Sunday, December 18, 2011

When Labor Unions Become A Public Burden...

In principle, I am supportive of labor unions. They were instrumental in improving the wages and working conditions for millions of Americans. In the private sector, a dynamic give-and-take occurs between unions and businesses, as seen in recent negotiations between automobile worker unions and the major auto markers. Faced with the clear reality that the domestic auto industry would go under if they did not become more globally competitive, the unions made major wage, pension and work rule concessions. Conversely, during industry wide booms, when labor markets tighten, unions can and should push for an increased share of the profits. But, this salubrious dynamic is entirely absent from unions that have embedded themselves into corrupt political systems. A recent Chicago Tribune Investigation documented how working with the Chicago Democratic Machine, politically connected unions heads were able to loot Illinois's already broken pension system. For example, Dennis Gannon, the former president of the Chicago Federation of Labor earned $55,474 a year, but now sucks $158,258 a year off the public pension system. So, before you indiscriminately go to bat for unions, I urge you to make a distinction between private and the public unions that partake in Chicago's tradition of graft and outright corruption.

Yes, this is corrupt.

Pension rigging this egregious demands three investigations — and an Illinois Truth Commission.

September 25, 2011
As Chicago's 1991 municipal elections approached, Mayor Richard M. Daley was consolidating power for his first re-election campaign. 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.
Always, though, the mayor would owe a debt for the 1991 legislation to his brother John, his pal Joyce and the 10 members of that conference committee: Senate Democrats John D'Arco, Emil Jones and Phil Rock; Senate Republicans John Friedland and Calvin Schuneman; House Democrats Ralph Capparelli, John Cullerton and Sam Wolf; and House Republicans Gene Hoffman and Terry Parke.
Only Cullerton, now president of the Illinois Senate, is in the Legislature today.
Pensions and political gain
That is the essence, but by no means the extent, of the cronyism that binds Illinois public officials and public employee union leaders. The officials — in Chicago, its suburban collar, downstate and in state government — have exploited public pension funds as huge pools of money that enable them to wieldpower. Many of those public officials have arranged enormous pension benefits for themselves and their peers in electoral politics from the executive, legislative and judicial branches. But buying labor peace, and labor union political support, also has been high on their priority list.
This is yet another classic saga of how Illinois power brokers take from the many to line the pockets of a chosen few. Legislators awarding free tuition at state universities to the children of their contributors, school boards inflating superintendents' late-career salaries to raise their pension calculations, politicians awarding one another pensions for part-time jobs — like those three traditional scams, this pension-rigging for union officials fits the definition of "corrupt": contaminated, morally unsound, debased, venal.
Calculating labor leaders' city pensions on their union salaries means Liberato "Al" Naimoli, president of Cement Workers Union Local 76, draws an annual city pension of $157,752 for a city job that paid him $15,264 a year. Then there's Dennis Gannon, former president of the Chicago Federation of Labor. He resigned from his city job, which topped out at $55,474, in 1993. But, because an accommodating Chicago City Hall rehired him for one day in 1994, he's drawing a city pension of $158,258.
Was this legal?
If you haven't read the Wednesday and Thursday news stories in which the Tribune's Jason Grottoexplained how city and state lawmakers enabled these outrages, you'll find them at Fascinating reads, don't miss them.
rotto's stories may expose the tip of a deep and wide iceberg. There are indications that this pathology — taxpayer-funded pensions based on huge union salaries — extends well beyond 23 labor leaders from Chicago. We hope members of the affected unions note that, on average, these privileged few have accrued pension benefits nearly three times what typical retired city workers receive. Those workers ought to be furious that their leaders are raiding their funds. Just as taxpayers should be furious about union bosses depleting city pension coffers that are underfunded by $20 billion or more.
We on the Tribune editorial board don't practice criminal law; perhaps every action described in Grotto's stories was, and is, legal.
That said, the exposés suggest three avenues for investigators: FBI agents can assess whether any pensioner fraudulently claimed benefits in asserting his eligibility to qualify for this deal. The conduct of city pension fund officials — and of other city officials who directed payments into those funds — also is open to scrutiny. Separately, the office of Chicago's inspector general has authority to explore the use, and potential misuse, of city funds. And the U.S. Department of Labor has responsibility to help protect union pension funds. Any improper claim on those funds not only diminishes what remains for other retirees; withdrawn assets also deprive the funds of future growth possibilities.
For Mayor Emanuel …
Chicago's current mayor, Rahm Emanuel, didn't cause this pension debacle, but he can begin to address it. City Hall needs to reform policies that permit labor leaders to take essentially indefinite leaves of absence from city jobs, one factor permitting big city pensions for the long-departed. He also should be asking why nobody in city government, or at the pension funds, blew a loud whistle over these egregious practices.
But Emanuel is correct that Illinois needs thorough, rather than scattershot, pension reforms. To that end:
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.
And Cullerton, who says the pension law he helped pass is a relic from a bygone era, has instructed his staff to draft legislation "that would address the concerns that have been the focus of these media reports." Cullerton says the Legislature should address the problems in the fall veto session or in January.
Let's make that the fall veto session, Senator.
We hope House Speaker Michael Madigan will aggressively contribute. He was in full control of his chamber in, yes, 1991, when this noxious bill was approved.
… and for Illinois:
Citizens awakened to pension scandals at many levels of governance in this state deserve an Illinois Truth Commission to investigate all that's wrong and how lawmakers can correct it. Nobody will fight this idea more than the lawmakers, who have incredibly sweet pension deals themselves, and who have awarded generous deals to others. (Question from Illinois Pensions 101: Why do legislators give fantastic pension perks to judges? Answer: A lot of the actions legislators take wind up being challenged and then … evaluated by judges.)
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.

No comments:

Post a Comment