Goodbye Elaine Nekritz. What about Dan Biss?

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My 2014 cartoon of State Representative and pension thief Elaine Nekritz.

I have been in this fight against pension thievery for a long time. It goes back long before I was a retired teacher myself.

As my friend and fellow blogger Glen Brown always says, public employee pensions are a moral and legal obligation of the state.

And when the Illinois Supreme Court ruled in favor of the pension protection clause, they made another important point: If the state can take away the promised pensions of state workers based on a crisis that they themselves created, what rights and property of the people are safe from future thievery.

The two leading legislative proponents of pension theft – although not the only ones, for sure – were Representative Elaine Nekritz in the House chamber and State Senator Dan Biss in the Senate chamber.

I debated both these folks over the course of our successful defense of our pensions.

Here I am outside Dan Biss’ Skokie district office in 2013.

And here I am challenging Elaine Nekritz at a forum that same year at East Aurora High School.

There has been a lot of water under that pension bridge since then.

Most importantly, the highest court in the state has ruled in favor of the pension rights of current retirees, and I believe in favor of current employees.

Where are Biss and Nekritz?

Dan Biss is running for governor of Illinois as a Progressive. On many issues he certainly qualifies.

I have asked him directly about his current position on pension protection and pension reform proposals.

I’m not going to vote for anything I don’t think would be upheld by the courts,” he told me.

I find this to be a fairly careful and nuanced statement.

As my friend, Glen Brown put it, the pension promise was a moral as well as a legal obligation of the state.

Maybe it is too much to expect a politician to speak in terms of moral obligations.

As for Nekrtiz, she announced today she is not running for state representative again.

At one time Nekritz was seen as a possible successor to Speaker Michael Madigan.

But she never said she was wrong about pension theft.

I believe her reputation as a pension thief put an end to her political aspirations. Just as Pat Quinn’s defeat by Bruce Rauner can be laid at the feet of his views on pension reform and his signature on an unconstitutional bill.

Good riddance to Elaine Nekritz.

As to State Senator Dan Biss, I think he will have trouble with state retired workers and their families.

I think his change of mind about voting for unconstitutional laws is progress.

I think he needs to say more.

We asked him to come on Hitting Left with the Klonsky Brothers to talk about it. His people said maybe they could find time in September.

Leon Black, Apollo Global and public pensions.

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Leon Black of Apollo Global Management.

A couple of years ago Donald Trump was discussing his business practices with George Stephanopoulis.

“Excuse me,” he said. “I never went bankrupt. And let me just tell you: If you look at our great businesspeople today”—he mentioned the leveraged-buyout kings and investors Carl Icahn, Henry Kravis, and Leon Black, and said he could name 25 others—“all of them have done the same. They use, and we use, the laws of this country, the bankruptcy laws, because we’ll buy a company. We’ll have the company, we’ll throw it into a chapter, we’ll negotiate with the banks, we’ll make a fantastic deal. We’ll use those [laws]. But [the bankruptcy filings] were never personal. This is nothing personal. You know, it’s like on The Apprentice. It’s not personal. It’s just business. Okay?”

Donald mentioned Leon Black for good reason.

Black is the private equity billionaire who runs Apollo Global Management.

Last August Black was fined $53 million for charging investors phony fees.

From the SEC announcement:

“A common theme in our recent enforcement actions against private equity firms is their failure to properly disclose fees and conflicts of interest to fund investors,” said Andrew J. Ceresney, Director of the SEC Enforcement Division.  “Investors in Apollo funds were not adequately informed about accelerated monitoring fees and separately allocated loan interest, and therefore were unable to gauge their impact on their investments.”

According to the SEC’s order instituting the settled administrative proceeding, Apollo’s supervisory failures pertain to a then-senior partner at the firm who was twice caught improperly charging personal items and services to Apollo-advised funds and their portfolio companies.  Other than verbally reprimanding the partner and requiring repayment of improperly submitted expenses, Apollo took no further remedial or disciplinary steps on either occasion.  A firm-wide expense review eventually revealed even more personal expenses the partner improperly charged to fund clients, and this led to the partner’s separation from the firm.

“Apollo failed to take appropriate action to protect its clients upon first learning that a partner was improperly expensing personal items and services to the funds, and its failure resulted in repeated misconduct,” said Anthony S. Kelly, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.

Leon Black’s Apollo Global is heavy in public pension clients including Illinois’ Teacher Retirement System.

From Pension & Investements, 2014:

Illinois Teachers’ Retirement System, Springfield, committed $1 billion total to five managers and allocated an additional $450 million total to four existing managers, confirmed spokesman David Urbanek. The $42.8 billion pension fund committed $500 million to Apollo Global Management to run special situation separate accounts in private equity and fixed income, $250 million each. Apollo currently manages $369 million for TRS.

