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FIRST DIVISION
June 9, 2003

No. 1-02-0236
 
 

Chicago aldermen are among the wide variety of Illinoismunicipal employees subject to state statutory provisions that disqualify them from pension benefit eligibility if they areconvicted of a felony relating to, arising out of or connectedwith their employment. Plaintiff Lawrence S. Bloom, a formerChicago alderman, pleaded guilty to the charge of filing a falsefederal tax return, a felony. Since, in the course of thenegotiation and signing of his plea agreement, Bloom admittedthat some of the funds falsely categorized on his return wereamounts paid to him in exchange for his improper use of hispublic office, the trustees of his pension fund found his crime"arose out of or was in connection with" his position and deniedhis application for benefits. Bloom appeals a circuit courtorder upholding that determination; we affirm.

Bloom, alderman of Chicago's Fifth Ward from 1979 to 1995,was charged with multiple crimes in a 14-count federal indictmentissued in July 1997. Although the indictment resulted from the"Silver Shovel" investigation of corruption in city governmentand accused Bloom of activities that would have constitutedmisuse of his public office, two counts of the indictment allegedthat Bloom had filed false federal tax returns and did notinclude any claims of official misconduct.

Bloom reached agreement with federal prosecutors on a pleaof guilty to one of the tax charges: that he filed a return forhis private real estate business, Shoreline Realty Company, whichstated that the company had incurred a loss of $89 for the year1994 although he knew that the company had in fact ended the yearwith material net taxable income. As a result of the agreement,Bloom was convicted of filing a false return and the remainingcounts of the indictment were dismissed.

In the sentencing process, prosecutors asked United StatesDistrict Court Judge Milton Shadur for an enhancement of Bloom'spenalty because his conviction "involved the abuse of a positionof public trust." Judge Shadur denied that request: "I am notagreeing with that position. The offense of conviction as such,the violation of the tax law, did not involve an abuse ofposition of public trust just because some of the funds that werereceived and reported improperly had derived from circumstancesin which other counts that have not served as a basis for aguilty plea could be characterized in that fashion." Bloom received a six-month prison sentence and a $5,000 fine.

In February and April of 1999, Bloom sent written requestsfor annuity payments to the entity that was to provide hispension benefits, the Municipal Employees' Annuity and BenefitFund of Chicago (the Fund). Neither request prompted paymentfrom the Fund. Instead, the Fund's board of trustees (the Board)conducted a hearing on Bloom's eligibility and issued a writtendetermination that Bloom's conviction disqualified him frombenefits pursuant to a provision of section 8-251 of the IllinoisPension Code (40 ILCS 5/8-251 (West 1998)): "None of the benefitsprovided for in this Article shall be paid to any person who isconvicted of any felony relating to or arising out of or inconnection with his service as a municipal employee."

The Board's order was based on several findings of fact,including:

"Lawrence S. Bloom was convicted of thefelony of preparing and filing a falseFederal Income Tax Return on which hereported income that he admitted he receivedfor performing unlawful acts as an Aldermanof the Fifth Ward; 

In exchange for money, Mr. Bloom used hisname, official position, and influence asAlderman of the Fifth Ward to assist JohnChristopher in obtaining and operating sitesfor his private rock-crushing business;

Mr. Bloom accepted money and used hisposition and influence as Alderman of theFifth Ward to obtain street sweeping to cleanup waste created by Mr. Christopher's privatebusiness;

Mr. Bloom accepted money and used hisposition and influence as Alderman of theFifth Ward to contact another alderman onbehalf of Mr. Christopher's private business,while misrepresenting and concealing Mr.Christopher's identity;

While failing to disclose his financialrelationship with Mr. Christopher, Mr. Bloomaccepted money and used his position andinfluence as Alderman of the Fifth Ward todeflect constituent complaints about Mr.Christopher's private business;

In exchange for money and in violation of hisaldermanic position, Mr. Bloom assisted Mr.Christopher in obtaining snow removalcontracts;

On a Federal Income Tax Return for acorporation owned and operated by Mr. Bloom,Mr. Bloom improperly reported the money hereceived from Mr. Christopher in violation ofhis aldermanic position;

The income which Mr. Bloom improperlyreported on a Federal Income Tax Return aroseout of or was obtained in connection with hisemployment as Alderman for the Fifth Ward."

