The High Cost Of Walker's Act 10

Earlier this year, Scott Walker and the other Republicans were doing victory tours around Wisconsin, bragging that Act 10 - a Right to Work law aimed solely at public sector workers - had saved taxpayers some $5 billion over the past five years. Of course, these claims came from cherry picked data and fudged math and didn't stand up to any type of analysis.

In reality, Act 10 didn't save any money. It merely shifted the burden onto the counties and municipalities. And despite that, state spending has been increasing, despite the drop in revenues and the supposed savings.

But in Milwaukee County, Act 10 did not only not save any money, it is proving to be extremely expensive.

In 1991, Milwaukee County enacted the "Rule of 75," which meant that when an employee whose age and years of service totaled 75, they were eligible to retire with full pension benefits. However, this rule only applied to non-union represented employees or represented employees that were hired in 1993 or earlier. Represented employees weren't eligible for full benefits until they reached the age of 60 or 64, depending on their date of hire.

When Act 10 was enacted, AFSCME, the union representing public sector workers, chose not to play the Republicans' union busting games and didn't bother holding a vote to recertify. Their contention was that only the unions could decertify themselves and AFSCME wasn't about to do that. Thus, Milwaukee County chose to not recognize the union and claimed that all of its members were now non-represented.

This meant that over 1,000 employees suddenly became eligible for the Rule of 75.

Recognizing this loophole, the county then passed a resolution which basically said that if the employee wasn't eligible for the Rule of 75 then, they weren't eligible for it now.

AFSCME filed a class action lawsuit, arguing that the previously represented employees were now eligible. In other words, the county was trying to have it both ways.

Recently, the Honorable Stephanie G. Rothstein issued her decision in the matter, ruling for AFSCME, and agreeing that these 1,000 employees were indeed eligible for the Rule of 75:

Rick Badger, executive director of AFSCME Council 32, announced today that the Union has received a favorable decision from a Milwaukee County Circuit Court in its ongoing battle on behalf of Union members who work for Milwaukee County. Judge Stephanie G. Rothstein issued her 10-page decision dated May 27, granting Union members additional early retirement benefits on terms previously available predominately to non-Union employees.

Noting that Act 10 “prohibits bargaining over all subjects except for ‘base wages’,” Judge Rothstein determined that the County’s Ordinance, passed on Sept. 29, 2011, granted the Rule of 75 to employees who were hired prior to January 1, 2006, so long as they are “not covered by the terms of a collective bargaining agreement.” Previously, Union employees were granted the benefit only if hired prior to 1994. The Judge decided:

[U]pon the effective date of Wisconsin 2011 Act 10, there was no collective bargaining agreement in effect, or executed, or even being negotiated; there was no status quo protection existing under MERA with regard to “conditions of employment;” and therefore there was no pre-existing legal obligation between the parties as it related to conditions of employment beyond wages. Therefore, because no collective bargaining agreement was in effect, the plaintiffs were not “covered by the terms of the collective bargaining agreement” as used in Ordinance 11-15 for purposes of evaluating their eligibility for the Rule of 75.

Badger said that the Union continues to insist that its members be treated fairly. “This case demonstrates yet another consequence of the state’s demolition of collective bargaining. When the county is left to its own unilateral actions, the give and take of collective bargaining is gone,” Badger said.

The process the county used led to them granting benefits in an ordinance change that the county argued to the Court was meant to ensure that employees “would not be eligible for the Rule of 75.”

Mark Sweet, an attorney at Sweet and Associates, LLC, representing the Union, noted that the Court cited longstanding Wisconsin Supreme Court precedent in holding the County to the language it enacted in the ordinance. As cited by the Court, “It is the enacted law, not the un-enacted intent, that is binding on the public.”

This would mean a cost in the hundreds of millions of dollars to the county's pension fund.

Ironically, the current county executive, the conservative "Democrat" Chris Abele, is known to sing the praises of Act 10, and how it saved the county so much money. It is not known if he still feels that way now.

It is a sure bet that the county will appeal this decision all the way to the state supreme court, which has been known to ignore the law and rule in the way that their conservative funders want them to rule. But then again, the conservatives love to stick it to Milwaukee, so who knows how this will end up.

But for now, there are a lot of very happy county employees.

The actual court ruling can be seen here.

Abele Foiled Again!

Last April, Chris Abele sent out over 200 letter to Milwaukee County retirees, threatening to rob them of their pensions because of mistakes the county had made decades before.  AFSCME retirees and activists tried to meet with him to discuss these letters, but Abele deemed them not worthy of his time.

Realizing that he put his pampered feet into it again, Abele then came up with a "compromise." Instead of robbing the retirees, he would just steal their pensions.  Some compromise.

Seeing that Abele was dead set on his immoral agenda, AFSCME then went to the Milwaukee County Board to argue their case.  AFSCME urged the board to adapt the common sense proposal made by the pension board that would resolve the issue regarding the pensions without causing harm to the retirees and without jeopardizing taxpayers by exposing them to expensive lawsuits.

Fortunately, the county board saw through Abele's scheme and chose the moral and intelligent path, and on Thursday, they approved the pension board's proposal with a veto-proof 14-2 majority.

AFSCME issued the following statement regarding this welcome action:

AFSCME Activism Stops Abele's Attack on Retirees

Milwaukee County Board members today delivered a stinging rebuke to County Executive Chris Abele, blocking his plan to take away retirement benefits from county retirees who participated in a pension program once promoted by the county.

Supervisors voted 14-2 for an alternative backed by the county’s Pension Board and AFSCME that preserved the benefits relied on by about 200 long-retired former county employees.

In April, Abele authorized sending a shocking letter to the retirees threatening to go after past, present and future benefits because the county had miscalculated payments for participants of a “buy back” program the county had once promoted.

Even though participants had done nothing wrong – in fact they had followed the county’s advice long ago -- Abele wanted to rewrite history. For some retirees, it could have meant losing their homes. Others could be forced back to work after years away from the workforce.

Abele bragged in April about how “aggressively” he would go after these retirees. After sending the terrifying letter, the county then refused to provide any additional information, leaving the threatened retirees hanging for months with no answers.

AFSCME reacted forcefully, organizing retirees and their supporters to protest Abele’s attack on financial security of people living on modest fixed incomes.

“This is a vivid illustration of a politician tragically out of touch with the day-to-day struggles of people who don’t fit into his tax bracket. The only time he acts with real vigor is to try to take something away from people who already have very little,” said AFSCME Council 48 Executive Director Boyd McCamish said at the time.

Working with the retirees and allies, AFSCME began exploring legal action while pushing for a simpler, more humane solution. Fortunately, County Supervisors listened – despite concerted efforts by Abele and his cheerleaders to misrepresent the facts and paint the retirees in the worst possible light.

“We deeply appreciate the courage shown by the County Board majority, which refused to be bullied into ruining people’s lives by a County Executive eager to score political points no matter who gets hurt,” McCamish said.

Unfortunately, Abele's avarice has blinded him from common sense and common decency. He said that he will veto this resolution for a very ironic reason:

That plan went nowhere, prompting Abele to say that the board's decision would "cost taxpayers at least $10 million, money we won't be able to use for important services like senior meal programs, or new bus routes or improving our parks."

So Abele's plan was to rob Grandma to feed Grandpa?

At least Abele is starting to pretend to worry about providing services.  He hasn't even been considerate enough to pretend to do this much when he gutted the mental health program, privatized courthouse security or sold county assets for pennies to the dollars so that his country club chums could get even more filthy rich.

