before I knew what right-to-work was," Rep. McBroom said. "When I researched the issue, I didn't find a strong enough reason to go against my district. This job can be a balance between your constituents' beliefs and your own opinion. But in this case, I'm comfortable with my vote."

Rep. McBroom said he opposes right-to-work, but supports union reforms.

"I support union reforms, such as allowing members to vote more often on union certification," he said. "I think there's a problem when there hasn't been a certification vote in 30 years. However, that wasn't the legislation we were presented with.

"Right-to-work is an issue on which I hope I am proven wrong," Rep. McBroom said. "I really hope it ends up doing the good things that its supporters claim it will. I'm skeptical, but I really do hope it is turns out to be something good for Michigan."

Rep. Dale Zorn represents the 56th House District, which is located in a portion of Monroe County. It has a 51.1 Republican base.

"The right-to-work issue has been, and continues to be, a very divisive issue for Monroe County and Michigan," he said. "It is true that if the economy was good, we would not be having this discussion. I appreciate those who reached out to me from industry and businesses who are concerned about workplace productivity because of employee divisions.

"I have spoken with union members, non-union members, company CEOs and citizens concerning right-to-work and have listened to the many sides of this issue," Rep. Zorn continued. "The residents of District 56 are evenly divided on whether or not Michigan should be a right-to-work state. It is my responsibility to represent the ideals of all of my constituents. Without a majority of them asking for this to pass, I could not in good conscience offer a 'yes' vote on this bill package."

Rep. Zorn said he voted in opposition of the right-to-work legislation based on concerns from both large and small companies.

"They had real concerns that it is a disruptive issue that could divide employees and cause worker morale problems that will in turn cause productivity problems," he said. "In this time of rebuilding our economy, I am afraid it may do nothing but create conflicts in our communities." 

Of the Republican House members who voted against the bills, Rep. Somerville was the only one with a current district that has a majority Democratic base He represents the 23rd House District. It is located in a portion of Wayne County and has a 52.1 Democratic base.

"We are no strangers to making tough decisions in the state House, which is partly why Michigan is starting to see some success again," he said. "When faced with such decisions, I always take into account the impact on policy, the state finances and the economy, as well as my personal beliefs and feedback from constituents. In the case of freedom-to-work laws, I personally supported much of the concept, however I heard from many constituents in my district that the issue was not a priority for them and they could not support the bills in their final form."

Ken Horn is no longer a member of the legislature. However, he is still eligible to run for state Senate. He voted “no” on right-to-work as a Representative of the old 94th District. He told reporters that when he voted “no,” he was voting his district. The new 94th House District is represented by Rep. Tim Kelly, R-Saginaw. It has a 56.2 percent Republican base.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.