109 Comments - Transplant - Friday, Jul 26, 13 @ 9:30 am: Excellent column. - PublicServant - Friday, Jul 26, 13 @ 9:33 am: ===Fahner was asked during a previously ignored speech === Thanks for not ignoring it Rich. It’s a big deal. If you could, please print out the lawyerspeak that the plutocrats released instead of Ty appearing in front of the cameras to proclaim his “innocence”. This needs to be thoroughly investigated by the state, and the story needs to gain more traction in the media. It needs to hit the newscasts. - Stones - Friday, Jul 26, 13 @ 9:40 am: Excellent piece Rich! The matter involving Ty Fahner & members of the Civic Committee of the Commercial Club of Chicago is a case of “be careful what you wish for”. I don’t know if their influence actually caused the bond ratings to drop but simply speaking to representatives from S&P about doing so is like an athlete purposely tanking a ballgame so the team can get a better draft pick. He and others involved need to answer for themselves as far as I am concerned. - MrJM - Friday, Jul 26, 13 @ 9:41 am: The actions of Fahner & his Civic Committee remind me of those juvenile Marxists who endeavor to make workers’ conditions absolutely unbearable in order to spark the proletarian social revolution. Unfortunately, they only succeed in making things absolutely unbearable. – MrJM - AFSCME Steward - Friday, Jul 26, 13 @ 9:44 am: Ty & his gang aren’t the leaders they profess to be. A real leader would have advocated getting the interested parties to sit down, discuss the problem and work out a solution that is legal & takes into account the interests of all effected. This should have been happening quietly, without all the newspaper headlines, Tribune nonsense and blatant attempts to downgrade the state’s bond ratings. Because of Ty & his gang’s tactics, and their attempt to impose their will on all,people are alienated from each other. The people that need to work together to resolve the problem are avoiding each other. Only Cullerton finally reached out to AFSCME & attempted pass a compromise. Madigan, retaliating against Bayer refused to call the bill for vote. Now we have a legislative group, meeting privately, once again trying impose a solution on the people who serve the citizens of Illinois, without any input from those who will be most effected. Which begs the question, what were the real motives of the Civic Committee ? Was it to fix the pension mess, which has existed for many many years, or was there other motivation ? People that are seriously looking to sove a problem are flexible & willing to look at all angles & suggestions. It seems that Ty & his gang are only interested in millionaires, and the little people are just pawns used in bthe grand game to get richer & richer. The attempt to downgrade the bond ratings certainly looks fishy. Millinoaires have lots of money to invest. Bonds are a very popular investment. Driving down the bond ratings increases yield to investors. Hmmmmmmm!! - wordslinger - Friday, Jul 26, 13 @ 9:52 am: It’s such a nasty story. Alleged civic leaders looking to stick it to all citizens in order to really hose a subset of citizens — pensioneers. What’s particularly galling is that if you look at the Civic Committee membership many of them are the biggest hogs at the taxpayer trough. The hedgies sure like the pension funds when they take their 2% off the top on investments (or 8% if you’re Citadel). The multi-nationals have little skin in the game given Illinois corporate tax structure — plus they get handouts just for the asking. Utilities do swell under the Dome. The law firms aren’t complaining about the pinstripe patronage. And I don’t think the commercial banks are waiving their underwriting fees for Illinois bonds — or donating the interest to charity on the paper they hold. By the way, Illinois bond ratings held steady during the years pension contributions were shorted and spending increased without new revenues. Now, after increasing revenue, cutting spending, paying the full freight on pensions, whittling down old bills and making pension changes for new hires, you get whacked every few months. Those were all actions the rating agencies had been calling for. A lot of good it did. It’s a dishonest game. - walkinfool - Friday, Jul 26, 13 @ 9:56 am: Great analogy, Stones. - Snucka - Friday, Jul 26, 13 @ 9:58 am: The Sun-Times article is sickening. The fact that one earns a pension is irrelevant to whether that person should have another job. The article is presumptuous and disingenuous to say the least. For instance, what if his pension was $20,000 per year, and his new job paid $40,000? Would that be OK with the S-T? Should there be a board that decides when someone is making “too much” money from various public funds? The constant use of the phrase “taxpayer-subsidized pensions” also betrays the bias in the story. Obviously, public pensions are funded in part by taxpayers. Mr. Ward also paid into the pension fund and is now receiving the benefits to which he is legally entitled. You won’t see the Sun-Times mentioning that the schools, police, etc. are “taxpayer-funded” at every turn - only pensions. Just a terribly biased report. For the record, I favor pension reform and acknowledge that there will need to be major changes to the system. I’d even like to see 401k or other non-defined benefit options on the table. However, the current system is in place and this type of reporting does not help to improve it. - Meanderthal - Friday, Jul 26, 13 @ 9:59 am: Did the public employee unions ever meet with the bond rating agencies? - Phenomynous - Friday, Jul 26, 13 @ 9:59 am: I guess sometimes you have to spend money to save money. Let’s be honest, Fahner and Co. probably had little to do with the downgrade when we look at the grand scheme of things with respect to our unfinished liability and lack of pension reform.. If we are going to point fingers then I think we all know where they should be directed (hint: they make the laws). On a side note, Ward had a pretty sweet gig, pulling in a pension of $52,700 at the ripe age of 52, on top of a respectable salary with the Metra. A real “taxpayer”, that guy. If he lives for another 30 years he will pull well over $1.5 million from the Chicago Pension Fund (and I have no doubt in my mind that he contributed well over what he will receive in benefits). - Phenomynous - Friday, Jul 26, 13 @ 10:01 am: Unfinished = Unfunded