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* Kurt Erickson talks about Bruce Rauner’s attack on public employee pensions…
The ultra wealthy hedge fund manager who is running for the Republican nomination for governor wants to freeze state worker pensions at their current levels and switch everyone to a 401(k)-style retirement savings program.
This is ironic because Rauner became rich, in part, by investing and managing public pension funds, including the Illinois Teachers Retirement System.
While school teachers, prison guards, university employees and child welfare workers are staring at a revamped pension plan that will bite into their future earning power, Rauner is enjoying the fruits of his investments.
He reported earning over $100 million in the past three years alone. Reports indicate he has eight homes, including ranches out West, penthouses in New York and Chicago and a beach house in Florida.
Rauner’s handlers didn’t make him available to discuss the disconnect between Rauner’s riches and his position on ending pension plans for public servants.
But, Rauner’s campaign spokesman said Rauner’s investment firm GTCR delivered ample returns for the pension systems at a time when lawmakers and former governors were not sufficiently funding them.
“So on one side you had the politicians creating the problem and on the other you had GTCR and Bruce creating tremendous returns,” spokesman Mike Schrimpf said.
I suppose I can see the logic in that Schrimpf statement, but I’m not sure that it’s an easy argument to make, especially considering his great wealth.
I mean, $53 million a year is over a million dollars a week, which breaks down to over $200K a day for each work day. He’s making more in a day than most retirees will make in five, six or even more years.
And if you think pointing that out is “class warfare,” then what is Rauner doing?
Thoughts?
* By the way, Rauner disclosed another $100,000 in contributions this morning, including $25K from Contractors for Free Enterprise, which is the political arm of the anti-union Associated Builders & Contractors.
posted by Rich Miller
Monday, Dec 16, 13 @ 2:04 pm
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Most elitists try to disguise their contempt for the little folks, aka people who work for a living. Rauner doesn’t hide it.
Comment by Anonymous One Monday, Dec 16, 13 @ 2:18 pm
–“So on one side you had the politicians creating the problem and on the other you had GTCR and Bruce creating tremendous returns,” spokesman Mike Schrimpf said.–
LOL, you’re going to have to do a lot better than that, dude.
Tell us, Mike, how did Rauner get the opportunities to bestow the benevolence of his wisdom on pensioneers.
Any contact with the aforementioned politicians at, say, fundraisers? Phone conversations after writing decision-makers big checks?
If these politicians were causing so many problems, why was Rauner dropping millions of dollars on them?
As a guy who wants to run the state like a business, will Mr. Rauner tell us why state funds should be invested by private equity firms and hedgies who take 20% of earnings off the top, rather than just index funds that perform as well or better?
Comment by wordslinger Monday, Dec 16, 13 @ 2:26 pm
I think I’ll time how long it takes any of Mr. Rauner’s opponents to question whether $53 million in fees charged to the taxpayers for investing Illinois’ pension funds is a bit steep for one year. One just has to wonder…
Comment by Commonsense in Illinois Monday, Dec 16, 13 @ 2:27 pm
Rauner is the epitome of Affluenza. And if he wins the primary because the rest of the GOP couldn’t get their act together it would be a sin.
And once again we in Illinois will be forced into making a choice of two candidates who represent the lower 5 percent of qualified, capable, possible candidates.
And when Quinn beats him and stands up on the podium claiming a mandate we will once again have a Governor who has no clue that he got a gift and that the public has no confidence in him. He just won because he wasn’t Rauner. And Rauner won’t understand what Brady doesn’t get, that they couldn’t even beat Pat Quinn.
Comment by Irish Monday, Dec 16, 13 @ 2:31 pm
The optics for Rauner are not good. A wealthy pension fund manager runs a campaign on taking money away from the people whose pensions helped make him rich. Although, the optics of his entire campaign have not been good, it’s all been a little too cornball. Everything from the hammer to the Facebook ad with the chocking chicken.
Comment by Ahoy! Monday, Dec 16, 13 @ 2:32 pm
The bottom line;
You can’t make the idea of earning over $100 Million seem “not toxic” given how the monies were made (pension busienss for one), and how Rauner has used clout and influence along the way to earning $100 Million plus in three years (Payotn Prep, anyone?), and all the while railing on Pensions … and teachers … and unions … and all those tied together in the financial world.
It is what it is, but will it be known enough to have to “answer” for it?
That I don’t know.
Comment by Oswego Willy Monday, Dec 16, 13 @ 2:36 pm
Class warfare?