The Board's ultimate "Conclusion of Law" was that "[t]hemoney that Mr. Bloom unlawfully obtained and improperly reportedon a Federal Income Tax Return for which he was convicted of afelony arose out of or was in connection with his office as aFifth Ward Alderman for the City of Chicago."

Bloom sought review of the Board's decision in the circuitcourt of Cook County pursuant to the Administrative Review Law(735 ILCS 5/3-101 et seq. (West 1998)). On cross-motions forsummary judgment, the circuit court affirmed the Board's ruling,and this appeal followed. In an appeal of a circuit courtdecision on a complaint for administrative review, our role is toreview the administrative ruling rather than the circuit court'sdecision. Siwek v. Retirement Board of the Policemen's Annuity &Benefit Fund, 324 Ill. App. 3d 820, 824 (2001), citing Calabresev. Chicago Park District, 294 Ill. App. 3d 1055, 1065 (1998).

Bloom contends that the applicability of section 8-251 ofthe Pension Code was conclusively determined by the judgment ofconviction in the district court. This contention is based uponthe elements of the crime he was convicted of and upon JudgeShadur's explicit rejection of the suggestion that the offenseconstituted an abuse of a position of public trust. In our view,this argument accurately recites the elements of Bloom's crimeand the district court's factual findings but overstates theirrelevance to the pension eligibility issue.

In Devoney v. Retirement Board of the Policemen's Annuity &Benefit Fund for the City of Chicago, 199 Ill. 2d 414 (2002), oursupreme court reviewed a pension forfeiture decision governed bya policemen's pension statute containing disqualificationlanguage substantially identical to section 8-251. The Devoneycourt's analysis began with a review of the elements underlyingthe disqualifying felony: "The federal indictment under whichDevoney was charged does not identify him as a police officer,proof of his employment as a police officer was not necessary toestablish his guilt, and his association with Chicago's policedepartment is not mentioned in his written plea agreement withthe United States Attorney. For purposes of criminal liabilityunder the governing federal statute, what mattered is the actionhe took, not his official status when he acted." 199 Ill. 2d at422-23. In this regard, Bloom's crime is directly analogous: theelements of his tax offense were that he filed a return that heknew to be false. As in Devoney, Bloom's crime required no proofrelating to his official position.

But the Devoney court inquired further: "That being said, wenevertheless believe that the circumstances surrounding the crimeestablish that the offense was related to Devoney's work as apolice officer." 199 Ill. 2d at 423. The court ultimatelyaffirmed pension board, circuit court and appellate courtdecisions ruling that Devoney's conviction disqualified him frompension eligibility. 199 Ill. 2d at 424. Devoney thusdemonstrates that analysis of the "relating to, arising out of orconnected with" language of the pension forfeiture statutes isnot concluded upon a showing that the disqualifying felony, byits own terms, does not call for proof of official misconduct. In light of that demonstration, and in light of the absence ofany evidence that the federal district court was presented withor intended to resolve the statutory pension disqualificationquestion, we must reject Bloom's assertion that Judge Shadur'sruling was dispositive of the issue.

Bloom also contends that the only evidence of a connectionbetween his felony conviction and his public office was providedby items not properly considered by the Board: the "PleaAgreement" and "Admissions For The Purpose Of Sentencing"documents he signed at the conclusion of his negotiations withfederal prosecutors. We concur with his assessment of thesignificance of those documents. The elements of Bloom's crime,as previously stated, required no proof of his official position. His plea agreement, however, included the following admissions:

"Specifically, in 1994, defendant receivedcash payments totaling $6000 from JohnChristopher and a Special Agent of the FBI,who are further identified in paragraph 1 ofCount Two of the indictment, as well as $3000from another individual. Defendant thenpersonally prepared the 1994 Shoreline Realtyincome tax return and entered the $9000 asrental income from a rental property owned byShoreline. He did so knowing at the time hemade this entry that the $9000 was not rentalincome from that property. He also knew thatShoreline Realty had losses regarding therental property that exceeded its actualincome and that under applicable laws andregulations those losses would be deductibleonly if there was additional income from thatproperty against which the losses could betaken. Entering the $9000 on Shoreline'sreturn as rental income allowed Shoreline todeduct from its taxable income the otherwisenon-deductible amounts of losses from therental property, which reduced bothShoreline's and defendant's own taxableincome."

