Raabe Seeking Stress-Related O.C. Pension

Contending that his former job as assistant county treasurer left him so stressed out that he can no longer work, Matthew Raabe has asked that Orange County award him a lifetime disability pension.

But at the same time, he is asking for that old job back.

Raabe, who faces trial on six felony counts for his role in the county’s financial debacle, has formally applied to the Orange County Employees Retirement System for a stress disability pension, saying that working for former Treasurer-Tax Collector Robert L. Citron left him permanently disabled.

Tom Bogdan, assistant retirement administrator, said Raabe’s application for disability retirement appeared on the Retirement Board’s agenda Monday “without a staff recommendation,” and the board referred the matter to a hearing officer.

Bogdan, who declined to discuss details of Raabe’s application because medical and personnel records are deemed confidential, said it is unusual for the staff to send an application to the full board without a recommendation.

Two sources familiar with Raabe’s application say it contained a recommendation from a board-designated psychiatrist who had examined Raabe, and who recommended that the disability claim be approved.

If the hearing officer sides with Raabe, the matter will be referred back to the retirement board to adopt the “findings of fact and conclusions of law recommended by the hearing officer,” Bogdan said.

And if the hearing officer finds that Raabe’s disability was caused by his work, Raabe would be entitled to about half of his former $77,646 yearly salary--or $38,823 a year--and he would not be taxed on those benefits.

But if Raabe’s disability is not work-related, he would receive one-third of his former salary, or $25,882 a year.

No date has been set for the hearing.

Raabe could not be reached for comment. His brother, Michael Raabe, an attorney who is representing him before the retirement board, said, “I really don’t have any comment on that,” and abruptly hung up when reached at Chapman University School of Law.

Meanwhile, Raabe is also appealing his firing and asking for reinstatement.

After the appeal is reviewed, it is referred to arbitration, said Wanda Florence, a deputy county counsel.

After 10 years as a county employee, Raabe, 39, was fired by Thomas E. Daxon (then interim treasurer) in March for exercising poor judgment, shortly after trying to dodge a subpoena from a state Senate committee investigating the county bankruptcy.

He later appeared before the panel but declined to answer questions. As assistant treasurer, Raabe was frequently the point man in Citron’s drive to recruit more investors for the county-run pool, which ultimately lost $1.7 billion when Citron’s wrong-way bets on interest rates took their toll.

Raabe’s appeal for reinstatement must be referred to a mutually acceptable arbitrator “within a reasonable time,” Florence said, adding that it will be referred “in the near future.”

Once the arbitrator rules, Florence said Raabe will “either be reinstated, or the discharge will be upheld.” If Raabe wins reinstatement, the arbitrator also will determine whether he is eligible for back pay.

The retirement system’s Bogdan said the outcome of Raabe’s firing appeal could have an impact on the outcome of his pension claim. Using a hypothetical example, Bogdan said that “if an employee was wrongfully terminated and could continue with the job, it might be seen as prima facie evidence that he was not disabled.”

But it is unclear whether the pension matter could affect the termination appeal. “I’m not sure at this time,” said Florence. “We’re researching that.”

Shortly after Raabe was arrested on charges of securities fraud, a psychiatrist testified at a bail hearing that Raabe was once suicidal, suffers from “post-traumatic stress syndrome” and takes anti-depressant medication.

Raabe, who did not personally profit from the county’s investment losses, has portrayed himself as an unsophisticated underling who simply carried out orders.

He faces up to 14 years in prison and up to $10 million in fines if he is convicted of the same felonies to which Citron pleaded guilty in April. Two of the charges involve making false statements in connection with the sale of securities. Four concern alleged misappropriation.

Prosecutors contend that Raabe helped Citron skim some $80 million in interest earnings for the county that belonged to other investors in the pool.

Times staff writer Matt Lait contributed to this story.