The State Worker

Chronicling civil-service life for California state workers

April 28, 2011
Lawsuit claims prison receiver spiking CalPERS pension

Thumbnail image for 100609 gavel.jpgPeel away the legalese, and a 62-page lawsuit in Sacramento comes down to this accusation: Prison Receiver J. Clark Kelso -- with help from a federal judge, the state court administrative system and CalPERS -- is spiking his state pension with his federal salary.

Daniel E. Francis v. CalPERS contends that Kelso's employment agreement illegally washes his pay through the state Administrative Office of the Courts so that the money can be factored into his CalPERS pension. Kelso has said the arrangement, while unusual, is above board and legal.

Francis is a retired state worker and therefore a CalPERS member.

The Bee reported last year that when federal judge Thelton Henderson appointed Kelso to take over the state prison system's medical program in 2008, the California Prison Healthcare Receivership Corporation, the non-profit business arm of the receiver, and the AOC agreed to put Kelso on the AOC payroll.

Technically, Kelso is on loan to the federal court. The receivership corporation reimburses the AOC for Kelso's pay and benefits. Ultimately, the state pays the receivership's costs.

Kelso has worked in various capacities for the state, so he was in CalPERS before taking the receiver job. In an interview with The Bee last year, he was open about his AOC employment agreement and his desire to remain in CalPERS while working as a federal court appointee. He said that the arrangement was legally vetted and doesn't break any laws.

At least one former state employee who was already working for the nonprofit when Kelso came onboard, Linda Buzzini, tried and failed to get her pay retroactively applied to her CalPERS retirement.

The plaintiff wants the court to revoke Kelso's CalPERS membership as an employee of the AOC.

Here's the court filing:

Francis v. CalPERS

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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