                           NO. 4-10-0568        Opinion filed 2/18/11

                       IN THE APPELLATE COURT

                             OF ILLINOIS

                           FOURTH DISTRICT

MARY ANN ADAMS,                        )   Appeal from
     Plaintiff-Appellant,              )   Circuit Court of
     v.                                )   Sangamon County
THE BOARD OF TRUSTEES OF THE TEACHERS' )   No. 09MR848
RETIREMENT SYSTEM OF THE STATE OF      )
ILLINOIS,                              )   Honorable
     Defendant-Appellee.               )   Patrick J. Londrigan,
                                       )   Judge Presiding.
_________________________________________________________________

          PRESIDING JUSTICE KNECHT delivered the judgment of the
court, with opinion.
          Justices Steigmann and McCullough concurred in the
judgment and opinion.

                               OPINION

            In October 2009, defendant, the Board of Trustees of

the Teachers' Retirement System of the State of Illinois (Board),

found monies paid to plaintiff, Mary Ann Adams, while engaged in

an illegal kickback scheme did not constitute salary for pension

purposes.    On appeal, the circuit court of Sangamon County

affirmed the Board's judgment.

            Adams appeals, arguing her pension benefits should not

be reduced by the amount of monies paid to her while she

participated in an illegal kickback scheme.      We affirm.

                            I. BACKGROUND

            Between 1991 and 2005, Adams worked as the director of

Project E.C.H.O., an alternative high school established and

operated by the Franklin-Williamson Regional Office of Education.

Between September 1999 and August 2004, Barry Kohl was regional
superintendent of schools and Adams' supervisor.    In the summer

of 1999, Adams sought to expand Project E.C.H.O., providing

services to a juvenile detention center to be built in Franklin

County.    Adams earned between $50,000 and $55,000 per year.    She

asked Kohl for a raise "because of the [j]uvenile [d]etention

[c]enter work."    According to Adams, Kohl refused.

            Later, Kohl agreed to Adams' request for a pay raise,

on condition she pay to Kohl one-half of the net proceeds of her

pay raise on a monthly basis.    Between September 15, 1999, and

June 15, 2004, Adams received the salary she had previously been

paid for her employment at the regional office in the form of two

checks each month, together with the pay raise she requested and

received from Kohl in the form of two additional checks each

month.    Between September 15, 1999, and June 15, 2004, Adams

cashed one of the two paychecks she received as a raise and then

delivered the proceeds of the cashed check to Kohl.

            Between September 15, 1999, and June 15, 2004, Judy

Davis was the assistant director of Project E.C.H.O.    In

approximately 2002 or 2003, Adams spoke with Kohl about Davis'

need for additional money.    Kohl responded by asking Adams to

talk with Davis about an arrangement similar to the kickback

arrangement with Adams.    Adams spoke to Davis about Kohl's

proposal and Davis agreed.    Davis made monthly payments to Kohl

on the thirtieth day of each month by placing the cashed proceeds

of one of the two paychecks she received as a raise beneath the

blotter of her desk at the Project E.C.H.O. headquarters in


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Johnston City, Illinois.   Adams stopped making monthly kickback

payments to Kohl in June 2004, when she became aware of an

investigation of Kohl into the misappropriation of regional

office funds.

          Between September 1999 and June 2004, Adams never

reported to law-enforcement personnel her payments to Kohl.

Adams understood she was a public employee of the regional office

and the salaried compensation she received for her public

employment was funded by and with public monies.      Adams claimed

she was given additional duties on or before the time she asked

for a pay raise.   The Board had no evidence Adams did not perform

additional duties for the pay raises she received in any year.

Adams retired in May 2005.

          In July 2008, Adams received a letter from an employer-

services auditor employed by the retirement system.     The letter

follows, in pertinent part:

                 "The Illinois Teachers' Retirement

          System reviewed earnings reported for you[]

          by the Franklin-Williamson Counties ROE.