Having thus provided a link between the Christopher paymentsand his crime, Bloom provided the remainder of the connection,the link between the Christopher payments and his publicposition, in the sentencing admissions:

"In 1994, in exchange for money, defendantagreed to use and did use his name, officialposition, and influence as an Alderman of theFifth Ward to assist Christopher in obtainingand operating sites for rock-crushing, whichincluded (1) making a request for City-fundedservices in the form of street-sweeping toclean up waste which Christopher representedto defendant had been created byChristopher's private business; (2)contacting another alderman on behalf ofChristopher's business, while misrepresentingand concealing Christopher's identity; and(3) telling Christopher that he deflectedconstituent complaints about Christopher'sbusiness, all the while failing to disclosehis financial relationship with Christopherand to the site. During this period,defendant accepted $4000 in payments fromChristopher in connection with his rock-crushing business, understanding thatChristopher was making those payments inreturn for the official acts of defendant."

In arguing that these documents were inadmissible and thusimproperly considered by the Board, Bloom claims that our supremecourt's opinion in Devoney and Rule 11(e)(6)(D) of the FederalRules of Criminal Procedure (Fed. R. Crim. Proc. 11(e)(6)(D))each operate to prohibit the Board's reliance on those items. Wedisagree.

In Devoney, the plaintiff police officer was convicted of afederal mail fraud offense, and the district court, indetermining an appropriate sentence, considered a prior incidentof obstruction of justice that was admittedly related to theplaintiff's employment. The Devoney court found the obstructioncharge to be irrelevant to the plaintiff's pension eligibilityclaim, and from this finding, Bloom attempts to extrapolate aprinciple of broader application: that evidence of crimes otherthan the disqualifying felony cannot be considered by pensionboards deciding the statutory "relating to, arising out of orconnected with" issue.

The Devoney court, however, did not purport to follow orannounce a rule limiting the nature of evidence that may beconsidered by municipal pension trustee boards. Rather, thecourt ruled the plaintiff's obstruction conduct to be irrelevantonly upon making two findings: that the conduct was "whollyunrelated to his culpability in this case" and that it "did not,itself, result in a felony conviction." Devoney, 199 Ill. 2d at423. Though Devoney confirms that evidence of a crime that doesnot result in conviction cannot, by itself, disqualify amunicipal employee from pension benefits under the forfeiturestatutes, nothing in the court's analysis can be construed as aper se prohibition of other crime evidence in pension forfeitureproceedings, or as an edict that such evidence, if related to theallegedly disqualifying felony, may not be considered as proof ofthat felony's relationship to the employee's public position. Weare therefore unpersuaded by Bloom's claim that Devoney barredthe Board's consideration of his plea agreement and sentencingadmissions.

We are similarly unpersuaded by Bloom's contention thatexclusion of his admissions is required by Rule 11(e)(6)(D) ofthe Federal Rules of Criminal Procedure. In pertinent part, thatrule provides: "Except as otherwise provided in this paragraph,evidence of the following is not, in any civil or criminalproceeding, admissible against the defendant who made the plea orwas a participant in the plea discussions: *** (D) any statementmade in the course of plea discussions with an attorney for thegovernment which do not result in a plea of guilty or whichresult in a plea of guilty later withdrawn." Fed. R. Crim. Proc.11(e)(6)(D).

Bloom apparently interprets the rule to require exclusion ofstatements that do not by themselves result in a plea of guilty. The plain language of the rule suggests otherwise, however: itdictates an inquiry into whether the discussions with prosecutorsled to a guilty plea, not whether an individual statement itselfproduced that result. In the instant case, Bloom's discussionswith prosecutors clearly led to a guilty plea that was notsubsequently withdrawn. In our view, this fact renders Rule11(e)(6)(D) inapplicable to all statements made in the course ofhis discussions, even if those statements described criminalconduct that did not result in an additional guilty plea. Weconclude that the rule, like Devoney, offers no basis forexclusion of Bloom's plea agreement and sentencing statements.Finding no other barrier to their admissibility, we hold thatthey were properly considered by the Board.

In the absence of a felony requiring proof of officialmisconduct, Illinois courts determining the applicability of thepension forfeiture statutes have found that "the pivotal inquiryis whether a nexus exists between the employee's criminalwrongdoing and the performance of his official duties." Devoney,199 Ill. 2d at 419, citing DiFiore v. Retirement Board of thePolicemen's Annuity & Benefit Fund, 313 Ill. App. 3d 546, 551(2000). We disagree with Bloom's contention that no nexus hasbeen established in the instant case.