If you listen careful, you can hear Abele stomping his silk-stocking feet in his ivory tower in yet another temper tantrum....

Abele Offers Compromise To Robbing Retirees - By Stealing From Them Instead

Last April, Chris Abele sent out more than 200 threatening letters to Milwaukee County retirees, stating that if they didn't pay the county large amounts of money in just days, he was going to go after their pensions.

Abele claimed that the retirees were improperly given too much money in their pensions - or that they shouldn't be receiving a pension at all - due to bad advice given to the retirees by the county itself.

Abele didn't care if it caused the pensioners to lose their homes.  He didn't care that he was ruining their golden years that they had worked for for decades.  He didn't care if it meant that people in their 70s, 80s or even 90s might have to go back to work just to keep themselves fed.

All he cared about was getting his grubby mitts on that money.

The union did what it was supposed to do, which is fight back against this unconscionable act.  But Abele was too afraid to meet with them and ran off and hid.

Even though Abele had promised to come out with more information in the near future, he has strung the retirees on for nine months, leaving them to twist in the wind with anxiety and fear for what would happen to them for the rest of their lives.

Finally, the boy king realized that he put his imperial foot into it and offered "a comprise."  Instead of robbing the retirees, he would just rob them a little less:

Abele is backing away from last year's move to seek millions of dollars in repayments. But going forward, he still wants to reduce future pension payments to some 200 retirees and future retirees because of ordinance violations in the lucrative pension program.

[...]

Under Abele's plan, pension reductions going forward could range widely, from $35 a month to $1,000 a month, according to preliminary estimates.

Beyond the cold, hard figures, there's this: A small number of retirees even would lose their pensions altogether unless they returned to work or found some other way to get pension credit.

That's because, without the extra years of service they purchased under the county program, they would not have qualified for a pension in the first place.

In total, nearly $26 million in overpayments and interest, plus another $10 million in future payouts, are on the line, according to estimates by county actuaries. If the county were to recoup or avoid paying that total, $36 million, it also would return $9 million that county workers paid to buy back the extra pension time.

It doesn't appear that the Milwaukee County Board wants anything to do with Abele's thievery. Chairwoman Marina Dimitrijevic laid it out short and sweet:

Dimitrijevic on Friday told the Journal Sentinel that Abele's plan, even with its alterations, is "immoral" and exposes the county to costly lawsuits.

"It seems unfair that an employer who made mistakes, now comes back and harms the security of older adults who served the public," she said.

Supervisor Theo Lipscomb also made a statement regarding Abele's boorish plan. The paper did not quote Lipscomb fully, but he did make his full statement available on his Facebook page:

The ordinance changes from the Pension Board fix the errors, have no increased actuarial cost and essentially no legal risk; Abele's proposal has an unknown actuarial impact, appears to be illegal and is out of touch with common sense fairness.

In other words, Abele doesn't even need to go after the retirees. The pension fund has accounted for the money, there is no extra cost to the board's plan and it is legally sound. Abele can't say the same for his scheme. For Abele to still insist on attacking the retirees shows exactly what a petty, vindicate and immature fool he is.

Abele defended his immoral plan with this (emphasis mine):

Immoral? Abele had this to say: "It is morally indefensible to me to not to recover as much as we realistically can and put those millions into the social services for the needy and vulnerable who need it now more than ever."

Abele's statement can be taken a couple different ways.  One, he is just blowing smoke and wants that money to cover for the sweetheart deals for his fellow wealthy elitists.  Or two, he is speaking honestly (as hard as that might be to believe), which means that his grand scheme for the county's mental health system is already running low on money and he wants to fill his budget holes with the retirees' pensions.

Either way, it stinks to high heaven and shouldn't be considered for even a second.

In fact, Abele should be offering profuse public apologies for even bringing it up int he first place, much less for the deplorable way he has handled this whole debacle.

Whether this whole fiasco is due to his daddy issues or not, Abele has shown himself incapable of finding his way out of a paper bag and definitely unfit for public office.

Chris Abele: Retirees Should Be Robbed And Not Heard

For decades, Milwaukee County, like many other places around the country, had a pension buyback program which allowed workers who had worked in part time or seasonal jobs, which are not counted towards a pension, to buy back time that allowed those years to be calculated in their pension figures.

In 2007, the Milwaukee Journal Sentinel, wanting to feed off of the residual anger regarding Tom Ament's pension scandal, did an investigation into this and found that 357 of the thousands of county workers took advantage of the county's buyback program.  They further found that sometimes this allowed the worker to get a bigger pension, retire early and get other benefits, such as free health care.

The county made a referral to the IRS due to concerns that some of the buybacks might have been afoul of the law, which would jeopardize the tax-exempt status of the county's pension fund.  The IRS has yet to respond.

In April of this year, Chris Abele, the Mitt Romney of Milwaukee County, decided that it was suddenly an emergency and that he had to take action, with or without legal advice.

So Abele sent out letters to 208 retired and current county employees, informing them that he was going to go after their pensions or delay their retirements.  However, he also told them that they were going to have to wait months until he decided exactly what he wanted to do to them, but when he decided whatever it was, they couldn't do a thing about it:

"I'm going to aggressively try to recover whatever I can," Abele said in an interview. He said he sympathizes with workers who might be affected because they followed advice from the county retirement office in how they paid for purchased pension credit for long-ago stints of county employment.

It should be noted that the timing of when he made his decisions is about the time he comes out with his 2015 proposed budget. In other words, he is planning to help balance his austerity-driven budget on the backs of the retirees and soon to be retirees. After all, the less money they pay out in pensions, the more that will be left to be pillaged as he continues his agenda of dismantling county government.

Needless to say, the unions were upset and angry about this sudden attack on the retirees, who had left the county after a lifetime of service and with an contract that they were to receive very specific benefits as laid out by the county. AFSCME District Council 48, which represents Milwaukee County employees, issued a scathing statement about Abele's anti-retiree stance:

Boyd McCamish, Executive Director of AFSCME District Council 48, said today that the Union is investigating the possibility of legal action against Milwaukee County and the County Pension Board if the County tries to take back pension benefits previously received by the Union’s members.

McCamish made the announcement after County Executive Chris Abele had authorized the County to try to seize benefits previously paid out because of purported “errors” the County made in calculating pension benefits for former County workers.

McCamish said that the Union’s members relied on the County’s advice and calculations and that the County’s actions appear to be punishment of Union members for the mess that the County’s administrators and advisors created.

“Whenever the County or its managers screw up, the workers get hurt even though they are totally blameless. The Union will not stand by and let its members suffer because of the mistakes made by the County, the Pension Board and their so-called professional advisors,” McCamish said.

The Union already has heard from members who have been told they could completely lose their pension and others who face significant benefit reductions. “This is shocking and terrifying news that could dramatically alter lives. People could lose their homes. And the news comes out of the blue in a vague and threatening letter from the county. It’s unconscionably cold and clueless,” McCamish said.

McCamish said that members of District Council 48 who received a letter from the County threatening to take away pension benefits should immediately contact the Union, which has retained Attorney Mark Sweet to investigate the possibility of a legal action against the County and the Pension Board.

“This is a vivid illustration of a politician tragically out of touch with the day-to-day struggles of people who don’t fit into his tax bracket. The only time he acts with real vigor is to try to take something away from people who already have very little,” McCamish said.

