THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

A cunning scheme, a spark of conscience

Middlesex County Sheriff James DiPaola had hit the daily double — a sly but legal way to collect his state pension and salary all at once. Then, after a dark and sleepless night, he decided to just say no.

Sheriff James V. DiPaola said he will resign in January. Sheriff James V. DiPaola said he will resign in January. (George Rizer/Globe Staff/File 2006)
By Andrea Estes and Sean P. Murphy
Globe Staff / November 21, 2010

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Middlesex County Sheriff James V. DiPaola had it all lined up. He was going to take advantage of a loophole in state law allowing him to collect a $98,500 annual pension on top of his sheriff’s salary of $123,000, starting next year.

But after a sleepless Friday night, he succumbed to second thoughts.

“I think I made a mistake,’’ he said in an early-morning phone call to a Globe reporter yesterday.

Instead of taking his pension and keeping his job, the longtime sheriff said he has decided to resign in January, just weeks after easily winning reelection on Nov. 2. Governor Deval Patrick will name his successor.

Until the Globe began asking about his retirement deal on Friday, DiPaola had a much different plan.

DiPaola, a 57-year-old Democrat, had quietly filed retirement papers on Oct. 28, looking to exploit a section of the state pension law that allows retirees to run for paid elective office without losing their pensions. All he had to do was not accept a paycheck until his new term began in January.

That gambit, which even his own employees seemed unaware of, would have increased his annual income by $98,500 for doing the same job he’s been doing since 1997.

“I’d always be remembered for this, for double-dipping, that that would be my legacy,’’ he said yesterday, crediting a Globe reporter’s question for his spark of conscience. “From a financial perspective it was great. It was legal. But I tossed and turned all night. I did put myself first this time, and I don’t want it to end that way.’’

He continued, “I asked myself, ‘Is this really worth it?’ ’’

DiPaola, who is giving up six years’ salary worth $738,000, concluded it was not.

“This is black and white, and there is no cagey way to get around it,’’ he said. “I had a feeling in my stomach.’’

Just a day earlier, he had defended his decision, saying, “There is nothing evil about it. I don’t see it as grabbing something. I’m supposed to say no to it?’’

DiPaola’s stealth retirement was precisely the kind of maneuver that prompted the governor and Legislature to toughen pension rules last year after a series of Globe stories detailed the ways many public officials had taken advantage of obscure rules and loopholes to enhance their retirement benefits.

But lawmakers apparently never contemplated a scheme like DiPaola’s; he might have been first to pull it off.

On Friday, when contacted by the Globe, Patrick said he would try to prevent DiPaola from collecting the additional money.

“This is absolutely outrageous,’’ the governor said.

Yesterday, Patrick issued a statement praising DiPaola for the change of heart and his “wise decision to resign.’’

“The sheriff did the right thing,’’ Patrick said. “He is a fine man and has done a fine job in office, but this kind of double-dipping is exactly the kind of thing that discredits government.’’

The governor added that the next bill he files to further tighten pension laws would include a prohibition on DiPaola’s maneuver. According to state retirement officials, who must still process his application, as long as DiPaola didn’t get paid as sheriff until he was sworn in for another term, he would have been entitled to both checks. He had already taken himself off the state payroll and intended to continue working as sheriff on a volunteer basis until next year.

The exception DiPaola planned to take advantage of was intended to prevent retirees who want to run for office from being penalized by having their pensions suspended. But in most prior cases, there was a break in service.

Elected officials who collect pensions while serving in office have almost without exception retired — really retired — before running for office. For example, Reed Hillman, a former state representative and the 2006 Republican candidate for lieutenant governor, retired from the state police before running for office.

Former State Police Colonel Thomas Foley is collecting a disability pension from his police service, and even though he agreed to reduce his pay if elected, his pension became an issue in his recent campaign for Worcester county sheriff. He lost to Republican state Representative Lewis Evangelidis.

Michael Widmer, president of the Massachusetts Taxpayers Foundation and a vocal advocate for pension reform, said clever public employees can find ways to manipulate state pension law.

“The loopholes are limitless, and there is no end to the creativity,’’ he said. “Public officials manage to find the very loophole that feathers their nest.’’

DiPaola was a Malden police officer for 18 years before being elected a state representative in 1992. His career on Beacon Hill ended with his successful campaign for Middlesex sheriff in a special election in 1996 — an election that was prompted by the conviction of the previous sheriff on corruption charges. DiPaola was elected to full six-year terms as sheriff in 1998, 2004, and this year.

If he had chosen to keep working rather than resign, his pension would have remained largely flat, since he has enough years of service to receive the maximum benefit allowed.

Joseph Connarton, the state public retirement commission director, said his agency’s interpretation of the law is that DiPaola could have legally received his pension and his salary, so long as he wasn’t paid as sheriff until his new term.

Tomorrow morning, DiPaola will have some explaining to do to his 800 employees.

When a reporter called the Middlesex County Jail on Friday asking to speak to the sheriff about his retirement, the clerk who answered the phone was puzzled.

“His retirement?’’ she said.

Andrea Estes can be reached at estes@globe.com. Sean Murphy can be reached at smurphy@globe.com.