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Good idea, but this is old news

Monday, Sep 26, 2011

* The Chicago Tribune editorial board calls for a “Truth Commission” in the wake of the Tribune’s recent disclosures about how some Chicago labor leaders are able to collect city pensions based on their union salaries

At every turn, we the people are learning about insider deals and, yes, corruption. We realize that suggesting formation of an investigative panel risks a customary Illinois fate: Public officials here love to bury their problems in committees. But a group headed by, say, a former federal judge or prosecutor could unearth the many special deals that suffuse Illinois pension laws. A model here might be the so-called CLEAR Commission, which has been streamlining and updating the state’s criminal code. Its distinguished members have done good work while largely avoiding politics.

A Truth Commission, then, could cast light on these rampant abuses by pols and union leaders of rank-and-file workers and Illinois taxpayers. Then the rest of us taxpayers can apply whatever heat is necessary to enact significant reforms.

That’s not a bad idea. The General Assembly should go through pensions laws to weed out these egregious deals.

* And perhaps the Tribune or the proposed commission should start with a Sun-Times article published almost exactly two years ago which dug even deeper into Illinois’ past. The Sun-Times disclosed much of what the Tribune has been trumpeting for the past week as a major scoop. But it didn’t focus exclusively on union leaders, as the Tribune has. The Sun-Times actually went back to the beginning of the problem in 1957

A Chicago Sun-Times examination of the state’s 17 largest government retirement plans found more than five dozen retired government workers whose pensions are based not on their public salaries but, instead, on what they were paid by labor unions, lobbying groups and other non-governmental organizations.

The practice goes back to at least 1957, when Illinois legislators passed a law allowing employees of the Illinois Municipal League — a non-governmental agency that lobbies Illinois lawmakers on behalf of suburbs and cities — to be part of the state’s generous pension plan. Other laws expanded the practice. […]

* Kenneth Alderson gets a state pension of $175,479 based on his pay as executive director of the Illinois Municipal League. Alderson, a onetime state employee, spent 36 years with the lobby group. Before he retired in January 2008, the league gave Alderson several raises that helped him get one of the biggest pensions from the Illinois Municipal Retirement League, the state pension plan for local governments.

Alderson contributed $148,678 toward his state pension — he has already recovered all of the money he invested — while the Illinois Municipal League contributed $1.7 million toward his pension, according to Louis Kosiba, the retirement plan’s executive director. While Alderson gets to benefit from being in a government pension plan, his pension won’t cost taxpayers any money, Kosiba said.

Alderson’s retirement plan appears to be far different than the one given to the labor leaders in that it’s actually funded. But that 1957 law opened the door to pensions for people who don’t actually work for government. It’s important to see how this began.

Indeed, the Sun-Times did a whole series of stories, including editorials, on this topic two years ago, including a bunch of stories on these labor pensions. And now the Tribune is claiming the story as its own. Typical.

* Now, back to the editorial

In Springfield, House Republican Leader Tom Cross plans to push for a repeal of the 1991 law that allowed this particular abuse. Cross also says he will explore strengthening enforcement of provisions against fraudulently claiming eligibility for public pensions.

If Leader Cross is serious about real pension reform, he’ll combine that bill with his pension reform proposal

Msall is calling on lawmakers to rein in pension costs by limiting benefits for current employees. It’s an effort led by House Republican leader Tom Cross of Oswego that has been met with skepticism from some leading Democrats, including Quinn. […]

“We cannot afford not to do pension reform,” Cross spokeswoman Sara Wojcicki Jimenez said.

Cross’ plan would ensure that employees keep the benefits they’ve earned to date, but give them three choices: stay in the current system and pay more, move to a lower-benefit tier that went into effect this year for new hires or enter into a 401(k)-style system.

Attach the labor union reform to a big pension overhaul, and a whole lot of his recalcitrant Republican members will be put seriously on the spot. If they vote against the bill, they can be whacked for supporting this pension abuse.

- Posted by Rich Miller        

  1. - MCGone - Monday, Sep 26, 11 @ 7:11 am:

    I’m real old, but I dimly recall organizations dedicated to exposing fraud and waste. They were newspapers. Those things became communications empires and sucked up to the people they were supposed to investigate for tax breaks and such. Now they are like the advertising flyers they used to stick in your door.

  2. - Wilson Pickett - Monday, Sep 26, 11 @ 7:29 am:

    People used to look upon the newspapers in much the same way that they look upon federal prosecutors. Newspapers (and the media) were looked up to as “protectors”. Somehow, this favorable perception of the news media has slowly eroded. Maybe it is because of the devastating economic time period that the newspapers have found themselves in? Newspaper people never know if they have a job come tomorrow. They “gin” the news in order to create a sensational story so they can sell more newspapers and thus survive to see another day in business.. They are hesitant to ruffle incumbent politician’s feathers by reporting negatively on them for fear of being “shut-off” from breaking political stories that their rival competitor will be told about instead of them. It is a matter of survival and being able to feed your family rather than the free and unincumbered reporting of news. If a large advertiser in your newspaper has suddenly been discovered having made an unethical decision or act, as a reporter “do I dare report about it to the public and risk a further decrease in our newspaper’s advertising revenue stream? My newspaper doesn’t want to make one of our loyal advertisers mad at us. These reporters are good guys but they must face these all too human decisions. Investigative journalism became one of the first casualties in this economic downturn. That is my opinion. The smaller the newspaper, the more critical it is not to offend a local advertising or political information source.

