The Better Government Association misses the bigger pension picture.

Andy Shaw

The corporate funded Better Government Association and its head Andy Shaw was a big supporter of the unconstitutional Senate Bill 1 pension theft.

One of the favorite ploys of the Better Government Association is to find an example of corruption or cheating by some high-level government official and then twist it into a story about all public employees.

Particularly when it comes to pensions.

This isn’t altogether surprising when you consider that the BGA is funded by the same Civic Committee corporations that have been targeting public employee pensions for years.

Yesterday it was about the former City Treasurer Stephanie Neely.

The local Chicago Fox station reports

In 1991, the state legislature passed a law that carved out a special exemption for elected officials in Chicago, allowing them to qualify for a pension at eight years.

In October, Neely announced she would resign November 30, exactly eight full years after her first day on the job. On October 23rd, five weeks before leaving office, Neely switches her pension credits into the elected official’s plan. Because that plan requires a higher contribution rate, Neely then wires an additional $35,784 to the pension fund to make up the difference. It’s money well spent, as she now will be able to collect a $34,716 annual pension when she turns 60 in 2023.

The BGA calls the eight year eligibility period a perk.

“It’s not illegal. What she did is allowed under the law. But it’s a perk that’s afforded to elected officials that regular city workers don’t get,” Rehkamp said.

Neely, who’s now working for a private company, would not talk to FOX 32 on camera, but told the BGA she hasn’t decided whether to take her pension.

“I wanted to make sure I had the option to do whatever is in my best interest since I didn’t contribute to social security… I didn’t create the law (allowing this),” she said.

As city treasurer, Neely served on that very same pension fund’s board and knows about all its financial problems.

MEABF has only 37-cents for every dollar it owes in pension payments, and carries an unfunded liability of more than $8-billion.

“It’s a great deal for Stephanie Neely and it’s a horrible deal for taxpayers,” Rehkamp added.

Who wouldn’t be pissed that the legislature created a perk like this for itself and other elected officials?

But the story ends with this: “That could be said for many of the pensions for public employees, which are woefully underfunded and will cost taxpayers billions to patch up down the road.”

And so an ethical issue involving the City Treasurer becomes a story about pensions for public employees.

A BGA bait and switch.

Much more of a threat to pension system members and to taxpayers than the $34,000 a year pension Neely will receive when she turns 60 is the hinky investment strategies of Neely’s successor, City Treasurer Kurt Summers.

Summers’ plan to move city pensions to high risk investments was outlined yesterday in Mark Anderson’s Ward Room report.

The overall market for public pension dollars has seen a significant shift into alternative investments in the past decade or so. By 2012, the use of alternative investments in public pensions has more than doubled since 2006, with the use of alternative investments reaching 23 percent of all plan portfolios. By some estimates, as much as a quarter of the $3 trillion in public pension funds are already in alternative investments—which means $660 billion of public money is now under private management.

Adopting a more risk-friendly approach centered on alternative investments is a move Summers, as a veteran of Grosvenor Capital Management, is likely to feel comfortable with—which may well be one of the reasons Emanuel appointed him. Grosvenor has made its mark in the financial world primarily through managing alternative investments such as hedge funds-of-funds, with over $47 billion currently in alternative assets under management.

“The reality is, you have just as much, if not more exposure to risk and volatility in the market with investments in basic public securities than you do with alternative products meant to mitigate risk and limit volatility,” Summers told the Sun-Times. “That’s the business I was in — trying to do that for clients around the world.”

The Treasurer’s office did not respond to repeated requests for information and comment for this story.  

 And not a word from the BGA.

The Better Government Association continues to spread the lie about public employee pensions.


The Chicago Sun-Times and the corporate-funded so-called Better Government Association continues to perpetuate the lie about the Illinois pension underfunding.

The irony is that they use out-going Illinois Governor Pat Quinn to promote their lies.

In a story penned but unsigned by the BGA in the Sun-Times:

If he lives another 20 years, an average life expectancy for a man his age, he would (absent pension reform) collect a total of more than $3.6 million.

Quinn’s yearly pension in 2035 could reach an estimated $238,476, thanks to generous cost-of-living raises that compound at an annual rate of 3 percent. (Again, this is assuming there’s no pension reform.)