Ilovesmartphones - langhorne - Friday, Jul 26, 13 @ 10:05 am: it would be interesting to know who the “guys” were who made the calls, or went there in person, in order to get a handle on their political pedigree. in other words, are these pure business and banker guys, or political transplants in their second or third careers? not that there is anything wrong with making a few mil making introductions and putting the right people together. SOP, and its an effective way to bolster a state pension. in all honesty, maybe i am just a little jealous no one offered me that parachute, so i have to stay focused on the loss of my free health care and annual adjustment. - Soccermom - Friday, Jul 26, 13 @ 10:07 am: I think that, if you are on a public payroll, you should not be receiving a public pension. If you’re on a pension and you accept a job at a state, county or municipal agency, or a tax-supported entity such as Metra, your pension payments should be put on hold. End of story. The pension programs were created to ensure that public employees had a decent retirement income — not a sweet layer of frosting over their second career incomes. - Soccermom - Friday, Jul 26, 13 @ 10:08 am: No hmmmmm about it. If they made calls to the rating agencies to tank the state’s credit ratings, and then they or their close associates bought bonds at an inflated interest rate, they should go to jail. Who is the new U.S. attorney again? - SupplySgt - Friday, Jul 26, 13 @ 10:11 am: Just saw this posted on FB. What gives Rich? Are communications between Quinn (or his people) and bonding agencies subject to FOIA? Post - The fat cat CEOs have now admitted that they worked to get Illinois’ bond rating lowered to pressure the legislature to cut public pensions. It gets better - - Rumors are now surfacing that the Governor and/or his top staff also encouraged bond rating agencies to “assist” them in pushing pension reform through the General Assembly by making public downgrade warnings at crucial times during the legislative process. . . . These developments make one wonder - how much of this “crisis” is real and how much of it is manufactured? - Cook County Commoner - Friday, Jul 26, 13 @ 10:13 am: Seems to me like the hogs are turning on each other as the swill trough shrinks. The Fahner imbroglio appears to be a bout in the plutocracy vs. pensionocracy division. Looks like a bottom of the card match. Those of us in the low end private sector pay through the nose just to sit in the cheap seats. - Leave a Light on George - Friday, Jul 26, 13 @ 10:15 am: How long before the fed’s take over the Metra ethics investigation? Any guesses? - Nieva - Friday, Jul 26, 13 @ 10:20 am: Drive the price down and the state pays more to investors. Did any of these people that were a part of this mess buy these bonds or advise clients to buy? - Yossarian Lives - Friday, Jul 26, 13 @ 10:21 am: Admittedly I’ve only been in Illinois a few years, but as far as I’m concerned this is your best column ever. Amen. Preach it, Rich. - Amalia - Friday, Jul 26, 13 @ 10:22 am: Rock on, Rich. great piece. - Skeeter - Friday, Jul 26, 13 @ 10:26 am: It looks like I’m missing this. Fahner and his friends said we are in bad shape and the rating should go down. Haven’t Rutherford and Topinka said that if we continue to the current path the rating will go down? Dan Rutherford has said “we are on the verge of financial disaster.” I’m just not seeing a huge difference here. - Ready To Get Out - Friday, Jul 26, 13 @ 10:34 am: Skeeter….are you serious? Or not paying attention? Fahner and friends “called” the ratings agencies. Rutherford and Topinka simply made comments. - Private Citizen - Friday, Jul 26, 13 @ 10:35 am: To Meanderthal @ 9:59 am: The unions do not have any influence over bond rating companies, as they dont issue any bonds, and they dont hire those agencies. When our state government issues bonds, they hire and PAY rating companies to rate their bonds. They expect a fair assessment of their condition and risk. Big corporations also hire and pay rating agencies to rate their own bond issues. They are free to “talk up” their own bonds, to lobby for a higher rating to reduce their interest payments. The issue here is that if what Fahner said about the lobbying the CC gang did is true, given the fact that the Civics are the biggest clients of the rating agencies, they do indeed have a great amount of influence. If you believe, as I do, that both union and corporate campaign donations do influence politicians, then you should also realize the main issue in this story, regardless of whether you support big business billionaires or the middle class pensioners. - Carlos Danger - Friday, Jul 26, 13 @ 10:37 am: Amazing Fahner was once the state’s chief law enforcement officer. Although never elected as I recall. Appointed by Thompson then lost in first election to Hartigan. - Yossarian Lives - Friday, Jul 26, 13 @ 10:37 am: Skeeter - There’s a big difference between “will” and “should.” Fahner and friends attempted to influence the credit rating - not by making public comments, but by contacting the agencies directly, out of the public view, and apparently attempting to use their clout in the business and investment community to persuade those agencies to take action adverse to the state (and people) of Illinois. What we don’t know is whether their overtures made a difference or whether the downgrades would have happened anyway. But the fact that they tried to use their influence in this way is disgusting and just plain wrong. - KurtInSpringfield - Friday, Jul 26, 13 @ 10:44 am: Skeeter, Fahner and the CC members did not just publicly say Illinois ratings should go down. They called the Ratings agencies and pressured them to lower ratings. Lower ratings = higher interest rates. If they financially benefited from their own collusion whether or not that was their intention, those actions could be criminal and should be investigated to determine whether any crime(s) actually did occur. - Skeeter - Friday, Jul 26, 13 @ 10:48 am: So only properly elected officials can make comments that would cause our credit rating to go down? OK, glad we’ve got that cleared up. I wonder what would have more influence? The Treasure of the State of Illinois saying “we are headed for disaster” or some rich guys saying something like “we are headed for disaster.” I would tend to think that official word from the State Treasurer, but I’m not in the bond business