 

The Illinois Policy Institute’s relationship with media. Scamming the easy marks.

“You can’t cheat an honest man,” said W.C. Fields.

I had to laugh when Illinois’ journalistic cynics and insiders complained that they had been scammed by the anti-union fake think tank, the Illinois Policy Institute.

Apparently the IPI, which is nothing more than a paid front for the Bruce Rauner agenda,  created a front (Sorry if this gets complicated) to make a movie attacking Rauner’s legislative nemesis, Speaker Mike Madigan.

The IPI’s CEO, Jim Tillman, announced the creation of the movie-making IPI front group, Illinois Policy Action, in August.

“Illinois Policy Action will serve as “boots on the ground” – and in the capitol – when it comes to advancing the Illinois Policy Institute’s ideas in Springfield. The mission of Illinois Policy Action will be to turn into law the policy solutions developed by the expert research team at the Illinois Policy Institute. Illinois Policy Action will operate as a nonprofit, nonpartisan 501(c)4 organization. Illinois Policy Institute and Illinois Policy Action have identical boards of directors and will share some staff and facilities. This expansion increases our ability to ensure that the voice of the taxpayers is heard more loudly than ever in Springfield.

A 60 minute movie about Mike Madigan? Tell me. Where will this movie being playing? Who will be watching? I can’t think of anyone who would want to watch Madigan for 60 minutes.

Here is the best movie you will ever see about Speaker Madigan. It is only six minutes long. Speaking to the press just after the passage of SB1,  he says he knows four Illinois Supreme Court judges who will rule SB1 – the pension theft bill – constitutional. As you know, the Court rule unanimously that SB1 was unconstitutional.

Illinois Policy Action (the front group for the Illinois Policy Institute, which is the front group of Bruce Rauner’s Turnaround Agenda) hired a front group to make their movie. A front for a front for a front for a front. It’s enough to make my head spin.

Those appearing in the documentary according to Illinois Policy: “Chicago Tribune columnist John Kass, University of Illinois professor and political observer Dick Simpson, former Illinois Senate President Emil Jones, law professor and former drafter of the 1970 Illinois Constitution Ann Lousin, former state Sen. Steve Rauschenberger, Rob Blagojevich who is the brother of former Gov. Rod Blagojevich, political blogger Rich Miller.”

Funny. As a long-time critic of Michael Madigan they didn’t ask me.

Why? Maybe because I am not an insider and not so easy to scam.

Rich Miller, a Springfield insider and publisher of CapitolFax said he was duped into appearing in the movie.

John Kass said his appearance was a lapse in journalistic ethics and made a public apology.

The Tribune’s anti-union political cartoonist, Scott Stantis, says his appearance was also the product of a con.

How did this happen? How did all these insiders get scammed by the IPI?

The fact  is that the entire Illinois media has been scammed by the IPI for years. Shows like public television’s Chicago Tonight will not talk about public pensions without having a spokesman from the IPI on the panel.

This is all about the mainstream press trying to claim they show both sides and to make Madigan a useful foil in the campaign to discredit public pensions.

Like there are two sides to pension theft.

The pay-to-play Tom Cross.

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On February 26, 2016, Gov. Bruce Rauner announced the appointment of Tom Cross, former Republican leader of the Illinois House, to head the Illinois Board of Higher Education. According to the Illinois Pension Code, Cross will also serve as chairperson of the State Universities Retirement System (SURS) Board of Trustees.

-By Karl-Heinz Gabbey

In 2009, just after Madigan’s House of Representatives impeached Rod Blagojevich, Tom Cross sent me a form letter in which he justified his role in the impeachment; and that he would now work for “ethics reform.” I nearly choked. Who else got this letter? I was struck by the sanctimonious and hypocritical tone of his justification, particularly since I was quite aware that “pay-to-play” and Springfield fit hand-in-glove. Cross was no exception. I was particularly offended by Cross’ attempt to play us for fools. I called his office and unloaded all my indignation on his innocent staffer who, after my rant, asked me for my phone number. Phone number? Why did she ask me after I treated her so rudely?

To my complete astonishment, Cross called me at home the following morning, and we had a long conversation about “ethics and reform in government.” He was disarming and we had a civil discussion. At the end of our conversation, I asked him bluntly whether or not he had ever engaged in “pay-to-play.” There was a pregnant pause, a “dance,” and he never answered my question, when, as I recall, he needed “to get back to work.” I regret that during his “dance,” I didn’t stop him in his tracks to say I’ll take that as a “yes” answer.

If “pay-to-play” sent Rod to prison, a fair number of state legislators and senators should have been his cell mates, including Tom Cross. I didn’t know at the time that a sinister, corporate-financed organization devoted entirely to the corruption of our entire political process called the American Legislative Exchange Council (ALEC) existed, and that Tom Cross was and still is a prominent member.