In Devoney, the nexus was based on a "but for" link betweencrime and public employment that Bloom claims is absent here, Thetraditional view of the "but for" test is that the test is notmet if the resulting event would have occurred even in theabsence of the questioned cause. Thacker v. UNR Industries,Inc., 151 Ill. 2d 343, 354 (1992). In his plea agreement, Bloomadmitted that he falsified his tax return in two respectsunrelated to the improper payments received from Christopher:additional sums paid to him by an unidentified individual andreportable as ordinary income were also listed as Shorelinerental income; and a housekeeper who cleaned Bloom's personalresidence was paid with Shoreline checks and her wages werededucted as a business expense despite the fact that she did nowork for the company. Since these admissions establish bases forBloom's conviction that are independent of his public office,they would appear to negate a "but for" connection between hisposition and his crime.

The Devoney court, however, though approving a policepension board's "but for" approach, did not mandate theapplication of that test in every nexus analysis: "Based uponthese circumstances, there was ample ground for the RetirementBoard's finding that 'but for the fact that Devoney was a PoliceOfficer of high rank,' he 'would not have been in a position orselected to participate in the scheme ***.'" (Emphasis added.)Devoney, 199 Ill. 2d at 423. Other causation formulations remainviable in Illinois, both within and outside the pensionforfeiture context.

In outlining the parameters of our proximate causejurisprudence, Illinois courts have recognized an alternativemeans of analyzing the existence of a causal link: the"substantial factor" test, under which the link is established ifthe questioned cause "was a material element and a substantialfactor" in bringing about the subsequent occurrence. Thacker,151 Ill. 2d at 354-55.

In Goff v. Teachers' Retirement System, 305 Ill. App. 3d 190(1999), appeal denied, 185 Ill. 2d 623 (1999), the appellatecourt, in attempting to define the "relating to, arising out ofor in connection with" language of the forfeiture statutes,adopted an approach parallel to the "substantial factor"analysis. The court observed that the forfeiture statutes'terms, in their customary application, were "very broad," andcited an example from the employment injury area: "'[A]n injurycan be said to arise out of one's employment if its origin is insome way connected with the employment so that there is a causalconnection between the employment and the *** injury.'" (Emphasis in original.) 305 Ill. App. 3d at 195, quotingConsolidated Rail Corp. v. Liberty Mutual Insurance Co., 92 Ill.App. 3d 1066, 1068-69 (1981).

The Goff court, in review of a denial of benefits to ateacher convicted of aggravated criminal sexual abuse, focusedits analysis on the means by which the claimant used his positionto facilitate his crimes. His in-school access to one victimallowed him to intensify his efforts to entice the youth toengage in the prohibited liaison and to encourage the victim'sparticipation in the out-of-school activities where the crimeseventually took place. 305 Ill. App. 3d at 193. The secondvictim reported that the claimant's position as school principalwas a factor in inducing his consent to improper sexualactivities. 305 Ill. App. 3d at 195.

The court was clearly presented with evidence that the Goffclaimant's position was not the sole cause of his crimes and justas clearly unpersuaded by this evidence: "Goff's 'service as ateacher' was merely one of the many tools that he used tosexually abuse his victims. It is of no consequence that thefelonies for which Goff was convicted were connected both to his'service as a teacher' and to other endeavors." 305 Ill. App. 3dat 196. The court found the necessary connection between theclaimant's crimes and his position, and affirmed the denial ofhis pension benefits. 305 Ill. App. 3d at 196-97.

In our view, these precedents indicate that the "but for"causation test is merely one acceptable method of establishingthe nexus between crime and public employment required forforfeiture under the pension statutes and that other means ofestablishing this link are equally permissible.

Application of these principles to the facts of the instantcase compels the finding that Bloom's felony conviction forfeitedhis pension benefits. His admissions indicate that the improperpayments from Christopher were material elements and substantialfactors in his resulting tax conviction. Bloom's felony, likethose of the Goff claimant, is clearly connected to his publicservice as well as other factors. As in Goff, we hold that theexistence of the connection to other factors does not negate theconnection to Bloom's office. On these facts, the Board's denialof his benefits was proper, and the circuit court's judgment inits favor was appropriate.

Accordingly, we affirm the judgment of the circuit court ofCook County.

Affirmed.

GORDON, P.J., and O'MALLEY, J., concur.