This stance was backed up by the union's labor lawyer, David Sweet:

AFSCME attorney Mark Sweet said the county can't back out of promises it made to employees going back decades. The attempt by the county to recoup pension payments is morally and legally wrong, Sweet said.

In what has become the norm for Abele, who prides himself on accountability, he blames the unions for the anxiety, stress and panic that he caused.  The panic and anger had nothing to do with Abele's decision to go after the retirees, endangering their ability to support themselves, maintain their homes or afford little things like food and medication. It was obviously all the unions fault:

Abele spokesman Brendan Conway said union comments were creating "an unnecessary panic."

"Employees and the public deserve clear, responsible and transparent answers," Conway said. The county's retirement office is working to establish how much retirees have to give back — or how much longer some active workers may have to wait to retire — a process that could take several months.

Ah, so the people "deserve clear, responsible and transparent answers," but don't expect the county to give those answers until they know how much they need to fill Abele's budget holes, caused by things like Abele setting the courthouse on fire.

The unions weren't going to settle for the mush-mouthed inanities that Abele was trying to push on them.  They wanted answers.

So on Thursday, some of the retirees who received Abele's threatening letters went to the Milwaukee County Courthouse to meet with Abele to get those answers.  However, Abele did not want to meet with them or give them the answers they deserve.  Instead, he sent out a PR aide, Rayna Andrews, to give them the round around:

Even though Ms. Andrews had explained that Abele was much too busy to meet with the retirees, they had seen him peeking into the room several times.

It should also be noted that Ms. Andrews also tried to convince the retirees that they needed to resolve their issues on a case by case basis instead of as a group.  She did not have an answer for them when they pointed out that they had already tried this.

The group waited for over three hours for Abele to give them a few minutes, but he never showed them even that much courtesy.

At the end of the day, the retirees headed to Bay View, where Abele was supposed to appear at the grand opening of a dog park.  Abele decided to bail out of his commitment because he is so averse to being held accountable.

With Abele again dodging the retirees and his responsibilities, the group did what any good union workers would do...they educated the public to what was happening:

It's not only the retirees that are asking for answers from Abele and his staff.  County Board Supervisors want answers as well:

Milwaukee County Supervisors David Cullen and Willie Johnson, Jr., have asked the Human Resources Director to appear before the Finance, Personnel and Audit Committee on Thursday, May 15 at 9 a.m. to explain the pension/buyback issue.

“This is a serious situation and there are many unanswered questions,” said Cullen, co-chairman of the County Board’s Finance, Personnel and Audit Committee. “There is $11 million at stake and the public deserves an explanation. The Committee wants to help taxpayers understand how this situation occurred. ”

Johnson co-chairman of the committee, said: “Inasmuch as it has been reported in the press that $11 million has been paid after the County Board passed a resolution stopping improper pension buy-backs in 2007, I believe there should be an accounting of what happened from the Director of Employee Benefits.”

One thing that concerns me that I have not seen anywhere is what would happen to the money that the workers spent on getting their buybacks.  No one has even suggested that the county should offer this money back - with interest.  That is thievery.

It is time and beyond for Chris Abele to grow up and start acting like an adult.  He needs to take ownership of his screw ups and find ways to resolve them without hurting the taxpayers and the current and past workers.

As Attorney Sweet said, what Abele is attempting to do is illegal and morally wrong.  Abele is not able to take back what has been given, especially when it was the county that was in error.

The workers took their deals in good faith.  If it was found that 10 or more years later that the deal that the county offered was in violation of their own rules, they simply have to eat the cost.  They cannot go back retroactively and take something that they had given out by mistake.

Furthermore, to tell retirees that he was going to take away their savings and reduce their pensions, but he won't say how for months is simply a cruel and callous thing to do.  These people had worked their whole lives for the county and to be treated this way is inexcusable.

Abele needs to owe them an apology for his boorish, bullying behavior.  Then he owes the taxpayers an apology for his ineptness and his needlessly exposing the county to yet another massive multi-million dollar lawsuit.

Tom Ament's Legacy And Legacy Costs

Tom Ament

On Tuesday, the news broke that former Milwaukee County Executive Tom Ament passed away from lung cancer.  He was 76 years old.

Ament had done some good things during his time as county executive, most notable ushering in the Calatrava addition to the Milwaukee Art Museum.

Ament had also done many bad things during his term.  He closed down Doyne Hospital. He gladly handed over the child welfare system to the state, a move that has cost taxpayers hundreds of millions of dollars since.  He also pushed for the then new Miller Park, which came with a sales tax that is now projected to last more than twenty years.

But the one thing that will be mentioned in any story regarding him and his passing his his role in the infamous pension scandal.  Sadly, due to the passage of time and the political spin people want to put on it, the truth of the story is usually glossed over and even completely misrepresented.

The worst reporting of Ament's legacy is ironically by Bruce Murphy, the reporter who had originally broke the story more than a decade ago.

Murphy claims that Ament's pension scandal is "arguably the biggest political scandal in the city’s history."  Well, outside of the fact that is the county and not the city, I think that the hands down winner as the biggest scandal in Milwaukee County history would be Walkergate and how Scott Walker used county staff and equipment to run not only his campaign but the campaign for his desired lieutenant governor, Brett Davis.

Murphy also mistakenly reports that the enhanced pension deal was to attract workers.  That's not exactly true either.

In the late 1990s, the nation was experiencing an economic boom.  Things were going so well that many county workers were leaving for the private sector where the pay was so much higher.  The pension enhancements were designed to retain workers by getting them to work until at least 2004, the year that the enhancers would reach their maturity.

At the time, it was the fiscally conservative thing to do.  The pensions fund was replete due to the good economic conditions.  And it was easier to enhance the pension than it was to give pay increases, which would have put an extra burden on the tax levy.

What Ament, the actuaries and the lawyers that approved the plan did not count on was the severe economic downturns brought on by the Bush/Cheney administration and by the attacks of 9/11.

While Murphy reports that the pension deal has cost taxpayers hundreds of millions of dollars, it should also be noted that the Great Recession of 2008 cost the fund more than $350 million, all of which it recovered in a few weeks.

Ironically, if it weren't for the advice of the "experts," who just happened to be the same sort that tanked the economy, the pension fund wouldn't have been depleted at all.

Murphy even misreports what the pension deal even did:

The pension gave county veterans like Ament a 25 percent bonus in their pension plan. Prior to that retirees could collect up to 80 percent of their final average salary for life, but this gave them the opportunity to collect an unheard of 100 percent of their final average salary. On top of that, they could collect a special lump sum or “backdrop” payment, which was lucrative indeed. To date, more than 1,700 county employees have collected this benefit. Some 740 people have gotten at least a $100,000 lump sum benefit, 255 have gotten at least $250,000 and 40 received at least $500,000.

It should be noted that not all county workers were eligible for the bonus. It only applied to the workers that had been there for a long, long time. It should also be noted that the lump sum pay out, or backdrop if you will, was not "on top of" the pension. All the backdrop is is a different way to pay out the pension. Workers that took the backdrop pay out up front had a smaller monthly pension.

While I do not dispute Murphy's numbers on how many workers collected what, it needs to be pointed out that the vast majority of the large pay outs went to non-represented employees and was something that Walker and his successor, Chris Abele, could have stopped at any time.  Most county employees that retired received much smaller lumps sums plus the smaller monthly pay out.