It’s been going on since Reagan. Raurner and his rich but selfish buddies are winning….big time!
He would make a good governor if you’re worried that any portion of your money would help anyone else but you and yours.
Comment by Buster Monday, Dec 16, 13 @ 2:37 pm
the problem I see is that a 401k retirment plan to have any real money behind it requres you to start early, in your 20’s, so that it builds up over a long time and reaches a critical mass.
If you take somone with 20 or 25years in at the state and ask them to start a 401k at age 50+ from zero, its not going to build up much before they retire.
To make this a meaningful retirment plan and not just a package of working poor, you should start it with new hires and not people who are too far along in promised plans to meaningfully swtich gears.
Comment by Ghost Monday, Dec 16, 13 @ 2:38 pm
That man’s humility is nonexistent. Just another example of someone biting the hand that fed them. Shocking I tell you!
He’ll be a perfect fit for Illinois politics.
Comment by redleg Monday, Dec 16, 13 @ 2:43 pm
Some interesting reasons given by the “courageous” Senator Duffy as to why he voted against the pension bill…
http://illinoisreview.typepad.com/illinoisreview/2013/12/ready-senator-dan-duffy-7-reasons-why-i-voted-against-the-pension-reform-bill.html
Comment by Under Influenced Monday, Dec 16, 13 @ 2:44 pm
Hopefully downstate Republicans will remember Rauner’s pension stance when the time comes to cast a ballot. For the rest of the Republican primary voters, remember this:
Rauner is a pro-abortion, Democrat-loving, RINO elitist insider who refused to oppose gay marriage.
Repeat as necessary.
Comment by 47th Ward Monday, Dec 16, 13 @ 2:48 pm
- 47th Ward -,
Some are trying … “we” promise.
Comment by Oswego Willy Monday, Dec 16, 13 @ 2:54 pm
=== And if you think pointing that out is “class warfare,” then what is Rauner doing? ===
You’re just calling it what it is, Rich. It’s class warfare.
http://www.washingtonpost.com/blogs/plum-line/post/theres-been-class-warfare-for-the-last-20-years-and-my-class-has-won/2011/03/03/gIQApaFbAL_blog.html
Comment by olddog Monday, Dec 16, 13 @ 2:56 pm
Rauner likes pensions when he makes money off them but doesn’t when they crimp spending by the Governor. It’s all about him.
Comment by Sir Reel Monday, Dec 16, 13 @ 2:57 pm
I’d be curious to know if “GTCR delivered ample returns”. Given the poor track record of hedge funds over the years, it wouldn’t surprise me if these “ample returns” were below what the state could have gotten in a balanced mutual fund.
Comment by Pelon Monday, Dec 16, 13 @ 2:57 pm
I love reading all the attacks on BR. If we all think the Republican Party of Illinois is so great and the three other candidates have done such a wonderful job of making Illinois the worst state in the union,and you are happy with that, then continue to vote for any of them. But if you want to try to get out from under the heavy burden that we are in maybe it is time to try something that is different, BR. What do we have to lose? I don’t see or hear any of the other three coming to the rescue of the state. They have all been in politics for decades and what have they done? If you want social issues to be the one issue you vote for then BR is not the guy for you, but if the financial burden that Illinois is under I think it is time to try something new. He has my vote.
Comment by Who Can Do Better Monday, Dec 16, 13 @ 3:02 pm
I wonder how much he would make off the conversion of pensions to 401k’s? Maybe there’s more to his stance than just pandering for votes.
“Rauner likes pensions when he makes money off them but doesn’t when they crimp spending by the Governor. It’s all about him.”
Comment by AFSCME Steward Monday, Dec 16, 13 @ 3:05 pm
Public employees can either get on board with the concept of shifting to a 401k style plan now, or wait 5 years until Madigan and Quinn decide not to fund pensions, overspend more, and do it anyway.
If you don’t believe that is going to happen, you have to have faith in the competence of the Republican party to take down Quinn and put Madigan in his place, or have faith in the honor and integrity of Quinn and Madigan to fund pensions. If you fit into either category, you should be fired because you are too ignorant to work for my tax dollar.
Comment by the Patriot Monday, Dec 16, 13 @ 3:07 pm
–They have all been in politics for decades and what have they done?–
Rauner has been bankrolling politicians to the tunes of millions for years. He’s not only part of the system, he is a major player.
Comment by wordslinger Monday, Dec 16, 13 @ 3:10 pm
- Who Can Do Better -,
If you feel “ethics” mean nothing, by all means, Bruce Rauner, and “Bruce Rauner” is perfect for you.
