Income and Assets

Posted by JJinPhila on April 6, 2009 

This entry will discuss the financial assets and pre-disappearance income of former Centre County District Attorney Ray Gricar.  Mr. Gricar’s public salary has been published, in a series of books referred to as the Pennsylvania Manual.  Some of the information is based on press reports of his rough bank balance.  Some of it looking at interest rates and using an interest calculator to calculate the amount of interest.  This is not, repeat not, a call for the members of the Gricar family to release, publicly, or privately to me, Mr. Gricar’s assets. 

            I more than understand that to protect those assets, they should not be publicly discussed.  The current estate guardian, Mr. Gricar’s daughter, Lara, is correct in not spreading Mr. Gricar’s across the press or cyberspace.

            There should also be an explanation of the relationship between income and accumulating assets.  Joe, a hypothetical person, makes $100,000 per year, gross in 2002.  He has to pay taxes on that, probably at a rate, including state and local taxes about 25% in taxes.  He then has a net income of about $75,000 to spend.  He has to use some of that money to buy things.  Let’s say he buys, over the course of a year,  $15,000 in food, clothing, and rent.  Generally he will consume most of that; as a practical matter, he can’t resell them in 2003.  Let’s say he buys a car for $20,000.  That might be able to be resold in 2003 for $12,000; that $12,000 is one of his assets. 

Joe, in 2003 doesn’t have $75,000 to start the year; he spent $32,000 ($20,000 for the car and $15,000 on living expenses), so he has $43,000 in cash.  He still has the car, however, which he can sell for $12,000.  So, at the beginning of 2003, he $43,000 in cash, and a car worth $12,000; his assets are $55,000.  Some things, like a house, would increase in value.  Joe may put some of that $43,000 in a CD or a high interest bearing account, around $20,000 to $25,000 and maybe get 3.5% interest, that would added, after taxes, that would add $400-$500 to his assets for that year.  That is the basic explanation.

Now let’s look at Mr. Gricar’s personal history.  In 1996, two things happened, with financial implications, in Mr. Gricar’s life; the DA’s position went to full time, doubling his salary, and he got married to his second wife (I’ll call her #2, because she seems to dislike publicity). I found out recently that #2 did work, though perhaps making much less than he did.  Mr. Gricar’s nephew, Tony, indicated that he donated the balance between his old and new salary to a local battered women’s shelter, for the first year.  At some point, the Gricars purchased a home.

So, let’s look at 1997.  Mr. Gricar’s public salary was $105,678.  #2 was working too; I’ll be very conservative and say with her income and interest, the couple was grossing, before taxes, $115,000 (that is a hugely conservative estimate).  Taxes were, at that time, so their net income would be around $74,000.  Obviously, the Gricar’s had expenses, like the house, but that was either retaining or increasing in value.

Around 2000, the Gricar’s divorced.  I did some research and discovered that Pennsylvania “normally” splits marital assets in half, though there are a number of factors.

It is called “equitable distribution,” though I’d suspect most parties would call it “Hell.”  The rules for this distribution are complex, an vary from case to case, but this is a fair rule of thumb (and if you are planning to get a divorce, please call an attorney and don’t make calculations based on this blog).

The Gricar’s house was sold after the divorce for more than $100,000 so likely some part of that would be a marital asset. Maybe there was mortgage it was only counted as a $50,000 asset.  Assuming that the couple managed to say just 10% of their net income, for 4.5 years, and got 4% interest on that, they would have had more than $40,000 in savings (and I’d expect these numbers to be low).  I’d expect $90,000 in marital assets, minimum.  Maybe #2 had a really good attorney, and she got two thirds of it.  Ray Gricar walked away with some assets.

Those assets might include his car (his nephew posted that he did have a high powered one prior to the Mini).  I’ll be very conservative and estimate that he had only $15,000 left over in cash; I suspect a lot more.  My understanding is that no law enforcement agency initially looked at his assets before that divorce settlement.

In the early 2000’s Mr. Gricar was no longer married.  In 2003, taxes were lower (the Republicans were in) and Mr. Gricar’s salary was higher, $120, 225 per year.  He would be making around $85,000 after taxes.  We also know that Mr. Gricar had put some money away, and had in various accounts “more than $100,000 -- but not much more.”   If Mr. Gricar started with $15,000 and put away $20,000 per year (at 3.5% interest), he would have just over $115,000 in the bank (That may be more than “not much more.”).  Mr. Gricar was averaging between $80,000 and $90,000 per year; he put, on average, $20,000 in the bank.  So, where is the other $50-60,000 per year?

To be sure, Mr. Gricar helped with Ms. Fornicola’s, his girlfriend, household expenses, paying on her mortgage, and he bought the Mini, and put it in her name.  The price of a Mini at the time was around $20,000.  The mortgage could not have been huge.  He took trips; he went out to dinner.  None of that adds up to $50-$60,000 per year.  That is few thousand Grey Goose martinis a year.   That’s also about one new Mini Cooper every six months (and he couldn’t trade in the old ones; he’d have to put them in neutral and push them into Lake Raystown).

Okay, there are several realistic possibilities.  Mr. Gricar, the “fugal” individual, was heavily in debt from the 1990’s; considering the income he had from 1997 onward, that is very unlikely.  He invested the money; considering that the market was performing fairly strongly at that point (ah, the good old days), his assets grew.  That raises the question of if he could have access to those funds?  Could he have assets from his divorce settlement put away some place and which he could access?  Both are possible.

Mr. Gricar’s close friend, Assistant District Attorney Steve Sloane responded when told of the assets, “Wow. He should have had more money than that, I would think."  So would I. 

In looking at this, I have tried to be very conservative in my estimates; a generous estimate would be substantially higher.  The numbers do not add up and it appears that there should be many more assets out there.  Maybe there are; the information has not been released.  Tentatively, with what has been released, it does point to enough money to fund a voluntary departure, if not more. 

There are some other financial arrangements that do not point to Mr. Gricar’s voluntary departure; that will be covered in the next entry.

[Please do not use the second Mr. Gricar’s first name; it has not been disclosed in the Centre Daily Times and I respect her privacy.]

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