It should also be noted that the hit to the taxpayers was increased by Walker's refusal to make full payments after the Republican-engineered economic downturns.  Furthermore, Walker insisted on doing a perilous pension obligation bond scheme - and idea supported and pushed for by Abele and the rest of the Greater Milwaukee Committee.  This locked taxpayers into making payments for decades, whether they were needed or not.

I would be remiss if I did not also point out that the actuary agency, Mercer, was successfully sued by the county.  Mercer ended up paying $45 million to the county.

I would also be remiss if I did not point out that Walker was the one that refused to sue the Reinhart Boerner Van Deuren  law firm, which approved the pension plan, because of political considerations.  Rick Graber, then head of WISGOP, worked there and Walker was trying to curry for his first run for governor.

Even though Ament might be best known for his role in the pension scandal, that in itself is just a symptom of his real legacy and the high costs that have come from it.

Ament was the first of three consecutive "fiscally conservative" county executives that have cut services, cut corners and cut themselves breaks, all to the detriment of the citizens and taxpayers of Milwaukee County.
Although Ament was the only one to do so and was honest about it.  Both Walker and Abele have used Ament's pension deal as their excuse for their austerity, even though the results are the same.

A Contract Is A Contract

Over the weekend, there was a flurry of news coming from the State of Michigan, where Governor Rick Snyder is making the first power play for the pensions of Detroit workers.

Stemming from that is this wonderful article from Dean Baker, co-director of the Center for Economic and Policy Research, which gets right to the issue:

It is striking that so many people in the media are acting as though this clause does not exist. Part of the story is undoubtedly a belief by many reporters that Detroit workers got overly generous pensions. The pensions of Detroit’s workers are almost certainly better than private sector pensions, which have been rapidly disappearing. However, research shows that most public sector workers incur a wage penalty relative to private sector workers with the same education and experience. Better pensions and other benefits essentially even the score.

But even if Detroit’s workers got a good deal with their pay and benefit package, so what? A contract is still a contract. Workers put in their time in exchange for a specific package of pay and benefits, how can the government arbitrarily change the terms of the deal after the fact.

There are businesses that end up getting very good deals from the government all the time. How often does a state or local government end up selling a parcel of land for a price that turns out to be hugely below its true value. Or they may give tax concessions to lure businesses that prove to be overly generous. It looks like the City of Chicago made a really bad deal in leasing its parking meters to Morgan Stanley for three quarters of a century. Does Chicago get to just rewrite the terms of the contract?

In these cases involving businesses, somehow a contract is a contract, end of story. The relationship is sacred and no one suggests changing the terms after the fact. However, in the case of the pensions for city workers, these are just office workers, custodians, or garbage collectors. The media would have us believe that contracts with these sorts of people aren’t real contracts. If they prove inconvenient, then they can be changed.

While that may be the view that the media is trying to push, the rest of us should insist that the law and the constitution be respected. Detroit’s city workers have as much right to have their contracts respected as the Wall Street bankers making millions and billions off contracts that are often far more questionable.

This is class war at its ugliest. The elites have to learn that they don’t get to change the rules as they go along, if they want their contracts to be respected they will have to respect contracts that protect working people as well.

And even though I shouldn't need to remind the gentle reader, don't think for one minute that Scott Walker or Chris Abele aren't already looking at doing something similar with our pensions.

Brother can you spare a dime? Or perhaps $200 million?

If you had the chance to invest $200 million of your pension trust fund into a quasi-public economic development agency, would you do it?  What if that agency had a proven track record of epic levels of mismanagement, including losing track of a $56 million loan portfolio?  Of course not.  Thankfully, neither did the State of Wisconsin Investment Board.

Documents obtained by Wisconsin Reporter show that Reed Hall, CEO of Walker’s Wisconsin Economic Development Corporation, recommended that the SWIB loan $200 million to theWEDC. 

"Walker serves as chairman of the WEDC board of directors.  Hall said WEDC would use SWIB’s cash to promote business growth through taxpayer-subsidized government investments in Wisconsin companies.  In a letter to SWIB, Hall explained that he was turning to the pension fund because his start-up program would likely find it harder to tap private investors “due to a lack of demonstrable track records.”

Oh, there's plenty of demonstrable track record at the WEDC.  The problem for them is that it demonstrates rank incompetence at nearly every level.  The problems with the WEDC are myriad and have been covered here before.  Hall certainly has a challenge ahead.  How do you convince private investors to invest their money in an agency that has demonstrated nothing but failure, whose funds will be run by largely first-time fund managers, in a state that has failed miserably at attracting economic development?  Well, you don't.  If you could, Hall wouldn't be hitting up the SWIB for a fix from the pension fund.  These people need to take some personal responsibility and stop looking for a handout.  Isn't it about time the takers stopped begging from the makers?

What They Call Saving Money I Don't Understand

In 2000, then Milwaukee County Executive Tom Ament and his administration were able to ram through a scandalous pension plan.  The plan, which was done on the pretense of retaining more senior workers and their institutional knowledge.

What is really was meant to due was enrich the pockets of Ament and his crew, who were planning on serving their last term in office and then cashing in on their retirement.  Ament was never able to cash in after all due to being forced to resign in the face of a recall.

It should be noted that the recall also took down many good county supervisors, even though later evidence would show that they were duped into thinking that it did not have the economic impact that it did.

(It should also be noted that the pension plan would have not had the problems it did if it weren't for the stock market crashing during the Bush/Cheney administration.  But that's not something the media, who loves to sensationalize the news, wanted the public to know.)

There were many factors to the pension scandal, but the two largest ones were a very generous pension enhancer for people hired before 1992 and the installation of an overly lucrative backdrop calculator.

The pension enhancer reached maturity in 2004, which led to a large exodus of county workers who only stuck around to cash in on this benefit.

The backdrop created the greatest furor with some county employees taking as much as a million dollars in their lump sum payments.  (Another thing the media doesn't like to mention is that most of these lucrative pay outs went to non-union workers.  That means Scott Walker and Chris Abele could have done something to stem this flood at any time, but chose not to for reasons known only to themselves.)

The county has looked and looked again at ways of dealing with the backdrop issue, with the legal opinions always coming back to the fact that the pension drop, whether they agree with it or not, is a vested property right and could not be taken away from existing workers, only future ones.

In 2006, the county passed a law that excluded anyone hired in 2006 or later from receiving this benefit.

Now enter Chris Abele, current county executive.

Abele was determined that he was going to do what couldn't be done and searched high and low until he found a law firm that would tell him what he wanted to hear. He got someone to say that there is a way to circumvent this where they can put a stop to future earnings.

This past Thursday, the Milwaukee County Board voted 15-3 in favor of capping the backdrop payments.

Supervisor Theo Lipscomb, who authored the resolution, had this to say on the vote:

Milwaukee County Supervisor Theodore Lipscomb, Sr., said today he is thankful the Board has done right by taxpayers by passing the resolution to “Cap the Backdrop,” which has a $15 million present value to the pension fund.

“I thank the Pension Study Committee for addressing this issue at its meeting last week,” said Supervisor Lipscomb. “Today, the Board’s action sends a strong message to taxpayers, who deserve trustworthy leadership and smart stewardship of shared resources.”

The vote in favor of reform was strong, with more than two-thirds approving the resolution (15–3).

The proposal authored by Supervisor Lipscomb does not take away any pension benefits already earned but does limit future accrual of the backdrop.