so I can’t say for sure. - 47th Ward - Friday, Jul 26, 13 @ 10:48 am: As Daffy Duck would say, “Dethpicable.” - Original Rambler - Friday, Jul 26, 13 @ 10:52 am: Soccermom points out a lurking economic issue I would like a candidate take a stand on. Government pensioners taking a post-pension position (say that 3x fast) at another government entity. Their double-dipping costs someone a full-time job. I don’t care if they supplement their income, but do it in the private sector or on contract. There are more of these out there than you’d think. Also, with this revelation, how PQ reacts will be very telling. - JC - Friday, Jul 26, 13 @ 10:52 am: When Rich describes the biggest of the big guys (civic committee) what is really meant is the richest of the rich which translates into power. These people are deeply concerned and invested in the business of making sure the folks who average a pension of 40K don’t get that? That’s way too much? Multimillionaires wanting to keep little people from getting what they live on in retirement? Trying to take away access to paid for health plan? I know the Metra scandal, receiving 2 pensions plus another income is questionable ( as asked in a previous post–would it be questionable if pensions were much smaller?) and maybe that practice of double dipping needs some looking into, but really $110,000 is of major concern to those making millions? Perhaps they should give up their earnings over $110,000 and try to live on that in Chicago/suburbs. - Montrose - Friday, Jul 26, 13 @ 10:57 am: *So only properly elected officials can make comments that would cause our credit rating to go down?* Are you purposely ignoring the difference or do you really not see it? - Vitaman - Friday, Jul 26, 13 @ 10:59 am: - Soccermom - Friday, Jul 26, 13 @ 10:07 am: I think that, if you are on a public payroll, you should not be receiving a public pension. If you’re on a pension and you accept a job at a state, county or municipal agency, or a tax-supported entity such as Metra, your pension payments should be put on hold. End of story. The pension programs were created to ensure that public employees had a decent retirement income — not a sweet layer of frosting over their second career incomes. Most Illinois public pensions are coordinated. Tax supported agencies like almost any company that sells to the government? Almost every company sells something to the government, even Walmart. Also unconstitutional in Illinois to deny pension benefits. I have a public pension. I work for a non-profit that gets 90% of its funding from government at all levels. Are you suggesting I should give up what I choose to do on my own time? - Soccermom - Friday, Jul 26, 13 @ 11:00 am: “Now, after increasing revenue, cutting spending, paying the full freight on pensions, whittling down old bills and making pension changes for new hires, you get whacked every few months. “Those were all actions the rating agencies had been calling for. A lot of good it did. It’s a dishonest game.” This is absolutely right. The folks at the rating agencies aren’t stupid — they have figured out a way to make money for the investors without increasing their risk. But I will never understand why we genuflect before them. Call them out. I want to know the names of the people that Fahner called. I have a right to know, because I as a taxpayer am shelling out more (or more properly, getting less from the state) because of his selfish and heedless action. - Oswego Willy - Friday, Jul 26, 13 @ 11:01 am: First, Great column, Rich. Second, There is a difference when an elected offical speculates what may/may not happen, or what road they see the state heading… versus … Very direct discussion with business leaders, some CEOs, who can pick up the phone, unlike normal people, and ASK that consideration be taken to lower rating, and then actually …brag(?)… about discussions with bond ratings groups and what was the result, giving the impression that influence was at least implied. When Rutherford or Topinka come out and say they called Moody or S&P and asked about the rating and why its so high, and then brag(?) that the discussion may have led to a lowering of the bond rating, then you ahve my attention. Two totally different animals, Ty and Co., and Rutherford and Topinka, and them all speaking on the issue. - Name Withheld - Friday, Jul 26, 13 @ 11:05 am: I don’t believe either the Treasurer or the Comptroller actually called the ratings agencies and told them to lower our rating, Skeeter. To me - that’s a big difference. It’s like the difference between your mom telling you that you need to slow down or you’re going to get in a car accident; and your insurance agent calling your insurance company and telling them they are enabling your bad driving by giving you low rates. The agent gets his commission based on how much you pay. How many of us would like our car insurance based on what someone else said instead of our driving record? - Name Withheld - Friday, Jul 26, 13 @ 11:07 am: Or - what OW said. - Skeeter - Friday, Jul 26, 13 @ 11:10 am: Come on Name. You really think that public statements to media by the Treasurer of the State of Illinois are not going to relayed to the agencies? It is not like he made an offhand comment while playing a round of golf. Moreover, even if he had, he is still the Treasurer of the state. When he comments about certain things — even during a round of golf — they matter. And let’s put aside whether Fahner or his friends had actual holdings that would benefit. That’s speculation at this point. None of us know. Instead, focus simply on the comments and who made the comments. Again, a few rich guys, or the Treasurer? Sure seems like the Treasurer’s comments who be far more influential. - Rich Miller - Friday, Jul 26, 13 @ 11:11 am: Skeeter, the difference is the treasurer threatened to go to the agencies if the state borrowed to pay old bills. Fahner did go to the agencies. - wordslinger - Friday, Jul 26, 13 @ 11:12 am: It should be noted that Ty Fahner is a partner at Mayer Brown. Just last month, Mayer Brown billed the State of Illinois $242,600 for serving as bond counsel on a $1.3B GO issue and a $604M Build Illinois issue. Anyone have a problem with that? If it makes you feel better, the rating agencies billed the state $462,450 for the two issues. http://www.state.il.us/budget/disclosures.asp Scroll all the way to the bottom and click “cost of issuance” for the