SANTA ANA, Calif. - Mary-Jean Hackwood was demoted from the top administrative job at the $2.9 billion Orange County Employees Retirement System following an investigation into employee allegations she has a dictatorial and abusive manner.
Ms. Hackwood and her attorney vehemently denied the allegations.
But following the pension board's decision in late January to demote Ms. Hackwood, she now will work under a limited contract as a portfolio manager, primarily monitoring the system's money managers, according to fund officials.
The employee complaints to an investigative team assembled by the pension board also resulted in other sanctions against Ms. Hackwood. They include:
She must work at a to-be-determined site away from the system's employees.
She will receive an economic reduction in her total pay package.
Her access to the pension system's employees will be restricted.
She will be given a 13-month contract, expiring Feb. 28, 1997. This will give Ms. Hackwood 10 years of service at the fund, making her eligible for full retirement benefits.
She now will report to Terry Slattery, acting administrator, who until a couple of months ago was her subordinate. The pension fund will search for a new permanent administrator that will include Mr. Slattery on its candidate list.
Ms. Hackwood will get an administrative assistant to work with her, but a new employee must be hired unless one of the existing administrative assistants at the fund volunteers to take the job.
Other results of the investigation into her administrative abilities are yet to be determined, said Harley Bjelland, fiduciary counsel for the retirement system.
Early last December, employees told pension fund trustees that Ms. Hackwood was abusive, made personal telephone calls on the system's telephones and demanded underlings water her home plants when she was away. Following the accusations, Ms. Hackwood was placed on paid administrative leave until an investigation could be conducted.
Ms. Hackwood said she was "shocked" when she first learned of the employee allegations.
"No way did I ever intend to harass or hurt people. I have never, ever been abusive," she said.
Ms. Hackwood added, however: "I am inclined to be impatient if someone should have known better, if I told someone something two or three times .*.*. I am kind of a stickler."
She rejected some employee claims that she ever charged personal expenses to the system; she said she did not have an opportunity to respond to that issue.
Ms. Hackwood said she's puzzled by the number of employees - 16, or about half of the staff - who talked to investigators about her. Most of them were two or three levels below her, she said, and she rarely had much interaction with them.
Indicating her past support for the people who worked for her, Ms. Hackwood said she fought "hard" to get raises for the system's management employees, and unsuccessfully sought an exemption from a county wage freeze for non-management employees who would be paid by the pension fund.
At a subsequent staff meeting, she said she told employees that the Orange County Employees Association objected to one group of the union membership getting an increase in salary and not the entire membership.
"I could have gotten that (OCEA's point of view) incorrect or I misunderstood," she said. But union officials "became very irritated" and she apologized.
As for now, she said, "I want to get on with my life." She said she isn't the type of person to retaliate.
Cameron Smith, Ms. Hackwood's attorney, said the charges against her were "false as presented."
Although the pension board did a "thorough investigation" into the charges, Mr. Smith said he had mixed feelings about the fairness of the proceedings.
Because Ms. Hackwood served at the pleasure of the board, the board could have fired her without giving a reason. The board did hold a hearing, hired an investigative firm and gave Ms. Hackwood an opportunity to respond at the hearing, which she did, he said.
But, Mr. Smith said, he and Ms. Hackwood had little time to review and prepare a response to the findings of the investigation. He said Ms. Hackwood didn't have access to her office, where she kept records, and wasn't allowed on the premises of the fund offices during the investigation and before the hearing.
He said the investigative team's findings contained unfounded employee statements and exaggerations that could have been rebutted had Ms. Hackwood been allowed to cross-examine the employees who made the charges.
"The investigative team has been directed to finalize any alleged improprieties with respect to personal use. Those allegations will be presented to Ms. Hackwood for her review and rebuttal," said Mr. Bjelland, the board's fiduciary counsel.
Ms. Hackwood is "absolutely devoted to the (retirement) system. She is a very remarkable employee who takes her job seriously," said Mr. Smith.
"She (Ms. Hackwood) has strengths and weaknesses just like everybody else, " he said.
Sources close to the board proceedings said the actions taken against Ms. Hackwood resulted primarily not from any wrong-doing, but from the feeling that Ms. Hackwood lacks personnel management skills.
Ms. Hackwood has offered to repay the system for any cost of services incurred that should have been her own.
In fact, Mr. Bjelland said most members of the pension board believe Ms. Hackwood has "incredible ability" and had done a "great job" and received "rave reviews" on money management, budgeting and organization. However, the board felt an administrator has "to manage staff effectively, said Mr. Bjelland. Ms. Hackwood appeared to be a "very dictatorial type of manager who likes to have it done her way," he said.
At least one board member - John M.W. Moorlach, the county treasurer-tax collector - said he wanted Ms. Hackwood's employment to be terminated, and he voted against the demotion.
"I don't believe this package approach will work. I think immediate termination (of Ms. Hackwood) would have been the best solution," said Mr. Moorlach.
The trustees voted 7-2 to demote Ms. Hackwood.