Supervisor Lipscomb first introduced his proposal in the fall of 2010 through a budget amendment, seeking further legal and actuarial analysis of the strategies to limit the pension backdrop.

Today’s action is the latest in a series of major changes adopted by the County Board to strengthen the pension fund and to save money.

Likewise, Supervisor Deanna Alexander, who doesn't know where her district is but does know where the Chick-Fil-A is, had this to say:

Milwaukee County Supervisor Deanna Alexander is applauding the Board for its passage of the “Cap the Backdrop” resolution, which stands to save taxpayers $1 million in pension contributions in 2013 alone and more than $15 million overall.

“This policy change successfully balances several goals: protecting a valuable employee benefit, saving the Milwaukee County pension system from bankruptcy and remaining cognizant of cash-flow in County operations to help ensure we continue to provide essential services,” said Supervisor Alexander.

The proposal authored by Supervisor Lipscomb and co-sponsored by Supervisor Alexander limits future accrual of the backdrop, which is an employee’s option for a cash payout of their pension immediately upon retirement, but does not take away any pension benefits already earned.

Supervisor Lipscomb first introduced his proposal in the fall of 2010 through a budget amendment, seeking further legal and actuarial analysis of the strategies to limit the pension backdrop.

The current resolution was laid-over several times in the Finance, Personnel and Audit Committee and went before the Pension Study Committee last week. By ordinance, the Committee must issue a report before the County Board can enact changes to the pension system.

Chris Abele, who is still smarting from learning that becoming county executive does not make him omnipotent, couldn't even enjoy the news without getting whiny:

"I'm frankly embarrassed that it's taken so long," Abele said.

Delays by the board in advancing the measure over the past several months were attributed to a need for additional study - unnecessary "for something that's so freakin' obvious," Abele said.

It took the board much less time to increase property taxes through changes to his 2013 budget, the county executive said.

"It seems like there are some decisions that get made awfully quickly and others that apparently take ridiculous amounts of time," he said.

Now, I can support about saving taxpayer money, but I wonder if this is actually going to do that or if this is just a lot of expensive political posturing, like we saw and still see from Scott Walker.

When the county dropped the pension multiplier from 2% to 1.6%, they used the same argument that it did not take away existing benefits and only altered future earnings.

The nurses union sued the county on this and won. The county had recently decided to appeal this ruling, against the legal advise they were given. Despite the appeal, I know that the other unions have either already filed their suits or about to.

I would suspect that the action the county has taken will end up with the same results. I know that the union will be suing the county on this one as well.

Given the history of these sorts of cases, I think it was awfully premature for our elected leaders to be making such rash claims.

There is a strong likelihood that the county will still be on the hook for that $15 million "saving," plus interest, plus legal costs.

If Abele and the county board were really interested in saving money instead of just showboating and grandstanding, they would take advantage of the demise of Act 10 and return to the bargaining table. I'm sure that both sides have much they're willing to give up for what they want.

The problem is that Abele has no interest in saving taxpayer money, but in trying to dismantle the county, no matter what it cost the taxpayers. He will try to drag out the inevitable lawsuit until it gets to point of breaking the county.

Pension Raiders Are Preparing To Attack

Earlier this week, the long awaited report on the state pension system finally came out. Lo and behold, the pension system was found to be strong and it was advised that no changes be made.

Scott Walker made a huge announcement that he currently had no plans to make any changes to the system. This was dutifully echoed by the Koch employees with a "See? Nothing to see here!" approach.

I warned the gentle reader not to their guard down:

I need to point out that there is no way in Fitzwalkerstan that Walker would not have let this release be issued, much less stand pat, unless he approved of it first.

It clearly indicates that the Walker administration will not be satisfied to leave it alone for long.

Indeed, history shows that Walker has an infinity to mucking up pension systems and that he has telegraphed his intention to do the same with the state's system.

Perhaps feeling the heat from the knowledge that Walker's day of reckoning with John Doe approaches nigh, the corporate interests which support Walker have no interest in waiting around to get their hands on the fully-funded pension system.

Indeed, the Koch-sponsored and directed propagandist group Wisconsin Reporter is laying the groundwork which will serve as the base for their attack on the pension system. Just days after the Pew report declared the pension system strong, they come out with this:

State officials might want to take a second look at the highly touted Wisconsin Retirement System.

The costs and transparency of state and local pensions may soon be on the rise in Wisconsin and across the nation, driven up by proposed changes from Moody’s Investors Service, the global credit rating agency.

The changes could mean that Wisconsin Retirement System is underfunded by nearly $30 billion – and that could ultimately drag on government bond ratings.

Among other adjustments, Moody’s proposes to standardize the public pension discount rate (or rate of return) at that of a high-grade, long-term corporate bond – currently yielding 5.5 percent. The changes will bring public pension reporting in line with the private sector, which uses the same corporate bond rate for valuing its liabilities.

States currently value their pension obligations based on how much they assume assets will return over the long haul. Wisconsin now uses a 7.2 percent discount rate.

The difference between 7.2 percent and Moody’s proposed standardized rate could mean a gap of billions of dollars in investment expectations.

Now, of course, the propagandists are expecting the people to take this as gospel truth, even though Moody's doesn't have the best track record, giving "the highest 'aaa' ratings to "toxic" instruments such as collatoralized debt obligations (CDOs) that later turned out to be very low quality debt instruments. The high rating enticed institutions to purchase these instruments, leading to defaults that spread throughout the financial system."

To bolster this hyperbolic claim, we can soon expect that the Franklin Institute (which oversees Wisconsin Reporter), the MacIver Institute, WPRI, squawk radio and the other propagandists to start parroting this doom and gloom forecast. When they repeat the lie enough, it will give enough faux credence to the lie that the corporate media will pick it up and run with it.

And thus the stage will be set for Walker and his Republican cronies to feign that there is a problem and do their full on assault on the pension. You can count on them using this excuse to try to convert the pension to a 401K and to raise the costs so high that public sector workers will be forced into the lower quality plan designed to channel the money to Wall Street.

Walker would have probably already called for a special session "to focus like a laser on job creation" in order to ramrod through the pension raid if they were foiled by the people in Racine who were able to overcome all the hanky-panky the Republicans had pulled in the recall election, knocking out the disgraced and disgraceful Van "Double Dipper" Wanggaard.

I still wouldn't put it past the Republicans to wait until there is a lull and call an emergency session during the summer lull in the hopes to catch enough Democrats unprepared and thus unable to exert their majority power in the Senate.

I've said it over and over, with Walker and his motley gang of thugs, there's more. There's always more.

It's up to us to be ready for it and squash it before it starts.

Walker Won't Touch Pension System....Not Yet Anyway.

The long awaited study on the Wisconsin Retirement System has finally been released. And to no one's great surprise, it found that the current system is strong and the best that there is, even though Scott Walker and his Republican henchmen in the state legislature were hoping for different results.

So that means that Walker won't touch the pension system, right? Well, yes, if you're the kind to believe the pap that comes out of squawk radio and Faux News or if you're angling to be David Koch's cabana boy.

In order to test that hypothesis, the best place to start is with what Walker had to say about the study (emphasis mine):

The report released today confirms that both taxpayers and pensioners are getting a great deal with the WRS. Compared to other states, Wisconsin consistently rates among the best performing public pension systems in the country.

