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Agents Raid Office in L.I.R.R. Disability Inquiry

By WALT BOGDANICH and DUFF WILSON
Published: September 23, 2008

Federal agents raided the Long Island office of the federal Railroad Retirement Board on Tuesday amid an intensifying investigation into the legitimacy of disability payments to thousands of former employees — including white-collar managers — of the Long Island Rail Road.

Uli Seit for The New York Times
Federal agents took evidence from the Railroad Retirement Board’s Long Island office on Tuesday amid questions about the legitimacy of disability awards.

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Uli Seit for The New York Times
Investigators eventually hauled off nine file boxes and five personal computers. The retirement board’s inspector general declined to comment on the raid, except to say, “We’re investigating.”

As former rail workers were arriving to file new disability claims, investigators showed up and closed the office in Westbury, eventually carting out nine file boxes and five personal computers.

The raid came two days after The New York Times reported that nearly all career employees of the railroad — from 93 percent to 97 percent of retirees every year since 2000 — retire early and soon after begin getting disability payments from the federal agency. The retirement board almost never turns down a claim, and since 2000 has paid more than a quarter of a billion dollars in disability checks to former Long Island Rail Road workers, The Times found.

Responding to the findings, Gov. David A. Paterson immediately directed the state attorney general to begin a wide-ranging inquiry into disability claims at the railroad. On Tuesday, he called on Congress to aid in that investigation.

The raid, part of a separate federal inquiry, was led by investigators for the retirement board’s inspector general, joined by agents for the F.B.I.
And after the disclosure that dozens of the railroad retirees have been enjoying free golf on state-owned courses, state parks officials have also begun a review of who gets an Access Pass, which gives the disabled free use of sports facilities in state parks.

Martin J. Dickman, the retirement board’s inspector general in Chicago, declined to comment on the raid, except to say, “We’re investigating.”
The retirement board is run by three presidential appointees, one representing labor, one representing management and one representing consumers.

L.I.R.R. workers file for occupational disability benefits after they retire and can get them if they are unable to perform their regular railroad jobs — even though they might be capable of doing other work. Under retirement board rules, rail employees can pick the doctors who conduct their medical evaluations.

“I understand the outrage that has ensued,” Jerome F. Kever, the management member of the railroad board, said in a statement released on Tuesday. “The occupational disability program that exists today under the Railroad Retirement Act too easily permits medical conditions normally associated with aging to be adjudicated as occupationally disabling.”

In his statement, Mr. Kever recommended that the board’s policies be changed so that it could solicit medical information about applicants from railroad companies. He also recommended that disabled workers be required to undergo rehabilitation and be subject to mandatory medical reviews once a disability status is granted.

Helena E. Williams, the L.I.R.R. president, said on Tuesday that the board “clearly needs to tighten its rules,” but added, “Another key issue is whether the L.I.R.R. belongs in the Railroad Retirement Board system at all.”

Ms. Williams said she believed that the Metropolitan Transportation Authority, the L.I.R.R.’s parent agency, would save millions if the railroad were part of the Social Security system instead, because per capita taxes would be lower.

On Tuesday, Michael S. Schwartz, the retirement board’s chairman, released a memorandum dated in August in which he asked the inspector general to “take whatever steps are necessary” to identify any possible problems with disability claims for L.I.R.R. employees. He said his release of the memo showed his early concern about the matter — a concern that arose after he was interviewed by The Times in July.

Former employees of the Long Island Rail Road file for disability benefits at a rate three to four times that of the average railroad, records show.

Unlike workers at most other railroads, they can often retire on a regular pension as early as age 50, allowing them to supplement that pension with tens of thousands of dollars in annual disability payments.

Steven A. Bartholow, general counsel for the retirement board, said it was wrong for The Times to have suggested that the L.I.R.R. retirees receive “very generous benefits.”

Mr. Bartholow said retired rail workers nationwide get on average $26,400 annually in disability payments from the retirement board. In 2005, records show, L.I.R.R. retirees got significantly more — about $36,000 a year — because their disability payments are based in part on their higher wages.

The retirement board declined to provide a more current figure.

Andrew W. Lehren and Nicholas Phillips contributed reporting.

http://www.nytimes.com/2008/09/24/ny...on&oref=slogin

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