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Labor's Pension Scam

In the wake of the Tribune's report last week about the backdoor pension deals of a select few union leaders, a faithful Beachwood reader sent me this note:

"I, as a union member and staffer at my Local, am shamed by the Trib expose of the last two days. (for the record I read those articles in the Library, because I would never give money to a filthy union-busting outfit like the Tribune.)

"But isn't an equally important story the fact that the deal for these pensions was put in place right when Daley was running for election and his brother John was the state senator who was pulling much of the weight for the bill downstate?

"And Daley had to have city agencies approve the deal. That was treated in barely two paragraphs in the story. But it is the basis for the whole thing. Why risk enhancing union leaders' pensions if not to secure there support and the support of their membership for political gain?

"And if no one can remember 15 years ago whose fingers are on the papyrus of the bill, how about the board members of the Municipal Benefit Fund. Didn't any of them have a comment on a state law that would cripple the financial status of the funds and conflict with the fiduciary responsibility of the board members? My father was a building engineer for the Bd. of Ed and paid into that fund his whole working life."

Indeed.

*

"As Chicago's 1991 municipal elections approached, Mayor Richard M. Daley was consolidating power for his first re-election campaign," the Tribune opined on Sunday. "In Springfield, two state senators - Daley's brother John and his political ally Jeremiah Joyce - introduced a 'shell bill,' an empty vessel into which lawmakers later would stuff an astonishing public pension giveaway to Chicago union officials.

"That pension giveaway was among more than 100 provisions eventually added to the shell bill, but never debated by either chamber of the General Assembly. Instead, 10 members of a bicameral 'conference committee' that evidently never held a meeting shaped the legislation to achieve their political goals. By the time the heavily larded bill was ready for passage by the two chambers, another Chicago Democrat, state Sen. Emil Jones, assured his colleagues that the bill wasn't controversial. 'These provisions incorporated within this bill have been agreed to by the (city) administration and the pension system and the laborers,' Jones told his Senate colleagues the day the bill passed in January 1991. 'The people in the city of Chicago came together and agreed.'

"That wasn't true. As with most Illinois sweetheart deals, only the insiders who would benefit from this looting of city pension funds 'came together and agreed.' Nobody consulted 'the people in the city' who, as taxpayers, would foot the exorbitant cost of this legislation for decades to come. Nor did anyone ask rank-and-file union members who someday would rely on city pension funds.

"Twenty years later, as the Tribune and WGN-TV reported last week, 23 retired union officials from Chicago stand to collect about $56 million from two ailing city pension funds, thanks to the 1991 law. More union officials evidently are in the pipeline to receive the lavish benefits included in that legislation.

"Sure enough, two days after the pension changes passed the Legislature - departing Gov. James Thompson signed it into law - the city's unions lined up to endorse Mayor Daley's re-election campaign. He would serve another 20 years with organized labor's support and acquiescence."

*

Of the 10 members of that phantom conference committee, only one still serves in the General Assembly: Senate President John Cullerton.

From the Tribune's original story:

"Cullerton, who declined to be interviewed for this story, denied being involved in the changes and issued a statement that acknowledged the law now looks like a bad idea.

"Municipal pensions should be for the hard-working municipal employees, who typically toil in obscurity, loyally contribute to the pension funds and aren't about to get rich off of their retirements," he said in a prepared statement. "Outliers such as those highlighted by the WGN and Tribune reports should be corrected in order to help restore the system's fiscal and public integrity."

Denied being involved in the changes? Was he on the conference committee or not? If not, why was he unwilling to answer a reporter's questions? If so, why was he unwilling to describe how he had no involvement in these changes? He's the president of the Illinois Senate. If you want to restore public integrity, sir, answer the damn question.

*

"At the time of the change, Cullerton was the House Democratic floor leader, which meant he served as field general for Speaker Michael Madigan, ensuring bills moved efficiently and jibed with the speaker's priorities," the Trib reports.

"Through a spokesman, Cullerton said he doesn't recall the bill and played no role in drafting the pension giveaway to union leaders."

But he's unwilling to say that himself. Illinois, sir, doesn't need "leaders" who hide behind spokesman. We've got enough of those.

*

"He also said the Legislature's process for passing pension laws is more transparent today than it was in 1991 and that he has directed staff to research the legislation identified by the Tribune and WGN-TV."

Knowing that tracks were covered and the Trib has already struck a dry hole on that account.

*

"In retrospect, one can see how, year after year, pension funds were used as credit cards by governors and lawmakers to prop up state spending rather than face tough action on either raising revenues, cutting services or both," he wrote.

Governors and lawmakers. But not me!

*

Cullerton and Daley are not the only weasels, of course. Naturally, Jim Thompson is the governor who signed the bill.

*

And then there's Barack Obama's self-proclaimed political mentor.