two June 2013 issues. I didn’t have the stomach to look at any others. - Earl Shumaker - Friday, Jul 26, 13 @ 11:13 am: It sound like the SEC should investigate to see if there were any laws and regulations broken. I would also suggest that this is something the Attorney General should look into, but only if that office can provide an unbiased opinion - Oswego Willy - Friday, Jul 26, 13 @ 11:16 am: When the Treasurer or the Comptroller of the state of Illinois give the same quote(s) Ty gave, then you have the attention of quite a few people. Funny thing about private conversations between rich people and manipulating costs or prices or ratings… when they change and it turns out a few were privy to the thought of the change, the Feds think that is worse than an elected official “commenting” on the “fiscal status of the state” Frozen Orange Juice, Anacott Steel, Blestar Airlines …lol Wealthy leaders manipulating, through discussions that normal people can’t have with bonding agents is far worse, otherwise the SEC would have a very skinny rule book or laws they need to follow… - bobby dylan - Friday, Jul 26, 13 @ 11:21 am: The rating agencies have a history of following the suggestions of money people instead of actually reviewing the products and issuing ratings based on facts. That is what should be investigated and by an authority distanced from Illinois. Its tentacles should obviously reach here but lets get some unrelated investigators. (Unrelated - what a concept!) - Skeeter - Friday, Jul 26, 13 @ 11:22 am: Rich, you talk about “going to the agencies.” Again, I’ve never done bond work. But I would suspect that the agencies would look to see what people — including the Treasurer — are saying. If I was putting a rating on a bond, whether the Treasurer believes the financial condition is sound would seem to matter greatly. I may be wrong, but it sure seems that the rating agencies knew, or at the very least should have known, about Rutherford’s comments. And it seems they would carry far more weight than the comments of some rich guys. Again, this all puts aside any personal financial motive for these guys making the comments. If they did, that’s a different matter completely. Bottom line is that we seem to be jumping on Fahner for something that was not nearly as serious relative the rating as were the words of Rutherford. - Norseman - Friday, Jul 26, 13 @ 11:26 am: 1st - Another great column by Rich. 2nd - I don’t need to add anything to the underlying Fahner tanks IL story. Folks like Word and Willy have adequately addressed it. 3rd, I want to add a special thanks to the following from Rich’s article: === Well, the state’s bond ratings have been falling even though Illinois approved the same sort of pension reform three years ago that won California plaudits last year and a bond upgrade this year. === You never hear this fact referenced by others. Rich is the only one reporter willing to remind folks that Illinois has done things to address the issue. *** Oswego Willy for Governor, the only real alternative! *** - Michelle Flaherty - Friday, Jul 26, 13 @ 11:26 am: I’m with soccermom. Wanna reduce unemployment? Bar people from collecting a govt pension and govt paycheck. There are some places — Springfield — where unemployment would be eradicated overnight. You’d have to import people to fill the vacancies. If you liked working so much, you shouldn’t have retired. Otherwise there are others who could use the job. - Amalia - Friday, Jul 26, 13 @ 11:31 am: @Original Rambler, good thought on pension position. here’s what I wish for…. a guide to each and every elected position in the State of Illinois (I know thats lots, what with this being the home of the most election jurisdictions in the known universe) and what the benefits are, whether an elected may have a pension from one agency that attaches to the elected position (I’m talking to you, Maine Township), and the costs paid for health care for the elected official. there’s lots of money going out for people who make one or two meetings a month, if that. get an intern going, BGA! - dupage dan - Friday, Jul 26, 13 @ 11:35 am: Haven’t seen this issue addressed in a significant way anywhere else. Thanks, Rich. - Oswego Willy - Friday, Jul 26, 13 @ 11:36 am: Yikes! - Norseman -, I, personally, am the reason “anobody” is NOT better than Pat Quinn! lol To the Post, On the double-dip pension/job issues, if the City/County/State/Teachers can get together and produce a Bill that can pass the General Assembly, that will have a manner to regulate the double-dip pensioners while allowing a Chief of Police teach at a State University criminal justice courses after 25 years on the streets, and that new Professor is too young to play golf or garden for 20 years, than I am 100% for it. Would be a great issue to campaign on, if … you can literally have how it would all work, with examples to show how it works … and not just, “Golly I am against all this double-pension nonsense”. That candidate would have more than everyone attention on the issue, and in fact, might corner the issue that resonates with the voters …but I digress… - Soccermom - Friday, Jul 26, 13 @ 11:37 am: “When our state government issues bonds, they hire and PAY rating companies to rate their bonds. They expect a fair assessment of their condition and risk. “Big corporations also hire and pay rating agencies to rate their own bond issues. They are free to “talk up” their own bonds, to lobby for a higher rating to reduce their interest payments. “The issue here is that if what Fahner said about the lobbying the CC gang did is true, given the fact that the Civics are the biggest clients of the rating agencies, they do indeed have a great amount of influence.” This is an excellent point. - Soccermom - Friday, Jul 26, 13 @ 11:42 am: Vitaman — if you’re working for a non-profit and your pension is making it possible for you to do good work that you otherwise would not be able to afford to do, then God love you. That’s a great reason to have the pension system we have — to make it possible for well-trained, public-spirited people to take on second careers that otherwise would not make financial sense. I am talking about those state, county and municipal entities that OFFER pension plans (such as METRA, I believe.) If you’re on a public pension, you don’t get to accept a salary or employment contract from another public entity. Look - my mom retired as a public school teacher, then went over to a Lutheran school and put in another 20-plus years. That’s a win-win for everybody, as far as I’m concerned. The public schools got their 30 years, she got a modest pension, and those kids in the parochial school got a well-trained teacher at a bargain price. I’m merely saying — one check directly from a tax-supported government entity is enough. - Oswego Willy - Friday, Jul 26, 13 @ 11:51 am: ===Bottom line is that we seem to be jumping on Fahner for something that was not nearly as serious relative the rating as were the words of Rutherford.