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Mary Ann Adams v. the Board of Trustees of the Teachers' Retirement

February 18, 2011

MARY ANN ADAMS,
PLAINTIFF-APPELLANT,
v.
THE BOARD OF TRUSTEES OF THE TEACHERS' RETIREMENT
SYSTEM OF THE STATE OF ILLINOIS, DEFENDANT-APPELLEE.



Appeal from Circuit Court of Sangamon County No. 09MR848 Honorable Patrick J. Londrigan, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Knecht

PRESIDING JUSTICE KNECHT delivered the judgment of the court, with opinion.

Justices Steigmann and McCullough concurred in the judgment and opinion.

OPINION

In October 2009, defendant, the Board of Trustees of the Teachers' Retirement System of the State of Illinois (Board), found monies paid to plaintiff, Mary Ann Adams, while engaged in an illegal kickback scheme did not constitute salary for pension purposes. On appeal, the circuit court of Sangamon County affirmed the Board's judgment.

Adams appeals, arguing her pension benefits should not be reduced by the amount of monies paid to her while she participated in an illegal kickback scheme. We affirm.

I. BACKGROUND

Between 1991 and 2005, Adams worked as the director of Project E.C.H.O., an alternative high school established and operated by the Franklin-Williamson Regional Office of Education. Between September 1999 and August 2004, Barry Kohl was regional superintendent of schools and Adams' supervisor. In the summer of 1999, Adams sought to expand Project E.C.H.O., providing services to a juvenile detention center to be built in Franklin County. Adams earned between $50,000 and $55,000 per year. She asked Kohl for a raise "because of the [j]uvenile [d]etention [c]enter work." According to Adams, Kohl refused.

Later, Kohl agreed to Adams' request for a pay raise, on condition she pay to Kohl one-half of the net proceeds of her pay raise on a monthly basis. Between September 15, 1999, and June 15, 2004, Adams received the salary she had previously been paid for her employment at the regional office in the form of two checks each month, together with the pay raise she requested and received from Kohl in the form of two additional checks each month. Between September 15, 1999, and June 15, 2004, Adams cashed one of the two paychecks she received as a raise and then delivered the proceeds of the cashed check to Kohl.

Between September 15, 1999, and June 15, 2004, Judy Davis was the assistant director of Project E.C.H.O. In approximately 2002 or 2003, Adams spoke with Kohl about Davis' need for additional money. Kohl responded by asking Adams to talk with Davis about an arrangement similar to the kickback arrangement with Adams. Adams spoke to Davis about Kohl's proposal and Davis agreed. Davis made monthly payments to Kohl on the thirtieth day of each month by placing the cashed proceeds of one of the two paychecks she received as a raise beneath the blotter of her desk at the Project E.C.H.O. headquarters in Johnston City, Illinois. Adams stopped making monthly kickback payments to Kohl in June 2004, when she became aware of an investigation of Kohl into the misappropriation of regional office funds.

Between September 1999 and June 2004, Adams never reported to law-enforcement personnel her payments to Kohl. Adams understood she was a public employee of the regional office and the salaried compensation she received for her public employment was funded by and with public monies. Adams claimed she was given additional duties on or before the time she asked for a pay raise. The Board had no evidence Adams did not perform additional duties for the pay raises she received in any year. Adams retired in May 2005.

In July 2008, Adams received a letter from an employer-services auditor employed by the retirement system. The letter follows, in pertinent part:

"The Illinois Teachers' Retirement System reviewed earnings reported for you[] by the Franklin-Williamson Counties ROE.

During the period 1999-00 through 2003-04, your creditable earnings reported by the Franklin-Williamson Counties ROE appear to be overstated. Mr. Barry Kohl issued you a supplemental salary contract in return for you paying half of the additional salary to him. The entire supplemental salary contract was ...


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