Is it any surprise that Cross is in the forefront of “pension theft” again when this corrupt so-and-so sold his soul to the devil a long time ago?

Tom Cross is a liar and a thief.

Glen Brown

-Glen Brown posts on his blog Teacher/Poet/Musician.

“…In the last 10 years, pension costs have risen to $7.5 billion in 2013 from $1.6 billion in 2003. This year’s pension costs will consume approximately 22 percent of the general funds budget, up from 7 percent 10 years ago. And it is projected to rise rapidly in coming years.

“What does this mean to you — the Illinois taxpayer? The parent with children in elementary and high school or at a state university? Someone who is disabled or in need of other state services?

“The answer is so important to the future of our state. As pension costs grow exponentially, our ability to meet these needs dwindles. It is the proverbial elephant in the room that grows larger and more untenable each year.

“We have reason for hope. The Illinois House approved three major reform concepts this spring that together will save our state about $100 billion over the next 30 years in pension costs. There is more work to be done to get a comprehensive reform package put together and approved, but the key components are in place…

“Pension reform must be comprehensive and restore sensibility to a process that now forces us to put retirement pay ahead of children, seniors and the needy. It must be constitutional, providing fairness and stability for state employees and taxpayers. Anything less would be a disappointing failure.

“The path ahead is difficult, but clear. We must collectively recognize the enormous fiscal challenge our pension debt is presenting, agree to a reasonable comprehensive plan that addresses the challenge, then set aside our differences and work together to pass that solution — House and Senate, Republicans and Democrats…”

Tom Cross

from Working together on pension reform
Tom Cross,

You are a political opportunist who offers no solutions to the problems you and other legislators have created. You know why there is an increasing unfunded liability: it was caused primarily by legislators’ fraud; you know why important services have not been cut for decades: legislators stole money that was intended for the public employees’ pension funds to pay for those services; you know why pension costs have risen: legislators now owe public employees billions of dollars; past General Assemblies did not fully contribute to the pensions systems for several decades, and today’s dysfunctional General Assembly continues its habitual practice of ignoring the state’s flawed revenue system and flawed Pension Ramp and assaulting the state’s public employees’ and retirees’ benefits and rights.

You don’t care about “constitutional” contracts or upholding your oath of office: you have sponsored and supported unconstitutional bills; nor do you care about “children, seniors [especially public employees and retirees] and the needy”: you use them as a ploy to shift attention away from your ambition, dishonesty and thievery.

The House’s “three major reform [bills]” (HB 1154, HB 1165 and HB 1166) are an attempt to slash public employees’ retirement salaries and earnings and raise the retirement age while concealing the salient causes of the state’s financial mess. A call to all state representatives and senators to “collectively recognize the enormous fiscal challenge [that] pension debt is presenting” in the Chicago Tribune is a devious and irresponsible appeal to break a constitutional contract with the state’s public servants and retirees and perpetuate more legislative theft.

Glen Brown

Can the IEA bargain away my pension benefits? What did the court say?

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Yesterday, following the Illinois Supreme Court’s ruling on the City pension case I focused on the contention by the City’s lawyers that an agreement with unions representing employees made the law constitutional

In its ruling the Court said the unions “were not acting as authorized agents within the collective bargaining process….Rather, ‘these negotiations were no different that legislative advocacy on behalf of any interest group supporting collective interested to a lawmaking body.’”

From that I drew the conclusion that the public employee unions could not bargain away our benefits as the IEA, IFT and other public union leaders tried to do when they bargained SB2404 with Senate President John Cullerton. SB2404 never made it into law. If it had, retirees would have seen their COLAs diminished.

In a response to the Court’s ruling yesterday, IEA General Counsel Mitch Roth sent out an email. He wrote, “Whether a union and employer could agree to changes through the collective bargaining process remains an open question.”

I think this is a large amount of self-serving lawyer talk.

I don’t argue that in the past the unions have represented us in bargaining to improve retirement benefits. 

However, the crux of the matter is whether the result is an improvement or a diminishment of benefits.

Chicago argued that a promise to secure the solvency of the pension systems counted as consideration. Consideration is required in any change to a contractual agreement. The court ruled that Chicago could not claim that simply continuing to fund the system counted as consideration.

The Court has ruled that there is no constitutional requirement to fund the pension system. The Court has been consistent on this. But the constitutional and contractual promise to pay it is their concern.

So. Is Mitch right that whether a union and employer can agree to changes through the collective bargaining process remains an open question?

Not really.

Nobody challenged the right of the union to represent their members and members of a class when it was done to improve retirement benefits.