Those “problems” … Pensions for example… Rauner is a Billionaire or close to it off the Pensions he is trying to destroy.
Education? That Charter school that bears his name wasn’t good enough for his New Trier Daughter, no. Payton Prep, and using the clout of Democrats was needed to seal that deal, Big Time, and when residency is an issuem never fear, Bruce Rauner will by a Chicago Condo, to be all legal, and when its “time”, “Bruce Rauner” will change everything back to Winnetka, to keep everything all straight.
This was probably all discussed as Bruce Rauner vacationed with his Denied Daughter and Family with Rahm Emanuel and his family in Montana, while “Bruce Rauner” calls Rahm, “just a friend”, who became a Millionaire thanks to Bruce Rauner.
- Who Can Do Better -, if you are ethically corrupt, than “Bruce Rauner is perfect for you, even if Bruce Rauner is laughing at you, and all of us too.
Comment by Oswego Willy Monday, Dec 16, 13 @ 3:10 pm
Hasn’t it been shown on this blog time after time that a switch over to 401K plans for public employees would be a disaster, because who would then be contributing to the defined pension system for those who are already using it. So the State would be on the hook for contributing to two plans which would be more expensive than funding the defined pension plan as it should be funded.
And yet this keeps coming up.
Comment by Irish Monday, Dec 16, 13 @ 3:16 pm
OW, but he wears carhart jackets, that means he is just like us…..
Comment by Ghost Monday, Dec 16, 13 @ 3:17 pm
Maybe we should cut Rauner some slack. After all I am sure he just has a bad case of Affluenza. He has taken advantage of his position and power, not to mention other common people, so I am sure he just have no concept of how these changes to a pension promissed might impact lives. Sad thing middle class, commoners and underprivelaged, but he will be coming to eliminate your program next.
Comment by Primary Target Monday, Dec 16, 13 @ 3:25 pm
- Ghost -,
Funny thing about that Carhartt. Out here in Kendall County, Democrat, Republican, Rauner supporter or not… the last thing you want to be is the person passing off a brand spanking new Carhartt as a “work coat”.
The newer the Carhartt, the more mocking you can expect from others. When I got my Carhartt, I wore it around to get it all worked in before I took it out for a spin very publically… and “Bruce Rauner” can’t get his brand spanking new Carhartt on TV quick enough.
Not all that “shines” is gold.
Comment by Oswego Willy Monday, Dec 16, 13 @ 3:25 pm
If Rauner is able to generate generous returns for the public pension system in its current form, how does he argue with a straight face that the current system is inadequate?
I dont see any way you can resolve this hypocrisy for the voters: either the enormous profits that Rauner pocketed under the old system were justifiable, or the old system was broken and they weren’t.
Comment by Juvenal Monday, Dec 16, 13 @ 3:25 pm
== Thoughts? ==
Probably some I won’t post.
But.
Doing the math, Mr. Aw Shucks [ ’see my $18 Timex watch’ commercials ], who is currently running for IL governor, had a reported annual income of $53,000,000. If we leave him $13M to struggle by on, the $40M leftover would:
Buy about 27M (million) meals as priced under the SNAP program. So, those meals would feed about 78,000 people, each, for a full year.
Comment by sal-says Monday, Dec 16, 13 @ 3:31 pm
OW but I say Rauner has a beautiful new set of clothes…..
Comment by Ghost Monday, Dec 16, 13 @ 3:38 pm
If Rauner is able to generate generous returns for the public pension system in its current form, how does he argue with a straight face that the current system is inadequate?
Maybe hedgefund managers can charge higher fees for 401k plans than they can charge for state pension plans.
Comment by Ruby Monday, Dec 16, 13 @ 3:40 pm
Rauner made tons of money off of the very people that he would smash with his sledgehammer. He made millions or billions thanks to Illinois. The political environment was very, very good to Mr. Rauner and to every Illinois resident who became very wealthy. Unions never stood in their way of getting the American Dream. They enhanced it.
Comment by Grandson of Man Monday, Dec 16, 13 @ 3:40 pm
- Ghost -,
Then maybe the age-old question might be answered;
Can you have “new clothes, and also have “no clothes”, and still be Emperor, even with the Royal “We” in the verbage?
- Juvenal -
Very good point, however, I feal the other “3″ are so far behind this curve, making that great point you made might be lost in trying to play catch-up to something they have no clue as to how it runs.