=== That has some merit in the discussion, but for Ty to come out and say, discussion held led to the direct dropping of the ratings, implying influence was indeed put on the agencies by having those discussions … Ty was bragging(?) about than influence and the result ..big red flag versus the Treasurer and the Comptroller just speaking on the issue and then the ratings drop … Fair? - taxpayer - Friday, Jul 26, 13 @ 11:52 am: Should someone who has a pension from a public company not be able to receive his pension if he is working for another private company? Should someone who is receiving SS not be able to receive SS if he is working? - Skeeter - Friday, Jul 26, 13 @ 11:56 am: Oswego Willy, that’s mostly fair. And Wordslinger’s comments about possible financial incentives are also important (and to me seem to be the biggest potential story here). I would add that I think the Treasurer and Comptroller should be more cautious about their statements. I’m not hear to defend the actions of Fahner. I’m just trying to put their impact on the rating in some context. - wordslinger - Friday, Jul 26, 13 @ 12:00 pm: Skeeter, as an attorney, what are the ethics of a law firm partner trying to increase the cost of the state’s bonds when his firm is cashing six-figure checks to serve as the state’s bond counsel? - few - Friday, Jul 26, 13 @ 12:04 pm: Let’s keep the comments on the article. As a taxpayer I am angry I overpaid more taxes because of the Civic Club’s actions.Perhaps what is more important is that money was diverted from schools, social agencies, etc. that experienced cuts that would not have otherwise happened. I’m not sure what actions need to be taken, as I think the Civic Committee members are laying low and are quite embar. But perhaps a lawsuit is in order by taxpayers. Then perhaps there would be enough information gathered through the process to determine if there was more going on than uncivic activities. - RNUG - Friday, Jul 26, 13 @ 12:04 pm: OW, Language exists to do most of what you propose re barring double-dipping. There are about 11,000 of us, the 2002 ERI group, that are legally barred from taking a paid State position and keeping our pension at the same time. In addition, that same group is barred from directly contracting with the State to provide services. Depending on the circumstances, we would have to repay to the pension system all the pension monies we had already received since 2002. In addition, any state agency found trying to hire a 2002 ERI retiree under contract is supposed to lose the funding they are trying to expend for that hiring. A lot of the procurement people don’t understand that funding restriction; I’ve had to explain it to a number of contracts people who wanted to hire me. There is only one direct way I know around the 2002 ERI restrictions of being a direct state employee: get elected to state-wide office; that doesn’t count against you. The other way to kind of hold a job under a state contract is to work for a body shop firm that has a contract with the state. We are not barred from municipal, county or federal jobs because those are non-state pension positions. You probably couldn’t legally do so. And, obviously, we are free to pursue private employment. - Skeeter - Friday, Jul 26, 13 @ 12:04 pm: Wordslinger, I’ve never handled that kind of case. That being said, I think you point to the real story here. If Fahner just made some comments I would view it as just another guy trying to swing his weigh around. Welcome to the world. But personal financial benefit and potentially manipulating things for personal gain? That seems like a major problem for him. - Arthur Andersen - Friday, Jul 26, 13 @ 12:05 pm: Rich, great column. Willy, good thought. Of course, any “Bill” should not restrict con$ulting contracts to non-government agencies. As an aside and in re: Willy’s retired professor example, I believe I read recently that there are either 900-some UI retirees or total SURS retirees who have returned to work of any kind at another SURS employer. (Someone please correct me if I’ve badgered up this data.) That is not inconsistent with past data reported for teachers, or around 1-2% of retirees. Seems to me, and I could be way off, that the anectodal information about lots and lots of double-dippers is not backed up by fact unless the SERS experience is much higher. - Oswego Willy - Friday, Jul 26, 13 @ 12:08 pm: - Skeeter -, Keep in mind I said it had merit in the discussion, I still feel a Rutherford or a Topinka commenting on the state of the state of Illinois versus this discussion of what Ty and Co. claim they did is very much “Apples to Oranges”. Can a state Treasurer make a comment and the rating rise or drop? Possible. Can the story Ty bragged(?) about, leading to a drop in the ratings that Ty clainmed was allegedly influenced by those private discussions be seen as far more severe than comments made publically by any state elected official. Yes. We can have the discussion on elected officals comments, but Ty took commenting to a much more direct level, and allegedly claiming influence directly from those discussions. That is the key. I appreciate the feedback. - Skeeter - Friday, Jul 26, 13 @ 12:09 pm: One more note on this — I’ve made comments today about Rutherford because my memory and a quick Google search revealed the comments. I seem to recall JBT making similar comments about the state of the state, but I was not able to find them in a quick search. But I seem to recall shaking my head when reading her comments and wondering why she thought such comments were necessary. It seems that those two could have handled it differently. - Norseman - Friday, Jul 26, 13 @ 12:09 pm: I can and will address my opposition to Rutherford’s action by withholding my vote from him. Rich’s column is probably the extent of the repercussions against Fahner and his