                 During the period 1999-00 through 2003-

          04, your creditable earnings reported by the

          Franklin-Williamson Counties ROE appear to be

          overstated.   Mr. Barry Kohl issued you a

          supplemental salary contract in return for

          you paying half of the additional salary to

          him.   The entire supplemental salary contract


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           was included in your reported annual salary

           rate and creditable earning each fiscal year.

                The reporting of TRS member compensation

           is governed by [section 1650.450 of Title 80

           of the Illinois Administrative Code

           (Administrative Code) (80 Ill. Adm. Code

           1650.450, as amended by 27 Ill. Reg. 1668,

           1676-79 (eff. Jan. 17, 2003)),] which defines

           'salary' as 'any emolument of value

           recognized by the System that is received ***

           by a member in consideration for services

           rendered as a teacher ***.'    Agreements,

           written or verbal, to return a sum of money

           to the individual authorizing a salary

           payment lacks consideration.    Lacking

           consideration, the amount of money that is

           subject to the agreement does not qualify as

           salary under TRS' salary rule."

           In December 2008, Adams sought administrative review

("solely upon the record agreed to by the parties") of the July

2008 staff decision to reduce her retirement benefits.

           The claims-hearing committee recommended upholding the

staff decision to disallow the following amounts as creditable

earnings to Adams: $24,175.82 for the school years 1999-2000,

2000-01, 2001-02, and 2002-03, and $26,813.19 for the school year

2003-04.   The committees's written recommendation found "but for


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kickbacks to Kohl, Adams would not have received the salary raise

and enhanced pension benefits."

           In October 2009, the Board voted to adopt the

committee's recommended decision.    In June 2010, the circuit

court affirmed the Board's decision.

           This appeal followed.

                           II. ANALYSIS

           Adams argues she can be denied benefits only if she (1)

is convicted of a felony or (2) provided no consideration for the

additional compensation she received.     We disagree.

           In an appeal from an administrative agency's decision,

this court reviews the agency's determination, not the circuit

court's.   Marconi v. Chicago Heights Police Pension Board, 225

Ill. 2d 497, 531, 870 N.E.2d 273, 292 (2006).     In all

administrative proceedings, the plaintiff bears the burden of

proof.   Marconi, 225 Ill. 2d at 532-33, 870 N.E.2d at 293.      Based

upon the question presented, this court reviews agency

determinations under three distinct standards of review.      The

agency's interpretation of a statute or administrative rule is a

question of law, which receives de novo review.     Marconi, 225

Ill. 2d at 532, 870 N.E.2d at 293.     The agency's factual

determinations will be upheld unless they are against the

manifest weight of the evidence.     Kouzoukas v. Retirement Board

of the Policemen's Annuity & Benefit Fund of the City of Chicago,

234 Ill. 2d 446, 465, 917 N.E.2d 999, 1011 (2009).       A finding is

against the manifest weight of the evidence where the opposite


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conclusion is clearly apparent.     Peacock v. Board of Trustees of

the Police Pension Fund, 395 Ill. App. 3d 644, 652, 918 N.E.2d

243, 250 (2009).   Finally, this court reviews mixed questions of

fact and law under the clearly erroneous standard.    See McKee v.

Board of Trustees of the Champaign Police Pension Fund, 367 Ill.

App. 3d 538, 543, 855 N.E.2d 571, 575 (2006).

          An administrative agency's decision is clearly

erroneous where the reviewing court comes to the definite and

firm conclusion the agency has committed an error.     Cinkus v.

Village of Stickney Municipal Officers Electoral Board, 228 Ill.

2d 200, 211, 886 N.E.2d 1011, 1018 (2008).    The clearly erroneous

standard provides some deference based upon the agency's

experience and expertise, falling between de novo and

manifest-weight-of-the-evidence review.     McKee, 367 Ill. App. 3d

at 543, 855 N.E.2d at 575.