Comment by Oswego Willy Monday, Dec 16, 13 @ 3:43 pm
Juvenal @ 3:25 pm:
“If Rauner is able to generate generous returns for the public pension system in its current form, how does he argue with a straight face that the current system is inadequate?”
Maybe hedgefund managers can charge higher fees for 401k plans than they can charge for state pension plans.
But we don’t need these people to manage our
403(b)accounts for us. We do OK on our own, even without the matching contributions most workers receive from their employers plus their Social Security benefits.
Comment by Ruby Monday, Dec 16, 13 @ 3:47 pm
==If Rauner is able to generate generous returns for the public pension system in its current form, how does he argue with a straight face that the current system is inadequate?==
And how does he argue with a straight face that individuals will do better at investing their own money through a 401k than he did in investing pension money? Can’t have it both ways.
Comment by Robert the Bruce Monday, Dec 16, 13 @ 4:04 pm
I see both sides I guess of this. This is the part that keeps making me double-take: “The ultra wealthy hedge fund manager who is running for the Republican nomination for governor wants to freeze state worker pensions at their current levels”
Rich wrote this column too. And I’m still: huh? As in, if your pension is $15,000 a year in 2013, it will be $15,000 a year in 2033?
Rauner is aware (he must be, he’s good with money) there is such a thing as inflation, and occasional massive inflationary periods in US history? And also that people are now sometimes retiring for 20 years or more?
That’s just mean.
Comment by ZC Monday, Dec 16, 13 @ 4:21 pm
401ks will work if you start with young workers, in their 20’s who make steady investments that add up. Yes. Unfortunately, when you’re in your 20s and making doo-doo income ( that is public salary) that barely covers your expenses, there’s not alot to contribute. Those who are earning competitive private incomes can watch their savings grow because they have enough to save! Different income populations. One size does not fit all retirement needs. The big trade off for not earning as much in the public sector was that you wouldn’t have to live in a cardboard box under a bridge in retirement. Then the switcheroo happened.
Comment by Anonymous One Monday, Dec 16, 13 @ 4:27 pm
Follow the money.
Comment by Anonymous Monday, Dec 16, 13 @ 4:30 pm
A couple things-just to be clear, Rauner made his money in private equity investments, not hedge funds. They are fundamentally different investment vehicles-if you don’t understand the difference, use the Google. The fees for a dollar of money earned to the investor are also a lot higher for hedge funds.
More importantly, it is a bit of a stretch to say that GTCR delivered outstanding returns. Schrimpf, the numbers I’ve seen for the GTCR funds the State in which the State invested (VI and VII) benchmarked against similar funds of the same vintage year would be at best “above median.” Please prove me wrong if I am.
Comment by Arthur Andersen Monday, Dec 16, 13 @ 4:39 pm
100% this, forever.
– MrJM
Comment by MrJM Monday, Dec 16, 13 @ 5:01 pm
Oswego Willy - Monday, Dec 16, 13 @ 3:25 pm:
The only time I expect Carhartt’s to look good is the first day I give a new coat to one of the grand kids.
Comment by RNUG Monday, Dec 16, 13 @ 6:02 pm
- RNUG -,
Amen.
But that new one looks great on Bruce. As far as a Prop goes, you can not go any better than an unworn, stiff, “shiny” Carhartt to look like you have been working.
Nicely said.
Comment by Oswego Willy Monday, Dec 16, 13 @ 6:06 pm
so now IL billionaire Eric Lefkofsky tosses in $50K. he joins Ken Griffin, Patrick Ryan, Joe Mansueto, William Wrigley Jr. on Rauner’s campaign list, and Sam Zell with the term limits super PAC. all Illinois billionaires.
some people consider a $50K annual salary a decent living. some write $50k checks on December 13 to a guy who made $53 million last year and considers $30-60K pensions for retired teachers and state workers who contributed over a 20-30 year career as frivolous spending.
he made some of his own millions managing those same pension funds for people he now says are overpaid and don’t ever deserve another cost of living increase ever again.
the citizens of IL realize our state’s finances are a mess. taxes have been raised to address the issue. now current pension reform.
but how someone can get up in the morning and look in the mirror and say I “earned” $110 million in the past 3 years but a teacher making a $30,000 pension doesn’t ever deserve a COLA increase EVER. heck they don’t even deserve a pension, right?
you don’t like unions and you don’t like pensions. we get it. you think union campaign contributions are a problem because they influence politicians? so your solution is to raise millions of dollars from Illinois billionaires to NOT influence yours?
if this is not class warfare i don’t know what else to call it.
that leaves CDW founder Krasny, the Pritzkers, David Grainger, Reyes Bros., Neil Bluhm, Ty Warner as the remaining IL billionaires to choose where to cut their big checks. the Pritzkers are Dems I guess so he won’t get theirs I guess.
