Facing Possible Jail Time, Disgraced Justice Can Still Collect Pension

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.