The court was clear that the unions can’t bargain on behalf of the employees if the results are a diminishment or impairment of benefits.

Senior moments. This guy’s house was worth more than the pensions he tried to steal.

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Ira and Ingabord Rennert live in their home in Sagaponack on Long Island, reported to be the largest occupied single-family residence in the United States.

Ira Rennert tried to steal the pensions of his employees.

His private sector pension theft is one of those rare cases in which the employees won.

Rennert owns stuff eveywhere. He owns mines, steel mills and assembly lines as far away as Peru.

His home called Fair Field, the largest single-family home in the country, is estimated to be worth about a quarter of a billion dollars.

That happens to be more money than he tried to steal from the pensions of retired employees of one of his steel mills.

Usually when a private company forfeits on its pension obligations a government agency ends up paying the employees a few pennies on the dollar.

But for only the second time in 42 years the federal Pension Benefit Guaranty Corporation has said no.

Rennert’s Renco bought R.G. Steel in 2011.

It had a pension that was underfunded by nearly $70 million. In 2012, it was declared bankrupt.Shortly before the bankruptcy, Mr. Rennert’s company went looking for new financing for the subsidiary. The deal it eventually struck called for Cerberus, the private equity group, to buy a 24.5 percent equity stake in R. G. Steel.

The Pension Benefit Guaranty Corporation said the deal was intended not to revive R. G. Steel but to reduce Renco’s ownership stake from 100 percent to less than 80 percent — the cutoff for being included in the so-called controlled group that is jointly responsible for pension obligations.

Ira may have to sell a few lamps from Fair Field to pay off the debt.

Pension thieves fall out.

Raunermadigan

-By Glen Brown who posts at Teacher/Poet/Musician

I have written many times that challenges will lie ahead for current public employees, retirees and their families, and for every citizen of Illinois. These facts will not changed: there are liars and thieves among us who will continue to choose which contracts to honor and which ones to violate in the future.

We know they will attempt another legislative thievery of our benefits and rights again. Thus, we must continue our vigilance. Most importantly, we must continue our resistance against the dishonest politicians and their mendacious accomplices, such as members of the Civic Committee of the Commercial Club of Chicago, the Civic Federation, Illinois Policy Institute, and their ilk.

We know corrupt legislators (and the current governor) will attempt to pass laws for their own advantage. We should recall that despite their pledges, the legislators’ criteria for justice are their considerations for what is expedient for them—their re-elections to remain in power and wealth.

You can find the entire Glen Brown post here. It includes extensive quotes from Madigan, Rauner and Cullerton.

You know that 7% pension pick-up that CPS wants to take away? Don’t believe their hype.

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-By John Dillon

The Illinois Policy Institute is angry once again with what their editorialist Diana Sroka Rickert considers another unnecessary handout to Chicago teachers:  the Pension Pickup.

In her December Tribune editorial last week, Rickert urged Chicago’s besieged Mayor Emanuel and CPS CEO Forrest Claypool to end the current practice of providing pension pickups for the Chicago Teachers Union.

“While (they) have busied themselves asking state taxpayers to send hundreds of millions of dollars Chicago’s way, they’re unwilling to use the $174 million that’s already available for them to use for teacher’s pensions.”

But they’re not the peculaters.  The real culprit?  Read on, please.

Chicago teachers are supposed to pay 9 percent of their salaries toward their own retirement savings.  But instead, teachers pay just 2 percent; the rest of the “teachers’ contribution” is picked up by taxpayers, thanks to a clause negotiated into their contract6s in the early 1980s.”

As a retired educator from a suburban district I suppose I could feel a little miffed with having paid 9.4% of my salary each paycheck, instead of 9% like those in the CTU.  Adding to that, if CTU paid only 2% of the 9%; well, why didn’t I get such a deal?

And that’s exactly what Rickert and the IPI want all of us to do.  Let’s not think it out or look into it.  Let’s just be blind angry.

The “deal” that Chicago teachers got in the early 1980s was actually a mandated law by the General Assembly in 1983.  And this statute (40  ILCS 5/17-130.1) provided the opportunity for retirement contributions to be considered part of the negotiating process in salary and benefit settlements during collective bargaining.  In fact, all districts in Illinois got the same deal.

“An Employer or the Board may make these contributions on behalf of its employees by a reduction in the cash salary of the employee or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase.”

Teacher’s Union:  We’d like to ask for a 2% increase in our wage benefits across the board this next contract.

Board of Education:  We’d like to find a way to do that.  How about a ½% increase across the board, and we’ll pick up 1.5% of your contribution costs per person?

If` you’re still not sure how this works, it means that my union never debated with the Board over my 9.4% payment.  But just down the highway at another district near the airport, they did and paid only 4% of their 9.4% requirement.

Read the rest of the article here.