It is ironic because Quinn, declaring he was put on this earth to cut public employee pensions will do quite well on his.

More than enough to hire somebody to mow his lawn.

But this phony populist has a pension most teachers can only dream of receiving.

While Quinn is eligible to receive $136,000 starting in January, the average retired teacher pension this year in Illinois is $47,000.

But facts have little to do with the BGA. Their consistent stories of supposedly excessive pensions are like Ronald Reagan’s Cadillac-driving Welfare Queens.

It is based on a false premise:

Such cost-of-living increases are helping fuel the financial problems with the state’s five employee-pension funds, which collectively carry unfunded liabilities of more than $100 billion. In layman’s terms, that means the systems aren’t even close to having enough money to pay future pension obligations.

In no way do pension payouts, whether they are Pat Quinn’s six figures or a retired 85-year old teacher in Minooka living on $40,000 a year have anything to do with the $100 billion dollar unfunded liability.

The unfunded liability is called “unfunded” because the state failed to pay what they owed.

And didn’t pay it for decades and decades.

The Sun-Times and the BGA copy the NY Times. They blame the unfunded liability on mismanagement.

Listen folks. It’s not the benefits. It’s not mismanagement.

Ask an Illinois legislator. When asked by a teacher in Aurora why they stole our pensions, Democratic Party State Rep Elaine Nekritz responded, “We didn’t steal it. We never paid it in the first place.”



Chicago’s mob families.


If you want to understand the way Chicago works, watch again The Godfather.

The Democratic Party Machine is not a single group. It is made up of families.

You got your Mells. Your O’Connors. Your Burkes.

Sometimes their interests converge. Sometimes they draw knives.

It is one of the reasons that even with Mrs. Lewis out of the race, Rahm’s election is not assured.

A mob family war can break out at any moment.

Today the Better Government Association exposes how boss Fast Eddie Burke’s clout got a contract with CPS for a company already banned by the city for corruption.

But Rahm runs CPS.  We know that because with no elected school board we have a system of mayoral control. 

That means, ahem, the Mayor controls it.

An Emanuel spokeswoman said the mayor hadn’t been aware Windy City Electric was still working for the schools. “The mayor has asked CPS to look into this matter immediately,” she said.

CPS has paid Windy City Electric more than $3.1 million since August 2012, when City Hall’s ban took effect, records show. The company repairs and installs security cameras, light fixtures and other electrical equipment for CPS.


March 26, 2012: The Watchdogs: Inspector general wants McMahon business banned from city work

Aug. 27, 2012: Emanuel bans Windy City Electric from doing city business

When they banned Windy City Electric from getting city contracts in 2012, city officials said the business was controlled by Anthony P. McMahon, a top precinct captain for Ald. Edward M. Burke (14th) and McMahon’s brother John K. McMahon, a former city electrician, and not by their wives, as the company claimed.

Anthony McMahon’s wife Kathleen McMahon and John McMahon’s wife Nancy McMahon incorporated Windy City Electric in 1989. Soon after, the city certified the Chicago company as a woman-owned business. In 2005, the company withdrew that certification amid questions from then-Mayor Richard M. Daley’s administration about whether Windy City Electric was owned and run by women. But the company was allowed to keep doing work for the city.

City of Chicago Inspector General Joe Ferguson reinvestigated the company in 2009, concluding the two sisters-in-law didn’t own Windy City Electric and submitted false documents to the city in 2004.
Windy City Electric representatives didn’t return messages seeking comment.

The city ban came after the Chicago Sun-Times and Better Government Association reported the city could have banned Windy City Electric in 2005 but didn’t and had paid the company $30.6 million since then. The Sun-Times/BGA investigation also found that the extended McMahon family had a longtime hold on contracts to provide milk to city schools that saw CPS paying more for milk than many suburban schools did. CPS renegotiated that contract following those reports.

I just need to mention here that Fast Eddie’s wife Anne Burke sits on the Illinois Supreme Court and was the one vote against the pension protection clause in the Kanerva decision.

Rahm is shrugging and says he didn’t know about Windy City Electric.

Of course he did.

Just like mob families.