In 2008, when the economy went south, many private businesses and government organizations looked at their retirement policies to see if they could do a little belt tightening. For those that did not do this themselves, there were eager reporters. The New York Times, for example, reported that “virtually every career employee” of the Long Island Rail Road applied for, got and was collecting full disability payments after retiring early. Many had apparently gone to doctors with false claims such as those of one man who said he had disabilities that “made it hard for him to sit, stand, walk, dress himself, bathe himself or hold a pen for any length of time.”
Soon thereafter, photos of disabled railroad retirees, with names, appeared in the news, showing them golfing, and there were reports of them doing things, going to the gym, biking or enjoying other vigorous activities in such places as Florida. It was a miracle. No it wasn’t.
In the end, in 2013 (the wheels of justice grind slowly), government investigators ordered the immediate termination of benefits for more than 700 LIRR retirees who had gone to two “recommended” doctors who’d pronounced them disabled. They had done wrong and they deserved this. Then 33 people, including the two doctors, were hit with criminal charges and were either convicted or pleaded guilty and some went to jail; 44 others avoided prosecution by admitting their role in the fraud and voluntarily renouncing their disability payments. All together, about $400 million in railroad benefits have been forfeited or returned.
Last month, a special federal watchdog, Martin J. Dickman, the Inspector General of the U.S. Railroad Retirement Board (USRRB), revealed that, five years later, things are still far from all right here in Long Island Rail Road land.
Of the 700 former workers who had been “approved” by the two doctors and had their disability terminated, nearly 500 have reapplied, he noted. At the present time, he reports, roughly 96 percent of those who apply are still approved.
“I find it inconceivable and unacceptable that the R.R.B. plans on utilizing the same division disability claims examiner structure which had ineptly adjudicated applications through the duration of the LIRR fraud scheme,” he wrote.
A spokesman for the MTA, which oversees the LIRR, said, after this study came out, that the MTA “shares the Railroad Retirement Board inspector general’s outrage over the continued mismanagement of the program,” and that “the LIRR has fully cooperated with federal and local authorities into the investigation of those who have abused the system.”
It should be pointed out that neither the MTA nor the LIRR decides who gets disability. That is done by this Railroad Retirement Board, a three-person federally appointed board in Chicago, whose staff reviews applications from around the country. But does that not mean that the LIRR or the MTA should not know what was going on?
The chairman of the RRB, Michael S. Schwartz, disputed the federal watchdog’s report. He said all applicants get reviewed based on new and current medical evidence, with special cases reviewed by those trained “in fraud awareness.” He also pointed out that disability applications for the LIRR declined by 38 percent between 2010 and 2012.
In 2010, however, the start of this comparison, the scandal was already nationally known and well under investigation.
Mr. Dickman, the writer of the report, says he will recommend that the disability program for the whole federal Railroad Retirement Board be either terminated or severely cut back if changes are not made quickly.
His report, together with Mr. Schwartz’s response, now goes to Congress for further action.