Both the State of Wisconsin and WRS must be fiscally sustainable moving forward to ensure that we can meet our outstanding benefit obligations, which I am confident we can do. The long term structural changes we made last year will help ensure that the state is able to fulfill the commitment it has made to pensioners.

I want to be very clear: I am currently not planning to make any substantial changes to the WRS. However, I will continue to work to ensure that the WRS is fiscally sustainable for both taxpayers and retirees.

Well, he certainly leaves himself a lot of wiggle room in between all those code words. But it is not conclusive in itself one way or the other as to what his true intentions are.

Ah, but we have an assist by Walker's right hand man, Department of Administration Secretary Mike Huebsch. His statement regarding the study and the retirement system is a lot more ominous (again, emphasis mine):

DOA Secretary Mike Huebsch stated, “Wisconsin will continue to monitor the health of the current system. It is our duty to make sure Wisconsin taxpayers know their tax dollars are being invested efficiently and state employees know their retirement plans are being well managed.”

The study also evaluated the potential effects of establishing an optional Defined Contribution plan. The findings show a Defined Contribution plan would provide zero risk to taxpayers and provide the portability necessary for a highly qualified and robust 21st century workforce. The Defined Contribution plan would also place an emphasis on individual employee investment choices. However, the study notes the professional management of all pooled assets boosts the current Defined Benefit plan.

“The state will continue to look at potential options for reforming the current system because the workforce of the future may not look like our current workforce,” Secretary Huebsch continued. “Taxpayers deserve to have the best and hardest working employees and a 21st century workforce may prefer portability of benefits and freedom offered by other retirement options.”

In addition, the study reviewed an option for employees to opt-out of required contributions and receive the money purchase annuity. The study raised concerns about the impact of this option on the current Defined Benefit plan, since it would reduce overall contributions to the current system’s cash flow position, which may negatively affect contribution rates for those in the current Defined Benefit plan. This option could also raise qualification issues with the IRS for the current plan.

Given the current financial health of the current system, at this time, the study recommends against implementing either the Defined Contribution or the opt-out option for employees.

I need to point out that there is no way in Fitzwalkerstan that Walker would not have let this release be issued, much less stand pat, unless he approved of it first.

It clearly indicates that the Walker administration will not be satisfied to leave it alone for long.

Indeed, history shows that Walker has an infinity to mucking up pension systems and that he has telegraphed his intention to do the same with the state's system.

As Milwaukee County Executive, he repeatedly and willfully failed to properly fund the pension system (which is separate from the state's system). This quickly led to a debt to the pension fund which was becoming untenable.

To resolve this self-created crisis, Walker proposed a ponzi-like scheme of selling pension obligation bonds. The chosen company to do this was Bearns-Sterns of Chicago. Just because his friend and campaign donor Nick Hurtgen was Vice-President of the company had nothing to do with it.

This proposal, to Walker's chagrin, was shot down in a referendum put to the voters in Milwaukee County. Not to be deterred, Walker still did a pay for play by doing some bid rigging and giving a $300,000 contract for debt restructuring to Hurtgen's company, just about the same time Hurtgen held a fundraiser for Walker which netted $25,000.

Unsurpringly, Hurtgen was later indicted for another pay for play scheme.

But this still left the mess that Walker created in the pension by underfunding it. This was only made worse when the markets crashed at the beginning of the Bush/Cheney recession.

Ha ha! Made you think your
pension is safe with me!

Walker again tried the pension obligation bond scheme. This time he was successful even though the whole thing seemed, and still seems, to be rather sketchy on how well it would work.

Leading up to the 2010 elections, there was a lot of fear that Walker would want to dip into the pension fund. After all, there is a helluva lot of money in there that could be going to benefit and even further enrich his filthy rich campaign donors, instead of being used as the deferred compensation for the workers, who have paid for it in full.

This fear wasn't necessarily misplaced or overblown when one considered what the Bradley Foundation-funded staff at WPRI had to say about it:

Candidate Walker is not the only one taking aim at worker pensions. Earlier this year, former state DOA Secretary George Lightbourn, who now heads the corporate-funded conservative Wisconsin Public Research Institute, described the Wisconsin Retirement System (WRS) as having “overstayed its welcome” and “far out of the mainstream”. He said Wisconsin’s next governor should “make it a priority to eliminate the insularity that has defined the WRS.” WPRI’s agenda is to privatize the WRS and shift it to a defined contribution plan, transferring billions in Wisconsin investment earnings to the Wall Street banks and investment houses that destroyed our economy and the retirement security of the millions of American workers whowere shifted to defined contribution plans over the last 20 years.

Lightbourn’s group published the study showing that the average worker earning $48,000 may be eligible to receive a monthly pension of $1,712. The same study showed that, in contrast, a private sector worker who earned $70,000 would getapproximately $1,300 a month in retirement. Lightbourn noted that the economic downturn has reduced private sector pensions and that public employee pensions are somehow unfairly insulated from the recession. Like Walker, Lightbourn argues that all public sector workers ought to pay more of pension costs, and that state and local governments should use the savings to offset budget deficits.

The observations of the WPRI called attention to a crisis in the lack of retirement security for many, if not most, American workers. Attacking the WRS misses the point. ETF Secretary Stella noted that there is a retirement crisis in this country,“but it’s not a crisis of having too much income…it’s so disappointing to see the WPRI advocate for slashing benefits for the men and women who protect our communities, teach our children, and serve the public in so many different ways rather than offering solutions to make sure retirement security is achievable by all. We ought to be talking about improving retirement security for everyone in Wisconsin rather than reducing it for some.” We could not agree more. AFSCME,along with other unions, supports enhancing retirement security for all workers.

Indeed, a similar reason not to take Walker's words at face value is the simple fact that the whole idea of attacking public pension systems was one of the evils let loose by the Pandora Box known as ALEC.

And even as Walker is saying he won't touch the pension system - for now - well, even that is a lie.

Due to "an oversight" in Act 10, there is suddenly a need to contribute another $87.5 million to the fund. And that money is going to come from the workers who already took a massive pay cut.

I'm sure that all this sounds real good to the Kool Aid drinkers who listen to squawk radio, watch Fox News or work for the Kochs.

But the sad fact is that it's not only the public sector workers' money that would go to feed the monsters of Wall Street, but the taxpayers' money as well. After all, defined benefits plans like the one the state has right now is almost twice as cost effective as the defined contribution plans they want to force on us.

Then again, there has been an abundance of evidence that Walker's agenda is not one to protect the workers and the taxpayers, but how the best to get every last cent from them and give it to the ones he really cares about - the ones that bought him the governorship and who will, he hopes, by him the presidency some day.

Scott Walker's Expensive Entitlements

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.

- Abraham Lincoln, 1861

Elizabeth DiNovella, who had been covering CPAC (Conservatives Planning Absolute Corporatism) and writing about it at Dane 101, also gutted it out by listening to Scott Walker's address to the convention. In her piece, she quoted Walker's take on collective bargaining:

“Collective bargaining is not a right. Collective bargaining in the public sector is an expensive entitlement,” he said. This line got the biggest applause of the night.

When I read that, I damn near did a spit take on my monitor.

There is so much wrong with that short blurb that it will never be right.

Collective bargaining is a right, and that right might very well be extended into the public sector, as I wrote about nearly a year ago:

The ruling by U.S. District Judge Ronald Guzman affirms that collective bargaining rights cannot be overturned by governmental edict. Guzman told the Legislature “it had no business trying to interfere with collective bargaining” according to Marvin Gittler, an attorney representing Local 727 of the Teamsters.