          The retirement system was created to provide retirement

annuities and other retirement benefits for teachers.    40 ILCS

5/16-101 (West 2004).   To determine the proper annuity for a

retiring teacher, retirement system staff must determine a

member's final average salary.    See 40 ILCS 5/16-133(a)(B) (West

2004). "Final average salary" is defined as the average of the

highest four consecutive years of salary within the last 10 years

of creditable service, subject to the rules of the Board.    40

ILCS 5/16-133(b) (West 2004).    "Salary" is defined as the "actual

compensation received by a teacher during any school year and

recognized by the [retirement] system in accordance with rules of


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the [B]oard."   (Emphases added.)   40 ILCS 5/16-121 (West 2004).

Section 1650.450(a) of Title 80 of the Administrative Code

defines "salary" more specifically as "[a]ny emolument of value

recognized by the [s]ystem that is received, actually or

constructively, by a member in consideration for services

rendered as a teacher."   (Emphases added.)   80 Ill. Adm. Code

1650.450(a), as amended by 27 Ill. Reg. 1668, 1676-77 (eff. Jan.

17, 2003).

          We need not address Adams' initial argument she can be

denied benefits only if she is convicted of a felony.   The Board

did not seek to terminate Adams' retirement benefits alleging a

felony conviction relating to her service as a teacher.    There is

no relevant felony forfeiture statute applicable to these facts.

"[The Board] has never asserted that this applies in the case at

bar and it has never claimed that Adams' entire pension is

subject to forfeiture."

          Adams next argues the kickback money she paid Kohl was

"salary" as defined by the Administrative Code.   Specifically,

she argues the kickback money was additional compensation earned

for the performance of extra duties.

          Before the Board, Adams alleged she had increased

duties "[b]ecause of the [j]uvenile [d]etention [c]enter work,"

but the record does not show precisely what those duties were.

Adams references as "evidence" a four-page document she prepared

at the request of an investigator for the Illinois Attorney

General's office between 2001 and 2003, and detailing her duties


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and associated compensation.   The referenced document was not

included as a part of the record agreed to by the parties before

the Board, and is not a part of the record on appeal.    Further,

Adams admits she did not report to the investigator the details

of the illegal kickback scheme.    It is not the Board's burden to

establish Adams did not perform additional duties for the pay

raises she received in any year.   The plaintiff bears the burden

of proof.    See Marconi, 225 Ill. 2d at 532-33, 870 N.E.2d at 293.

            Further, Adams stipulated as follows: "Kohl agreed to

Adams' request for a pay raise, on condition that she paid to him

one-half of the net (i.e. after taxes) proceeds on a monthly

basis."   The monies paid Adams while engaged in an illegal

kickback scheme were not in consideration of services rendered as

a teacher.   Kohl denied Adams' request for a raise.   Adams would

not have been paid the monies if she did not agree to kickback to

Kohl one-half of the net proceeds on a monthly basis.   The monies

paid were in consideration of Adams cooperation and participation

in an illegal kickback scheme and did not constitute salary for

pension purposes.   Based upon this record, the Board's conclusion

"but for her kickbacks to Kohl, Adams would not have received the

salary raise and enhanced pension benefits" was not clearly

incorrect.

            Adams next argues because the Board did not find Adams'

earnings overstated during her final months of employment where

Adams did not participate in an illegal kickback scheme, the

Board's "conduct in this respect is tantamount to an admission


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that *** Adams gave adequate consideration for the additional

duties she performed."   We have already determined the monies

paid were in consideration of Adams cooperation and participation

in an illegal kickback scheme, and not additional compensation

earned for the performance of extra duties.   Adams stopped making

monthly kickback payments to Kohl in June 2004 and retired in May

2005.   The Board found monies paid to Adams "subject to the

agreement [did] not qualify as salary under [the Administrative

Code]."   The Board apparently concluded the monies paid to Adams

during her final months of employment and after she terminated

her participation in the illegal kickback scheme were not

"subject to the agreement," and did qualify as salary.

                          III. CONCLUSION

           For the reasons stated, we affirm the circuit court's

affirmance of the Board's determination.

           Affirmed.




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