CalPERS wants former police chief to return $1.8 million in retirement benefits

The California Public Employees’ Retirement System is demanding that the former Police Chief of a small 11-member police department near San Francisco pay back $1.8 million in retirement benefits that he collected while continuing to work full-time.

The payment demand, which is one of the largest in the 90-year history of CalPERS, centers on David Parenti, who the pension system said worked as police chief and other positions, at the Broadmoor Police District in San Mateo County, between 2007 and 2020 while also collecting retirement benefits.

California law prohibits retired CalPERS recipients from working full-time for the state or a local governmental entity that pays CalPERS retirement system benefits.

Parenti’s retirement benefits were almost $13,000 a month in some years, CalPERS documents show.

But Parenti, who has also been the subject of a criminal probe by the San Mateo County District Attorney’s Office, has won round one in his battle with CalPERS, the giant California pension system, that covers 650,000 retirees and another 1 million active members.

CalPERS loses round one

On July 28, San Francisco Superior Court Judge Richard Ulmer ordered CalPERS to restore Parenti’s pension payments that were cut off on April 20. That followed a March determination by the pension system that Parenti was unlawfully employed at Broadmoor because he was receiving pension benefits at the same time as working.

Ulmer said Parenti was entitled to a hearing before CalPERS cut off his benefits.

“CalPERS interest in avoiding overpayments to pension recipients, while legitimate, does not outweigh plaintiff’s interests,” he said.

Parenti’s lawyer Scott Kivel said the judge was following state rules that every CalPERS participant is entitled to a hearing by a state administrative law judge before their benefits are cut or eliminated.

“The action CalPERS took against Mr. Parenti was not allowed,’‘ he said, an example of underground regulations that the pension system arbitrarily applies to recipients.

CalPERS general counsel Matt Jacobs said he is confident that CalPERS will ultimately prevail.

“We respect the judge’s decision on this initial procedural skirmish, which held only that we shouldn’t reduce Mr. Parenti’s pension while the case is pending,” he said. “We remain confident that we will prevail on our primary allegation that Mr. Parenti was unlawfully double-dipping by receiving both a pension and a salary from the same agency.”

Pension battle is far from over

An administrative law judge is expected to hear the case on November 7 but that hearing will only determine whether pension benefits can temporarily be taken away. A full hearing on whether Parenti will ultimately need to repay the $1.8 million has yet to be scheduled.

On Aug. 8, Parenti posted a $177,000 bond, a requirement of Judge Ulmer. The bond guarantees that Parenti can repay some of his pension benefits if CalPERS prevails.

Parenti is one of three police chiefs and a top commander in the Broadmoor Department that CalPERS said in a January audit defrauded the pension system for more than a decade. CalPERS has not taken legal action against the other three individuals.

It’s unclear if the other three individuals have paid back any of the money the system says they received. CalPERS would not comment.

The bulk of the what CalPERS views as wrongly paid retirement payments are attributed by the pension system to Parenti.

How CalPERS says it happened

CalPERS records filed in connection with the court case seek repayment by Parenti of the $1.8 million and give for the first time a detailed history of his alleged defrauding of the state retirement system.

Parenti started at Broadmoor in 2006 as an unpaid reserve officer. He had just retired from the San Francisco District Attorney General’s Office in December 2005 and started collecting CalPERS benefits.

He ended his career as a lieutenant at the DA’s office. One of his duties in his last year was guarding then San Francisco District Attorney Kamala Harris, now the Vice-President of the U.S.

Broadmoor is the last police district of its kind in California. There is no town or city of Broadmoor. The approximate two-mile square area patrolled by the police district is an urban area surrounded by Daly City on three sides and Colma on the fourth. The unincorporated area has a population of around 8,000 residents.

Because the district attorney’s office employees received CalPERS benefits, Parenti could not work full-time for the Broadmoor Police District, another agency that paid CalPERS benefits to its employees, unless he rescinded his retirement.

CalPERS said Parenti’s post-retirement employment for Broadmoor from July 1, 2007 to Nov. 30, 2012 as a paid police commander did not comply with state rules prohibiting full-time employment while collecting retirement benefits.

In addition, CalPERS says that Parenti in his full-time role as police commander, received an hourly rate of $138.88 and $144 during the 5-year time period, more than three times the $46.53 publicly available pay scale the Broadmoor Police District had published.

CalPERS rules limit retirees from working more than 960 hours a year for an entity paying CalPERS benefits and the pay for those hours is prohibited from exceeding what other employees would make performing comparable duties.

A higher pay rate would have the effect of increasing pension benefits.

In December 2012, Parenti rescinded his retirement and was considered an active employee of Broadmoor, CalPERS documents show.

Various moves spiked pension benefits

The pension system said the move increased his retirement compensation. A year later he retired again on Dec. 28, 2013.

But not before Parenti became the Chief of Police for Broadmoor at the end of 2012, CalPERS said. The pension system said he worked in that position from Dec. 1, 2012 through December 28, 2013, earning $78 an hour.

CalPERS said it could not find documents that an active search was conducted by the Broadmoor Police District for the position.

It said the one-year reinstatement to active duty before retiring again increased Parenti’s monthly retirement from $7,778 a month or $93,336 a year to $12,691 a month, or $152,292 a year.

Parenti, meanwhile, continued to work full-time as Chief of Police, CalPERS said, even though he was now retired again.