rich buds for their efforts. *** Oswego Willy for Governor, the only real alternative! *** - RNUG - Friday, Jul 26, 13 @ 12:10 pm: Should have noted that was about 11,000 SERS 2002 ERI retirees - hisgirlfriday - Friday, Jul 26, 13 @ 12:17 pm: @Skeeter - I was not happy with Rutherfords conduct re: ratings agencies either but the great thing about him being a public official who said his piece publicly I am able to hold him accountable as a taxpayer when I vote. But when Fahner and his ilk badmouth the state in secret as unelected civic committee members and cost me money as an Illinois taxpayer I have no way to hold them accountable. I also think you are very mistaken thinking the ratings agencies value the public input of politicians more than the secret persuasion of the financial class.At least that’s my impression of the ratings agencies after reading “The Big Short.” @Wordslinger - Excellent find on the Mayer Brown connection. Also notice that Civic Committees vice chairman is frederick waddell, chairman and ceo of northern trust which pulled down a quarter mill as underwriter. The conflicts of interest are staggering. - Pacman - Friday, Jul 26, 13 @ 12:18 pm: word, at the very least the IG’s office should investigate the apparent conflict of interest/ethics violation - Shark Cyclone - Friday, Jul 26, 13 @ 12:19 pm: Had to put some new, smart creases in my tin foil hat, but I think the question of ‘which is worse, Fahner and co talking down the rating , or Topinka/Rutherford?’ … makes me wonder if they were all working on the same campaign? Did Fahner/CC put in similar calls/meetings with them? - Willie Stark - Friday, Jul 26, 13 @ 12:26 pm: When are the Trib and Crain’s going to report on these developments and further the story? Surely their readers deserve to know so they can be the informed citizens upon which our democracy depends. I mean, thanks to the Trib’s crack work we know that Robert Plant got “an assortment of hot sandwiches, no-fat yogurt, a tray of fresh vegetables with dip and tuna fish salad — ‘light on the mayo please’”as part of his contract for performing at Taste. Keep going, Tribbies! Bruce, sharpen your editorial quill, my man. - qwerty - Friday, Jul 26, 13 @ 12:29 pm: At a minimum, perhaps the press and legislators can stop the unwarranted but oft-repeated assertion that the Civic Committee is a neutral “watchdog” group. They are nothing but a lobby group so stop genuflecting. - Beaks - Friday, Jul 26, 13 @ 12:31 pm: Great points about the Mayer brown issue, how about loyalty to the client. Also, how many legislators/judges/elected’s would be banned from office under the take a pension no govt work rule, my bet is over a 1000. - mythoughtis - Friday, Jul 26, 13 @ 12:32 pm: –I’m merely saying — one check directly from a tax-supported government entity is enough. – I agree but only if we are talking about getting a pension from a specific goverment entity and then going back to work for the same entity. I believe that is pretty much aleady the way it works. If you retire from the state and then go back to work for the state, then your pension is suspended. But, what would working for METRA have to do with collecting a pension from an entity supported from a differing group of taxpayers? Taxes paid to the first entity have nothing to do with taxes paid to the second. Did this man do what he needed to do at his first job to earn the pension? If so, then he is entitled to his pension… regardless of what he chooses to do to earn extra money. Does he now do the work he is supposed to do to earn his present salary at Metra? Then, he should be paid his salary. As to his taking someone else’s job… how does his pension at his first job have anything to do with the fact the he got hired and someone else didn’t? However, Madigan should stay out of his work life at Metra. I don’t see Madigan lobbying the executive branch of the goverment to get individual state emplovees overdue raises. - mythoughtis - Friday, Jul 26, 13 @ 12:35 pm: Because I do know how to spell: I don’t see Madigan lobbying the executive branch of the government to get individual state employees overdue raises. - Quiet Sage - Friday, Jul 26, 13 @ 12:44 pm: Surely the prospects for SB 1 or similar legislation are now much reduced. - Yossarian Lives - Friday, Jul 26, 13 @ 12:46 pm: What Ms. Flaherty said. - Grandson of Man - Friday, Jul 26, 13 @ 1:10 pm: This is another excellent column, and I’m sorry it wasn’t in the paper edition of the Times (I still like the feeling of a newspaper in my hand with my morning coffee). What I find repugnant is that the Civic Committee and Trib keep screaming about an upcoming financial doomsday brought about by certain people while they themselves are trying to hasten its arrival. - Arthur Andersen - Friday, Jul 26, 13 @ 1:22 pm: Hisgirlfriday noted: “Frederick Waddell the chairman/CEO of Northern Trust is vice chair of the Civic Committee” Is this the same Frederick Waddell that the Tribbies caught a few years ago on the arm of Chris Kelly at one of Blago’s $25,000 “dinner opportunities?” Is this the same Northern Trust that harvests millions of dollars in fees from those awful State Pension Funds? However else one sees the legalities of the Civic Committee and all the “hats” they wear, can we all agree their hypocracy is stupendous? - Joan P. - Friday, Jul 26, 13 @ 1:35 pm: “Wanna reduce unemployment? Bar people from collecting a govt pension and govt paycheck. ” Logically, then, anyone collecting any pension should be barred from collecting any paycheck. If I collect a government pension and hold a job in the private sector, I’m still depriving someone else of that job. - Skeeter - Friday, Jul 26, 13 @ 1:43 pm: With all this talk about who can take both a job and a pension, and I’m wondering why we pass out pensions like that to people who are pretty young. - Michelle Flaherty - Friday, Jul 26, 13 @ 1:43 pm: I’m OK with that expansion if you are. In my book retirees should be retired and workers should work. - mythoughtis - Friday, Jul 26, 13 @ 1:53 pm: –I’m OK with that expansion if you are. In my book retirees should be retired and workers should work. – There is no requirement in any pension, public or private, that says you have to be senile, disabled, or just want to sit in a rocking chair to collect a pension. A pension is compensation paid to someone after they leave a job in return for staying for an agreed upon number of years or until