Guzman held that the National Labor Relations Act preempts the Legislature from dictating terms for unions working at McCormick Place. This ruling is similar to the finding of The International Commission for Labor Rights, which has said, in part: The ICLR identified the right of "freedom of association" as a fundamental right and affirmed that the right to collective bargaining is an essential element of freedom of association. These rights, which have been recognized worldwide, provide a brake on unchecked corporate or state power.

Now, before anyone points out that the NLRA is for private sector unions, read on:

While the NLRA covered US employees in private employment, the law protecting collective bargaining in both the public and private sectors has developed since 1935 to cover all workers "without distinction."

The other problem with Walker's false statement is what he is calling an "expensive entitlement." He's saying that the people of Wisconsin no longer should be afforded things like weekends off, not having their kids working in sweat shops, eight hour work days, forty hour work weeks, holidays off, living wages, vacations, equality in the work place or safe working conditions.

In other words, he wants to weaken the unions, both private and public, to help maximize the profits of the corporate interests who have been funding his campaigns and who, he hopes, will buy him the Presidency of the United States.

But it doesn't end there, gentle reader.

Walker has also been bantering about the phrase "legacy costs," which is something he started in Milwaukee County, with the aid of the plutocrats at the Greater Milwaukee Committee, an old boys (and girls) club for Milwaukee's wealthiest people, who see Milwaukee has their toy thing.

By "legacy costs," Walker is speaking about health care insurance and pensions.

Health care costs are through the roof, especially in Southeast Wisconsin, which has one of the highest rates, if not the highest, in the nation. And workers should carry their fair share of the costs. But when CEOs of insurance companies and health care agencies are getting compensated in the millions of dollars, there is an obvious problem which needs to be addressed.

Of course, it is Walker and his ilk that are opposed to fixing the system. Guess who are big donors to their campaigns.

It should be noted that Walker, if the reader will remember, was swept in as Milwaukee County Executive on the heels of a pension scandal enacted by his predecessor, Tom Ament. The gist of the scandal is that it provided a super enhancer to the pension of people that had been with the county for a long time. It also included a generous backdrop that would allow retirees to take a large lump sum at the time of retirement and a smaller monthly pension payment. Some county employees walked away with a million dollars when they retired. Ironically, most of these big money beneficiaries were non-represented employees. That means Walker could have stopped it at any time, but chose not to.

But of course he didn't want to stop these payments. One, it was a great political hammer to wield. Every time Walker was caught with a budget problem (which he usually contrived), he'd just blame the pension scandal, regardless of how long ago it was. Secondly, he was appointing most of his cronies to these positions and wanted to make sure they were rewarded. (Here's food for thought, Darlene Wink, who was convicted of only misdemeanors, is eligible for her pension.)

Oddly, the pension fund, pre-Walker was sufficient that it could have covered the enhanced pension pay outs. However, the two recessions during the Bush/Cheney administration took a big bite out of it, like it did for most people. Unlike the people that had 401(k)s, the public sector had their pensions protected for the most part.

In spite of the need for Milwaukee County to contribute to the pension fund for the first time in years, Walker, as county executive, chose to short change what the county owed to the fund and instead use it to reward campaign donors with sweetheart contracts. By shorting the payments to the fund, Walker only exacerbated the situation. It would be much akin to not making the minimum payment on a credit card. Not only do you still owe the balance, and the next payment, they add on fees and interest to make the next payment exponentially bigger.

To deal with this self-constructed problem, Walker tried to get a pension obligation plan pushed through. The wheeler and dealer behind this plan was a man name Nick Hurtgen, a GOP operative who eventually got busted himself in a kickback scheme. Fortunately, the County Board preempted Walker's move by making it a referendum question which the voters killed.

Walker did give Hurtgen a $300,000 contract to restructure the county's debt. In return, Hurtgen gave Walker a $25,000 campaign fundraiser.

Now Walker wants to convert the state's pension system, which is a defined benefit system and is fully funded and in good shape per all reports, into a defined contribution system. (They are looking at trying to do the same thing in Milwaukee County, even though there is no proven need for it.)

This is, as you might suspect, preposterous.

First of all, as I mentioned above, the pension system is fully funded and not a problem for tax payers.

Secondly, Walker can't complain about expenses, since his forcing public sector workers to "pay more" for their pensions is nothing more than a scam, since public sector workers are already paying 100% into their pensions:

Out of every dollar that funds Wisconsin' s pension and health insurance plans for state workers, 100 cents comes from the state workers.

How can that be? Because the "contributions" consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.

Thus, state workers are not being asked to simply "contribute more" to Wisconsin' s retirement system (or as the argument goes, "pay their fair share" of retirement costs as do employees in Wisconsin' s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.

By implementing Act 10, Walker is docking the workers' paychecks, because he can, and diverting the money.

But that diversion isn't enough for him or his campaign contributors. They want more. Hence the idea of converting, or fixing, the system, even though it's not broke or broken.

But while it might be sound like a good plan to your average squawk show listener, the reality is that it would not only stick it to the workers, but also to the taxpayers:

And governments are concerned about delivering on the promises that they have made to their citizens and to their employees as tax revenues shrink amid a weakening economy. In this environment, some have proposed replacing traditional defined benefit (DB) pensions with 401(k)-type defined contribution (DC) retirement savings plans in an effort to save money.

But decision-makers would be wise to look before they leap. To deliver the same level of retirement benefits, a DB plan can do the job at almost half the cost of a DC plan. Hence, DB plans should remain an integral part of retirement income security in an increasingly uncertain world because they offer employers and employees the best bang for the buck.

So why do it if it's not good for anyone? Well, it does benefit the fat cats on Wall Street, who in turn, reward Walker for being a good employee for them.

The real kicker of this is, as I just pointed out with the above cited passage, is that if Walker gets his way, it's going to really stick it to the people of Wisconsin.  Why? Well, in Walker's own words, in sworn testimony given before a Congressional committee:

After an unresponsive answer by Governor Walker, Kucinich pressed, “Did you answer the questions? How much money does it save, Governor?” 

“It doesn’t save any,” admitted Governor Walker. 

Kucinich then requested permission to enter into the record a letter from the State of Wisconsin’s Legislative Fiscal Bureau (page 3 specifically), a nonpartisan state budget agency that confirmed Governor Walker’s efforts had no effect on the state’s budget. 

“The Bureau was asked to identify provisions in the Governor’s bill that are non-fiscal; non-fiscal policy items that have no state fiscal effect. This letter confirms the obvious; that Governor Walker’s effort to repeal the rights of state workers is a non-fiscal policy item. No effect on the state budget shortfall,” said Kucinich.

The only expensive entitlements involved here are the ones that Walker wants to take with our money so that he may give it to his campaign contributors and cronies.

Milwaukee County Pension System Is Under Attack

Three Milwaukee County supervisors - Joe Rice, Paul Cesarz and Joe Sanfelippo - are trying to do a money grab on the county's pension plan to appease their corporate friends, as well as to carry on the legacy of damage done by Scott Walker.

The thing is, not only is completely unnecessary, it is detrimental to both the workers and to the taxpayers in Milwaukee County, as we explain at Milwaukee County First.

But what can one expect from three of the most ethically-challenged supervisors on the board. Rice and Cesarz are tied in with the latest aspect of Walkergate and Sanfelippo has his own problems as it's being (finally) reported that he's been profiteering off the county.