His new salary: $173.61 an hour. That was more than the $61.17 to $62.42 an hour the police chief was supposed to make at the time, according to the publicly available pay scale at the time, CalPERS said.

Parenti also received special payments. CalPERS said he received $12, 813 in the pay period ending January 3, 2015, $29,514 and $12,813 in the pay period ending March 14, 2015.

CalPERS said the three-member civilian body governing the Broadmoor Police District could not provide supporting documents explaining why Parenti received the compensation.

By March 29 of 2015, Parenti had given up the Chief of Police position and switched back to the commander’s position, CalPERS records show.

.He continued to receive his $12,813 monthly pension payment and hourly rates of $173.61 and $60 an hour, between March 2015 and December 2018. It’s unclear why Parenti received the two rates, but CalPERS said the commander’s maximum pay rate for Broadmoor was $48.79 an hour.

Workers comp settlement

While Parenti continued working and received retirement benefits, CalPERS documents show he also received a workers compensation settlement from the Broadmoor Police District of $108,500 on August 4, 2017.

The nature of the settlement is confidential. One person, who has seen a copy of the settlement, but could not give his name, because he was not authorized to speak about it, said Parenti was given the disability payout because of heart problems.

Normally, that would have ended his career or at least forced him to change positions. CalPERS rules don’t allow a disability award recipient from continuing in the same position with the same duties after they receive a tax-free settlement.

Yet, CalPERS documents show that Parenti continued in his commander’s position. He also continued receiving his retirement payments.

In Dec, 2018, Parenti became Broadmoor’s full-time Chief of Police again, the CalPERS documents show.

CalPERS said how he became Chief of Police is unclear. CalPERS said no records exist at the Broadmoor Police District showing that Parenti was appointed to the position by the three members of the district.

But Mike Connolly, one of three commissioners who served on the board of the Broadmoor Police District from 2016 to 2019, said the board approved his position in open session.

He said Parenti bought a new chief’s uniform because he was so excited about the position. Connolly said that caused him and the other two commissioners to approve making Parenti chief again.

CalPERS said Parenti received $60 an hour in that position for more than a year and a half until June 23, 2019.

The pension system said that was beyond the district’s normal pay rate for the position, but Parenti continued to receive retirement benefits in violation of state rules.

The week after Parenti left the chief’s position on June 29, 2019, CalPERS said Parenti received an undefined lump-sum compensation of $48,075.

The pension system said that the Broadmoor Police District stated that the lump-sum compensation was related to Parenti’s tenure as Chief of Police.

CalPERS contends records are lacking

However, CalPERS said no records were available to explain the compensation. The pension system said it was told by the Broadmoor Police District that Parenti took the records with him after being terminated by the police district.

Parenti’s final position at Broadmoor from late June 2019 to July 2020 was as an investigator. CalPERS said he was paid hourly rates of $60 and $40 an hour.

The district indicated that the position was part time, which is allowed under CalPERS rules while collecting retirement benefits. But CalPERS said there was no documentation that the position was of limited duration as required by state rules.

Connolly, the Broadmoor Police District commissioner, ended up replacing Parenti as Police Chief in mid -2019. Connolly terminated Parenti in July, 2020.

Connolly said he lost faith in Parenti after discovering records indicating that Parenti had received more compensation than he would have legally been entitled to in various positions at the department over the span of his employment at the district.

Connolly said he did not realize what was actually occurring at the district regarding Parenti’s double-dipping because he and other commissioners had been misled by the former police official.

Connolly, a former San Francisco Deputy Police Chief, was forced to resign in June 2021, as part of a settlement of misdemeanor charges brought against him by the San Mateo County District Attorney’s Office. Connolly was chairman of the three-person Broadmoor Police District Commission, when it voted in March 2019 to make him chief, a violation of state government ethics rules.

San Mateo County District Attorney Steve Wagstaffe has said that Connolly was earnestly trying to clean up the Broadmoor Police District, and the ethics charges against him were unfortunate.

In legal papers filed with CalPERS, Parenti alleges that he was in fact a whistleblower who brought to light financial mismanagement at the Broadmoor Police District to the district’s governing body and several agencies including The San Mateo County District Attorney’s Office, the California State Auditor’s Office, the California Fair Political Practices Commission and the Federal Bureau of Investigation.

He said the reason he was told he was terminated was for reporting the financial irregularities. He does not go into detail on those financial irregularities or who told him that he was being terminated for financial irregularities.

Parenti’s attorney fights back

As far as the charges against Parenti, one of his lawyers Scott Weiner said in legal documents on February 3, that the pension system made “a number of factual errors in detailing his client’s employment at Broadmoor.”

Weiner did not detail most of those alleged errors, but said in 2020, CalPERS had Parenti employed as Chief of Police when he was not employed in that position.

Weiner said Parenti was only following the rules regarding his employment at Broadmoor.

“It does not appear that the issue with my client was an isolated incident or was a case where he intentionally violated the rules,” Weiner said. “He (Parenti) was hired by the police department and followed the practices that were put into place by that agency.

“Unfortunately, it appears as if no one at the agency (Broadmoor) knew about the rules and because of that, it does not appear that your audit found that anyone who was retired was working correctly.”

The status of the criminal probe involving Parenti is unclear. District Attorney Wagstaffe, who confirmed earlier this year that Parenti was under investigation, did not respond to phone calls by The Bee.

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This story was originally published August 10, 2022 at 5:00 AM.