they have reached a certain age. Disability is the agreement to pay someone when they are unable to continue to work. By your logic, anyone who collects any money after retirement is somehow cheating their former employer of their services or is somehow taking someone elses job. So, lets forbid ’soccermoms’ Mom from working at that Lutheran school when she collects a pension, lets forbid someone working for or even volunteering at a non-profit (because volunteers are taking positions that would otherwise have to be staffed with paid employees). Lets forbid anyone from writing a book or cleaning houses after they quit their full time job. Lets forbid anyone from working two or three jobs to support themselves beause they are depriving two other people from working. This is a country where we applaud people who support themselves or who want to just have something to do in their golden years, not hold them back because they are taking some hypothetical persons job. - Oswego Willy - Friday, Jul 26, 13 @ 2:01 pm: I used the example of the retired cop teaching at a University becuase I had an instructor who did just that; Started as a cop at 25, after 25 years, was Deputy Chief, was not going to move up, didn’t want to relocate, but took classes to get Masters and doctorate. So, at 50, with 25 years law inforcement, with a doctorate, why not be a professor and teach the likes of the snot-nosed kids like me at the time, and put in 15-20 years, and teach with significant work experience to boot? That is ONE isolated example, but if there is a way to make that type of situation work, and make the pension process work, and reward this instructor for 40-45 work years in two public arenas, and serving them both well, someone find me that solution, because instructors like those are difficult to find. There are abuses. There are those like my instructor. Got to find a solution, bottom line. - Michelle Flaherty - Friday, Jul 26, 13 @ 2:02 pm: Perhaps in retirement you could work on getting a sense of humor. - Now - Friday, Jul 26, 13 @ 2:02 pm: Let’s see. The Gov., the Treasurer, the Comptoller, various Legislators, the Tribune & the Sun-Times editorials, all predicted downgrades. And then Fahner makes his call even I could have seen these downgrades coming! The rating agencies don’t need calls from wealthy people or comments from public officials to look at the numbers. The numbers speak for themselves, Illinois is in serious financial trouble!! - Soccermom - Friday, Jul 26, 13 @ 2:10 pm: OW — that’s an interesting example. Although I still say — in that case, I think it makes sense to defer the pension until actual retirement. And in that case, he could accrue new pension benefits in the second job. - wordslinger - Friday, Jul 26, 13 @ 2:10 pm: Now, geez, what is so difficult about this concept? It’s one thing for public officials to warn or fret about possible future downgrades. It’s another for a partner in the firm that is the state’s bond counsel to privately advocate for a downgrade — against his client’s best interests — in order to advance favored legislation. Seriously, Now, would you want your defense lawyer — who you’re shelling out big money to — whispering in the judge’s ear behind closed doors to throw the book at you? - Oswego Willy - Friday, Jul 26, 13 @ 2:19 pm: - Soccermom -, I know I don’t enough about this specific topic to speak to it well enough to defend one or the other in thoughts or numbers. I do know that there are some out there who look at that professor and not knowing the background, and see 2 pensions, and whine on just the fact of 2 pensions, period, end of discussion. This instructor may have exactly done what you said, and that would make the most sense, but those with blanket statements about more than one pension is evil, we need to either find a way to make that work so that instructor can get his pension(s), or make it work so not to have a 50 year old law enforcement employee who may be burned out does not have to keep the same job because retirement may nullify another public sector opportunity, as ohters advocate as well. I know I have no clue as to the answer, but there are questions out there that even a Dope like me can see. Thanks, - Soccermom - for something to think about in that specific case and the options … - way off track - Friday, Jul 26, 13 @ 3:02 pm: I really don’t like ty, this type of ___, it’ll teach us a lesson, come on. I would get hammered by a progressive income tax, this type of crap is why I’m for it. If your going to act like you know whats best for us, then you need some more skin in the game, i hope a progressive tax goes through and it goes over well at your next luncheon, if you threaten to move to flordia, don’t let the door hit you in the __. - Ruby - Friday, Jul 26, 13 @ 3:04 pm: Soccermom @ 10:08 am == Who is the new U.S. attorney again? == That would be US Attorney Zachary Fardo - the best person to investigate this matter and find out the truth. - Ruby - Friday, Jul 26, 13 @ 3:05 pm: Soccermom @ 10:08 am: == Who is the new U.S. attorney again? == That would be US Attorney Zachary Fardon, the best person to investigate this matter and find out the truth. - qwerty - Friday, Jul 26, 13 @ 3:13 pm: Ty is a (fill in your favorite word). There is a serious question about whether he violated the attorney disciplinary rules on conflicts of interest given Mayer Brown’s representation on the bond deal. He should be beefed to the Attorney Registration and Disciplinary Commission. In addition, the State should fire Mayer, Brown on all matters due to this conflict. There are plenty of law firms out there who don’t actively work to undercut the State’s interests. - Skeptic - Friday, Jul 26, 13 @ 3:30 pm: Skeeter: I think you’re focusing too much on the end result. Yes, a couple rich guys on the phone may have had the same (or less) influence than an elected official talking in public, but the point is the *intention* of the rich guys to *actually cause* the agencies to do something, to me that’s the problem. - Timmeh - Friday, Jul 26, 13 @ 3:39 pm: “The rating agencies don’t need calls from wealthy people or comments from public officials to look at the numbers. The numbers speak for themselves, Illinois is in serious financial trouble!!” http://mercatus.org/publication/modeling-state-credit-risks-illinois-and-indiana Some studies say that the numbers say something different; that while Illinois may have financial