"These provisions incorporated within this bill have been agreed to by the (city) administration and the pension system and the laborers," Jones told his Senate colleagues the day the bill passed in January 1991. "The people in the city of Chicago came together and agreed."

"Jones, currently chairman of the Illinois Sports Facilities Authority, declined to be interviewed for this story."

None of your damn business!

*

"Joyce did not respond to interview requests, and John Daley said he doesn't remember the bill. 'I don't recall it at all,' Daley said."

Well, that's understandable. There were so many dirty bills, who can remember them all?

*

James McNally must.

"James McNally, vice president of the International Union of Operating Engineers Local 150 . . . receives nearly $115,000 a year even though at the time he retired, in 2008, he had not worked for the city in more than 13 years. He was only 51 when he started collecting a city pension. By the time he turns 78, he will have received roughly $4 million from the city laborers' fund."

Solidarity!

"McNally declined to be interviewed for this story but provided a written statement.

"'I had the option to continue making contributions to my (city) pension, which required me to personally pay both my share and the city's share. Making these payments required a very significant financial commitment from me and my family.'

"However, for six of the 13 years of union service applied to his city pension, McNally didn't have to make contributions for the city's share. Chicago got a pass on making contributions toward the laborers' pension fund between 2000 and 2006, and the same arrangement applied to McNally.

"That's one reason the pension fund is in such bad financial shape - and why city taxpayers and current city workers will end up covering a large chunk of McNally's pension."

Maybe that's why he refused to answer a reporter's questions.

*

And then there's Al.

"Liberato 'Al' Naimoli, president of the Cement Workers Union Local 76 . . . retired last year from a $15,000-a-year city job that he last held a quarter-century ago. Today, Naimoli receives more than $13,000 a month from the city laborers' pension fund even as he continues to earn nearly $300,000 annually as president of Local 76 . . .

"None of these pension deals could happen without the blessing of city government, which has granted lengthy leaves of absence to union officials. The average leave of absence for city employees who are on a leave to work for a union is nearly eight years. Roughly a third have been on leave for more than 12 years.

"No city worker has received a longer leave of absence than Naimoli, who retired last year at age 58 from a $15,000-a-year city job as a cement mixer even though he hadn't held that job in more than 25 years.

"Normally, city leaves of absence expire after a set period of time, and employees are required to renew the leaves or lose their jobs. Yet when the commissioner of the city's Department of Streets and Sanitation approved Naimoli's request for a leave in 1986, no expiration date was filled in."

Just a coincidence! Nobody recalls!

"That indefinite leave allowed Naimoli to receive a city pension that is paying him about $157,000 a year even as he collects a $292,000 salary from Local 76."

*

Capitol Fax impresario Rich Miller points out that the Sun-Times reported similar findings in a series two years ago. From that report:

"[Labor leader Dennis] Gannon defends his city pension deal.

"'I'm probably not the only labor guy taking advantage of that state law,'' Gannon said."

Which apparently makes it right.

*

McNally also spoke back then.

"I really don't know how I found out about this," McNally said. "I had to pay the city's portion, as well as my own portion. It was a financial hardship on me. I guess good things come to those who wait."

Or to those with connections to scurrilous political leaders.

*

From the Beachwood at the time of the Sun-Times series:

"I know I get a big pension," Dawn Clark Netsch says. "What am I supposed to do? Refuse it?''

Yes!

*

"I'm probably not the only labor guy taking advantage of that state law," says Chicago Federation of Labor chief Dennis Gannon.

And somehow that makes it okay that his taxpayer-funded pension is based on his private union job and not his stint as a steamroller operator for the city.

*

Values and principles mean nothing if you just mouth them instead of act in service to them. That inherently means sacrifice will be involved. So be it. It doesn't wash to sit back and say "Gee, somebody ought to change this rotten system that is rewarding me so nicely!"

Didn't someone recently say we should be the change we want to see?

*

"It's unfortunate that people focus on a pension rather than why kids in urban areas aren't receiving the education they should," said Reginald Weaver, a former Harvey high school teacher whose taxpayer-funded pension is based on his presidency of the private National Education Association.

Maybe one reason why kids in urban areas don't receive the education they should is that our spending priorities are so screwed up.

I can't help it if the system can be gamed to my financial advantage! What am I supposed to do?! I'm helpless!

-

Comments welcome.

-

1. From Michael O'Connor:

Thanks for using my rant to fuel your excellent review and comment of the pension abuses. A follow-up: After the Trib series was concluded, Rep Tom Cross, [Republican] minority leader of the Illinois Assembly, offered a bill to reform the scam outlined in the news. Not one of the usual suspects. Not the 20-year Speaker. But the opposition leader. No one who knows who is responsible for it could look in the mirror as say, "I can make this right." So even the shame of a multi-day news story arc is insufficient to penetrate the filmy layer of graft that covers them so fully.




Permalink

Posted on September 29, 2011


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