The state's highest court ruled unanimously yesterday that former University of Massachusetts president William M. Bulger is entitled to most of a controversial $29,000 increase to his annual pension that he sweetened by including a monthly housing allowance.
In a decision that ends a three-year dispute between Bulger and top Massachusetts politicians and gives him a pension of about $196,000 a year, the Supreme Judicial Court said that Bulger correctly included the $2,419 housing allowance as income when he applied for a pension after more than four decades of work for the state.
But the court said Bulger could not include a $19,000 annuity he received in his compensation package as UMass president when calculating his pension.
Together, the housing allowance and annuity had boosted the pension from about $179,000 to about $208,000 a year. Now Bulger will get nearly 60 percent of that increase, or $17,000 a year, according to State Treasurer Timothy P. Cahill, who chairs the State Board of Retirement and opposed the richer pension.
Bulger's lawyer, Thomas R. Kiley, praised the ruling and said the increase would never have been an issue if his client were someone other than Bulger. Before he went to UMass in 1996, Bulger served 35 years in the Legislature, the last 17 as Senate president. The 72-year-old South Boston politician is a legendary powerbroker on Beacon Hill who became a symbol of patronage and corruption for critics, in particular, Governor Mitt Romney.
"Bill Bulger gets media attention," Kiley said. "He's a high-profile guy."
Bulger declined a request relayed by Kiley for comment on the decision. In an interview last month, Bulger defiantly said he fought for the increase as a "matter of principle" and that he refused "to be scared off by the critics."
Bulger served as UMass president until summer 2003, when Romney pressured him to leave amid controversy over a federal probe of his fugitive mobster brother, James "Whitey" Bulger. Detractors had characterized William Bulger as less than forthcoming in his testimony before a federal grand jury and a congressional committee investigating his brother's disappearance.
Attorney General Thomas F. Reilly, who challenged the pension increase, said yesterday that the state has been "very good to Bill Bulger" and that he was pleased that Bulger did not get everything he wanted.
"But this case has always been about more than Bill Bulger, and we should be concerned about the dangerous precedent this may set for our pension system," he said in a statement.
Cahill agreed, saying that 15 to 20 other public college presidents who receive housing allowances, and scores of government workers statewide who gets perks such as the use of cars, might seek to enrich their pensions.
"It's clear that the system was never designed to benefit any one individual to this level," he said.
Cahill, who vowed to submit legislation in January to stop others from following Bulger's lead, pointed out that Bulger's $17,000 increase is close to the average annual pension for a state worker, which is $20,000 to $25,000.
Romney, who had made Bulger a favorite target after running on a platform of curbing State House excesses, declined to comment through a spokesman.
State pensions are based on an average of a worker's top three consecutive earning years and a formula that considers age and years of service.
Bulger's annual salary was $309,000 for his final two years at UMass and $280,000 for the bulk of the previous year.
Writing on behalf of the high court, Justice John M. Greaney said state law is "straightforward and unambiguous" in concluding that different forms of payment, such as housing allowances, count as regular compensation.
The UMass Board of Trustees knew that Bulger continued to live in his South Boston home throughout his tenure as president, Greaney wrote. When the trustees renegotiated his contract in 1998, they felt "that Bulger had done an outstanding job as university president and considered Bulger's acceptance of a housing allowance as an important enhancement of his compensation package that would motivate his interest in the presidency for an additional five-year term."
But state law is clear, Greaney wrote, that regular compensation does not extend to payments made to an annuity fund like those Bulger received.
Yesterday's decision upheld a ruling last year by Suffolk Superior Court Judge Ernest B. Murphy, who said Bulger was entitled to count the housing allowance. But the high court reversed Murphy on the annuity.
Jonathan Saltzman can be reached at firstname.lastname@example.org.