troubles, that our credit rating is lower than it should be. - Buster - Friday, Jul 26, 13 @ 3:45 pm: Whether Ty’s actions did or didn’t affect Illinois’ rating, at the least, he is guilty of exceedingly bad judgement. Bragging about doing it is just stupid. Doing it in the context of shorting workers on their earned pensions is more evidence of the growing sense of entitlement demonstrated by the affluent today and their indifference to the difficulties of the struggling middle class and the working poor. I continue to be amazed at the insulation the wealthy can buy with their money. It certainly seems to provide them with enough isolation from the real concerns of ordinary people that they feel comfortable in making tone-deaf asses of themselves in public. - Now - Friday, Jul 26, 13 @ 3:48 pm: Timmeh: r u kidding?! Look what just happened to Chicago’s Rating - Skeeter - Friday, Jul 26, 13 @ 3:57 pm: Skeptic, I actually suspect that Rutherford’s goal was simply to bash the Democrats who run Illinois. If his goal was to improve things, he would have gone into a closed door meeting with Madigan or Quinn and Cullerton and explained the situation as he saw it. I admit that when it comes down to it, there is a chance I will vote for Rutherford. A lot of people do a lot of dumb stuff. And Rutherford’s comments were pretty dumb. The only real difference is that Ty may have done it for purely personal financial gain and harming all of us so he can make some money is about as repulsive as it gets. - Timmeh - Friday, Jul 26, 13 @ 4:08 pm: “Look what just happened to Chicago’s Rating” Our credit rating has a significant impact on how much we pay in interest costs. It’s commonly pointed out as evidence that we aren’t doing well as a state. Yet what goes into it? Are the credit agencies giving us a fair rating? I’m not an expert on credit ratings. But with this story of business interests lobbying for our credit rating to be lowered, some studies saying that our risk of default is overstated, and the current lawsuits against credit agencies involving incorrect ratings for mortgages, I feel there’s enough doubt out there that we should take another look at our own credit rating. Ask for some independent review. And if that review says we deserve the credit rating we have, then fine. But if our credit rating is lower than it should be, then that’s something we need to know the next time we issue bonds. We can go to a different credit rating agency and, especially if we’ve gotten another opinion, get a better deal for Illinois. - kimocat - Friday, Jul 26, 13 @ 4:15 pm: Buster, you expressed my thoughts so well. It would bring a smile to my face to see these CC jerks exposed publicly for the greedy hypocrites they truly are. Our great “captains of industry” really are nothing more than sleazy creeps gaming the system they criticize. - wordslinger - Friday, Jul 26, 13 @ 4:16 pm: Now, why don’t you read the article Timmeh linked to? Nothing wrong with an informed opinion. - Amalia - Friday, Jul 26, 13 @ 4:17 pm: regarding Mr. Metra employee, he was at Metra, then jumped to the State of Illinois. wasn’t there some legislative change that would preclude him from taking a pension and a salary at the same time because he jumped past the end date of that practice? there was lots of jumping pre the end date, but he jumped after. what am I missing? - RNUG - Friday, Jul 26, 13 @ 4:18 pm: Watching Chicago Tonight’s video, there was no doubt which side of the fight they are on … - Norseman - Friday, Jul 26, 13 @ 4:18 pm: Word, do you expect them to crush their preconceived notions on how bad government, public employees and public retirees are by becoming informed? Next, you’ll be telling them that there is no Santa Claus. - Madison - Friday, Jul 26, 13 @ 4:23 pm: I have a hunch that what Ty and his fat cat buddies are gonna reap out of sowing all this pension trouble against a bunch retirees is a graduated income tax. About time these civic minded individuals paid their fair share, - Concerned Retiree - Friday, Jul 26, 13 @ 4:24 pm: As questionable as the actions of Ty and Co., the important long term issue here is the difference between California’s ratings and those of Illinois. Given that IL has taken basically the same actions as CA, why has out rating not improved? CA took no action against existing retirees. - Cod - Friday, Jul 26, 13 @ 4:25 pm: Fahner’s conflict of interest in manipulating bond ratings downward for his Civic Committee while his law firm is being paid to counsel the State on bonds is a really big development (great research, wordslinger). I see already that, while the media conglomerates like the Trib papers are sittting on the story, it is going viral on blogs. It is only a matter of time before this becomes a national story. I predict the NYT will pick it up very soon after this latest revelation. - Norseman - Friday, Jul 26, 13 @ 4:26 pm: Concerned Retiree - Perhaps it’s because California doesn’t have Pat Quinn as the Governor. - Buster - Friday, Jul 26, 13 @ 4:26 pm: The CC has just made it official: “There IS a Santa Claus…..We should know.” - wordslinger - Friday, Jul 26, 13 @ 4:30 pm: The Civic Committee statement in the update completely ignores the actions that its members took in advocating for downgrades. From Fahner’s previous statement, those advocates included the state’s bond counsel and CEOs at Abbott Labs and ITW, companies that pay rating agencies to rate billions in debt. What about the hedgies? What about the investment bankers? Don’t be shy, Ty. Tell us more. - Buster - Friday, Jul 26, 13 @ 4:31 pm: Madison, if Illinois gets a graduated income tax, we can ALL believe in Santa! - Norseman - Friday, Jul 26, 13 @ 4:32 pm: Oops forgot to add my new tag line. *** Oswego Willy for Governor, his daddy doesn’t own a lumberyard (I think)! *** - Oswego Willy - Friday, Jul 26, 13 @ 4:39 pm: - Norseman - lol, I will give you props for your tenacity! With you in my corner .. - wordslinger - Saturday, Jul 27, 13 @ 1:09 am: Ty the bond counsel; the hedgies; the investment bankers; and the multi-nationals who pay oogats in state taxes and get the state handouts; They’re all gourging at the taxpayer trough telling you that the teachers, firemen, coppers, janitors and lunch ladies who ponied up in good faith for their pensions are the problem. If you can’t spot the chump the first time the deal goes round, you’re it. Sorry, comments for this post are now closed.