Comment by PoolGuy Monday, Dec 16, 13 @ 6:57 pm
“He has my vote.”
Is there a second act in this sock puppet show?
Comment by Grandson of Man Monday, Dec 16, 13 @ 7:24 pm
Everyone is knocking BR, so who is the best candidate then. I would like to hear your opinions. It is in all our best interests.
Comment by Let's hear where your vote is going!!! Monday, Dec 16, 13 @ 7:40 pm
This thread is writing campaign advertising for Quinn. Isn’t this similar to how Blago got re-elected? If Topinka couldn’t beat Blago, Rauner surely can’t beat Quinn.
Comment by Soccertease Monday, Dec 16, 13 @ 7:51 pm
- Let’s hear where your vote is going!!! -,
Well, my vote is not going to a phony, who in one hand says one thing, and literally lives his life the complete opposite way he is portraying himself.
That part is always easy, finding out who you arew not voting for. The difficult part is finding who you are going to vote for in an election.
If you are voting for Bruce Rauner based on ethics in life, man, you better start reading up on Bruce.
Comment by Oswego Willy Monday, Dec 16, 13 @ 7:58 pm
OW,
Are you just a basher?
Anything positive about any candidates?
Just trash them all?
Comment by Your vote Monday, Dec 16, 13 @ 8:05 pm
- Your vote -,
Have I posted anything you would like to disagree with, make a case that I am wrong?
All 5 of these candidates and running mates are big kids. They all have loads of people to tell them how wonderfult they are, how smart, how savy, I choose to come at these guys with a grain of salt, and a light that might show the warts and all.
Comment by Oswego Willy Monday, Dec 16, 13 @ 8:09 pm
Willy, and you wonder why the Con$ulting Firm never gets paid..
Comment by Arthur Andersen Monday, Dec 16, 13 @ 8:41 pm
“Everyone is knocking BR”
Get off your cross, please. No politician is immune from criticism. Quinn is getting hammered right now by state workers and pension recipients who feel he sold them out.
“BR”
What’s with the multiple identities? How about picking just one user name, like BR.
Comment by Grandson of Man Monday, Dec 16, 13 @ 8:50 pm
I think Rauner would have been a great candidate for governor back in the day.
Back in the day before Gov. Lowden. Before Gov. Altgeld. Before Jane Addams. Before Teddy Roosevelt.
He and his buddies Griffin, Crown (BGA superstar), Gidwitz, Roeser, etc., are down on the system? The system that they’ve played like violins with their pay-to-play-schemes? The system that made them billionaires? It’s broken?
If it were me, I’d hit my knees and gaze to the heavens in thanks, every day, for that kind of system.
What’s remarkable is that these brilliant men of business and finance, who live better than all but a few who ever walked the Planet Earth, have such little imagination that the only solution they can conceive for this “broken system” that made them billionaires is to break contracts and rob a bunch of honest working stiffs out their retirements.
See you in church.
I’m Illinois born and raised. Born poor working class, but have advanced, through the sacrifices of my folks, a great public education system, and a lot of hard work, to half-assed white-collar middle class.
No resentments here. As such, I can’t find an honest reason for Rauner and crew’s play.
Because there isn’t one. They don’t care about state government functions. What’s it to them?
They’re not leaving Illinois. They want to stay in Illinois. That’s where they got rich.
Their whole play is to head off any consideration of a progressive personal income tax.
You think they want to pay the the 8.98% Iowa rate? The 7.65% Wisconsin rate? The state plus county Indiana income tax rates?
Rauner’s a big-enough ego tripper that he’ll carry the water with the big boys writing powerful checks. He loves the limelight and it shows.
But do you really think a guy who makes 200K a day loses sleep at night over pensions and state finances?
NO, he does not.
If you can’t spot the chump the first time the deal goes round, you’re it.
Comment by wordslinger Monday, Dec 16, 13 @ 9:33 pm
Sock puppets for Bruce
Comment by Anonymous Monday, Dec 16, 13 @ 10:31 pm
- AA -,
You should remember;
“Do not let OW talk to clients directly. Re-work OW’s analysis to be more ‘client friendly’ before Billing.”
There were a bunch of Memorandum on this.
Comment by Oswego Willy Tuesday, Dec 17, 13 @ 8:11 am