  3. - Buerhle Fan - Monday, Sep 26, 11 @ 7:38 am:

    “Attach the labor union reform to a big pension overhaul, and a whole lot of his recalcitrant Republican members will be put seriously on the spot. If they vote against the bill, they can be whacked for supporting this pension abuse.”

    Same can be said for suburban Democrats.

  4. - Bill - Monday, Sep 26, 11 @ 7:42 am:

    No matter what hey pass now they can’t change the deal for current employees, union leaders or not. Its unconstitutional.

  5. - Anonymous - Monday, Sep 26, 11 @ 8:28 am:

    There are several non-state governmental organizations that are part of state retirement pension plans, all in statute, but I have no idea why the practice was/is allowed, much less codified.

  6. - CircularFiringSquad - Monday, Sep 26, 11 @ 8:54 am:

    Still wondering why Billboards did not knock out the union favors in the other government pension funds in the same chapter of the state law ….must have been in a hurry to get the press release out….probably come up with an amendment this week…yeah, that’s it an amendment…

  7. - MCgone - Monday, Sep 26, 11 @ 9:03 am:

    Ah Mr. Pickett (BTW love the Fa Fa song) you prove my point by being on this site and commenting. You can easily find insider sites which give you better and faster news than those things that mark up your fingers and build up on your doorstep to alert burglars.

  8. - Captain Illini - Monday, Sep 26, 11 @ 10:08 am:

    I agree with Bill…change the pension system all you want for new hires but you have to honor what is currently…then flush the system with an incentive to free up vacancies and the actuary will show healing over time to a point of solvency.

  9. - Anonymous - Monday, Sep 26, 11 @ 10:10 am:

    ” While Alderson gets to benefit from being in a government pension plan, his pension won’t cost taxpayers any money, Kosiba said.”

    Um, where did the municipal league get $1.7 million to contribute for Alderson’s pension? Don’t they get their money from local municipalities? I.e., taxpayers?

  10. - Robert - Monday, Sep 26, 11 @ 10:12 am:

    The headlines regarding egregiously high pensions for a couple dozen folks are putting the average union retiree in a bad light.

    Big pension overhaul + labor union reform sounds awfully difficult. Necessary, probably, but will take some time.

    Why not first simply pass a law that would (1) put a cap on an annual pension and (2) base pension on salary from state rather than salary from union leadership? Who would vote against this?

  11. - Michelle Flaherty - Monday, Sep 26, 11 @ 10:50 am:

    Robert, the 2009 pension changes did impose a maximum pensionable salary for public pension participants. Again, it’s for new hires to avoid the constitutional conflict.

  12. - wordslinger - Monday, Sep 26, 11 @ 10:50 am:

    Any chance that Cross might propose that suburban school districts actually kick in more than pennies for their employees’ pensions?

  13. - sal-says - Monday, Sep 26, 11 @ 11:03 am:

    It does occur to me that it looks a lot like some chargable corruption. If so, some jail time might start to deter some of this egregious stuff.

  14. - Regular Reader - Monday, Sep 26, 11 @ 11:51 am:

    I believe the GA is obligated to honor past promises. I may not be a fan of pensions, but when you make a promise you don’t break it.

    Fix the system in a way that honors your word to people. It’s a matter of the state’s integrity (or lack thereof).

  15. - Nearly Normal - Monday, Sep 26, 11 @ 12:15 pm:

    Wouldn’t the pension fund be IMRF Illinois Municipal Retirement Fund from which Alderson receives his pension?

    BTW, that fund does not receive state funds; therefore, a retiree of that fund can receive Social Security provided they paid into Social Security.

  16. - Indeedy - Monday, Sep 26, 11 @ 1:33 pm:

    Most every reading of the Illinois Constitution (Article 13, Section 5) seems to focus only on the obligations of the State not to “diminish or impair.” If membership in a pension system is a “contractual relationship,” doesn’t that mean that the members also have a reciprocal responsibility not to “diminish or impair?”

    I don’t know whether this reading holds water or not (I’m not a lawyer) and I certainly don’t suggest this alternate reading as a means for beating up hard-working people who have earned their modest pensions. But I wonder if it doesn’t address those egregious, outrageous instances where legislators and union leaders have helped each other side step the intent of the law to collect grotesquely inflated pensions. Is it that hard to argue that their acts diminish and impair the benefits for other members?

  17. - Quinn T. Sential - Monday, Sep 26, 11 @ 2:06 pm:

    {No matter what hey pass now they can’t change the deal for current employees, union leaders or not. Its unconstitutional.}

    The one day employment hand-shake may well be the next test case under the “honest serviices provision” for the 7th Circuit, and there appears to have been more than just the recipient that were in on the scheme.

  18. - Katiedid - Monday, Sep 26, 11 @ 4:46 pm:

    Nearly Normal - you are correct that IMRF members also participate in Social Security (virtually all of them do), but it’s not because they don’t receive state funds. Most state employees who participate in the State Employees Retirement system also participate in Social Security. On the other side, none of the other non-state systems, except IMRF, have Social Security (local police & fire, Chicago, Cook County, etc.).

Sorry, comments for this post are now closed.

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