Flaherty, 64, has informed the city he is retiring today from the department where he has worked since 1960, triggering his right to an annual retirement benefit of about $73,000 before taxes and other deductions, according to rules stated on the Haverhill Retirement Board Web site.
But Massachusetts law prohibits municipal employees from receiving a pension if convicted of a "criminal offense involving violation of the laws applicable to his or her office or position."
Flaherty has not been charged with any crime.
In two weeks, a Suffolk County grand jury is set to begin hearing the attorney general's case in the investigation that left Flaherty and his son Kevin Flaherty, a special projects foreman at the Highway Department, on paid leave Jan. 30. The leave was ordered by Mayor James Fiorentini the same day state police raided the Highway Department garage on Primrose Street and searched James Flaherty's home on Riverdale Avenue and a storage bay leased by him at Kazmiera Marina.
Attorney General Martha Coakley's office has refused to say what the investigation is looking to uncover. An assistant attorney general in Coakley's office has told a Haverhill District Court judge that the investigation is targeting the Flaherty men and "several others." Neither of the Flaherty men has been charged with a crime.
The state law governing pensions was most recently used to strip former House Speaker Thomas Finneran of his $31,000-a-year pension after Finneran pleaded guilty in federal court to obstruction of justice charges for misleading a civil court about his role as speaker in drawing voting district lines.
Haverhill Finance Director Charles Benevento, a member of the city's Retirement Board, said Flaherty's benefits rights are the same whether he retires or is fired "unless the city has cause to suspend or terminate those rights for cause having to do with moral turpitude."
The state's Web site explaining retirement benefits for public employees outlines the rules of such benefits.
"In no event shall any (public employee), after final conviction of an offense ... pertaining to corruption in official conduct ... be entitled to receive a retirement allowance or a return of his/her accumulated total deductions, nor shall any beneficiary be entitled to receive any benefits," reads the state's Public Employee Retirement Administration Commission Web site.
Neither Benevento nor Fiorentini would discuss the details of Flaherty's retirement benefits or the city's options in allowing or disallowing Flaherty's benefits. Both men referred The Eagle-Tribune to the state's Public Employee Retirement Administration Commission Web site, however.
The pension rules also include a provision that allows the local retirement board to hold a hearing to consider whether a retiree "misappropriated funds or property of the governmental unit" in which the retiree was employed. If the board finds that money or property was misappropriated, it may deduct that amount, as well as the cost of investigating the case, from the retirees' monthly benefit checks, the rules say.
Fiorentini had threatened to fire Flaherty last week, three days before Flaherty notified the city he is retiring today. In a letter to Flaherty's lawyer, Fiorentini said he was firing Flaherty for "many reasons," including "the ongoing audit which is being conducted of the Highway Department, the storing of private construction vehicles on Highway Department property and the management practices of the department."
Flaherty's lawyer has said Flaherty is retiring because of a heart condition that has been made worse by Fiorentini's "politically motivated indifference, lack of care and outright hostility toward a career employee with an unblemished record."