At least Rice and Cesarz will be gone in a few more months.

Walker's Other Big Lie

We already know that Scott Walker is lying through his weasel teeth when he claims that he campaigned on busting the unions.

Now we know why Walker didn't campaign on this.  It was an even bigger lie.

Via Rick Ungar at Forbes, one can find the true story behind the benefits public sector workers are getting:

Out of every dollar that funds Wisconsin' s pension and health insurance plans for state workers, 100 cents comes from the state workers.

How can that be? Because the "contributions" consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.

Thus, state workers are not being asked to simply "contribute more" to Wisconsin' s retirement system (or as the argument goes, "pay their fair share" of retirement costs as do employees in Wisconsin' s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.

The author goes on to say that Walker's stunt is a pay cut to the public sector worker.

I'd say a more accurate description would be that he is stealing from the workers and giving the money to his cronies and campaign donors.

The man simply has to be removed from office and I, for one, don't want to wait for him to be indicted in the ongoing Walkergate investigation.

The Weasel With Crocodile Tears

The Democratic Party issued a press release a couple of days ago in which they called on Scott Walker to return a $7,500 raise in salary that he gladly accepted as he was sworn in as governor.

What set off their righteous indignation and the demand for Walker to return that money was that Walker had the audacity to go on a radio program and start sniveling about how he was losing money from having to pay towards his pension.

Now let's back them crocodile tears up for a minute.

First of all, as the Dems point out, Walker lied through his weasel teeth about paying for his pension from day one.  The Dems figure that this comes to about $5,600.

When you add in the raise he took with both hands, it comes to six months worth of pay for a state maintenance worker or a correction officer.

But even if you give Walker credit at face value for what he is claiming about the "loss of $10,000 in purchasing power," he's still full of crap.

When you look at what he made in 2010, his last year as Milwaukee County Executive, you'll see that his salary was more than $129,000:

If you were foolish and naive enough to take Walker at his word, he is currently make about $134,000.  That is still $5000 more than what he was making lat year.

Another way to look at it is, if you again lose all common sense and the instinct for self-preservation, he is out about 7% of his pay.

Now compare that to a public sector worker, who is down by an average of 13%, with some workers losing as much as 18% of their take home pay.

Methinks the Dems are going a bit easy on him.

Walker should be returning at least $20,000, if he was truly serious about everyone sharing the sacrifice.

Walkergate: Pension Promises Prove Perpetual Problems

While running for their respective offices, Scott "Walkergate" Walker and Rebecca Kleefisch - who thinks an IKEA catalog is the equivalent of the Kama Sutra - made a promise to pay the full cost of their pension, starting immediately, if they were to be elected.

Scott Bauer, a reporter for Associated Press and one of the better reporters out there, did a blatant act of journalism and checked up on that promise.

Guess what.

Walker and Kleefisch both lied:

Walker's pay stubs provided Friday in response to the AP's open records request made in September had details about his pension payments redacted. But Walker's spokesman Cullen Werwie said the governor did not start paying the full cost until August, when the state law he pushed required elected officials and other state employees to contribute more.

The requirement that state workers pay their 5.8 percent contribution was part of Walker's bill that also took away nearly all collective bargaining rights from most public employees. The fight over that measure resulted in protests as large as 100,000 people, led to all 14 Democratic state senators fleeing to Illinois to block the bill, and made Wisconsin the center of the fight over union rights.

If Walker had fulfilled his campaign promise, he would have been paying his pension costs during that fight in February and March.

Werwie did not have an explanation for why Walker didn't pay until the law forced him to. The law required Walker and other elected officials to make payments of 6.65 percent of their salary starting in August. That goes up to 7.05 next year.

Bauer points out that Walker has had pension promise problems in the past:

This isn't the first time Walker has run into trouble fulfilling promises related to his pension.

Immediately after winning election as Milwaukee County executive in 2002, Walker promised that any staff under his control would waive all salary and benefit increases enacted after 2000. But his opponent in 2004 revealed that Walker's staff had been taking a higher pension benefit for two years. Walker then asked the county board to reduce it
.
Walker also promised to return $60,000 of his $130,000 annual salary as county executive, which he did every year until winning re-election in 2008 when he dropped it to $10,000 a year. Democrats said that amounted to a broken promise, but when Walker made his original pledge he never said how many years he would return $60,000 annually.

Walker also collected pension benefits based on his higher salary for two years before having it calculated based on the lower amount.

Not bad reporting by Mr. Bauer. But, unfortunately, it's not complete either, at least in my humble opinion.

While Bauer touches on the issue of 2004, he misses one of the most significant aspects to that sordid tale.

I've written about this a few times before, most recently in another Walkergate post:

When Walker was whisked into the Milwaukee County executive's chair in 2002, he did so on the wave of hatred due to the pension scandal created by his predecessor, Tom Ament. One of his promises that he made was to have all of his staff sign waivers forgoing the pension enhancements that Ament had created.

In 2004, when Walker ran for his first re-election against challenger David Riemer, the issue of those waivers came up during the campaign. Walker said that he had all those promised waiver signed, but refused to produce them. So push came to shove and Riemer's strategist, Bill Christofferson, filed a formal request for the waivers.

The thing is, Walker didn't have them. He never followed through with his promise. When Christofferson filed the request, he and his top people spent the next ten days rushing around coercing people to sign the waivers. Then at the end of the ten day, Walker supplied a list of people who signed, but did not include the dates they signed, much less the requested waivers themselves.

This fraudulent behavior was brought before the state's Department of Justice. While they did not rule whether Walker's behavior was criminal, they did have this to say:

"In sum, this episode evinces a case of how government officials ought not to do business...

"Whether they violated the public records law is a question largely mooted by the later production of the waivers and the nearly inconceivable notion that a repeat of this inglorious set of circumstances might be forestalled by a judicial pronouncement on the matter.

"Nobody honored to serve in public office ought to manipulate public records in this fashion -- that is the opinion of this office."

However, there is another pension-related story from Walker's past that is even more telling of what kind of politician Walker is.*

In 2000, former Milwaukee County Executive Tom Ament and his crew came up with the pension scheme that eventually had him forced out of office and paved the way for Scott Walker to be swept into office.

In 2005, the Milwaukee County Board held a conference that they planned to file a lawsuit regarding this pension scandal. The defendants were to be Mercer, an actuarial firm who allegedly gave them false and faulty information regarding the true cost of the pension scheme, and the law firm of Reinhart Boerner Van Deuren, who also had a hand in crafting and vouching for the scheme. The Board intended to file this lawsuit over the objections of Walker.

Walker then reversed himself (something he does frequently - Walker watchers such as myself have seen more flip-flops than Bradford Beach). He said he would go along with the lawsuit against Mercer but absolutely refused to allow a lawsuit against Reinhart to proceed. The Board, apparently figuring half a loaf is better than none, agreed to Walker's stipulation that Reinhart was off limits.

Not coincidentally, at the time that this decision was made, the head of the law firm was Rick Graber, who was at that time also the Chair of the Wisconsin Republican Party. Walker, who was gearing up for his first attempt at a gubernatorial run, wanted Graber's blessing. Furthermore, Graber had donated a lot of money to Walker's campaign.

Milwaukee County eventually settled with Mercer for a fraction of what they lost. One cannot help but wonder what the outcome would be if Walker had any ethics and allowed Reinhart to be sued as well.

But we will never know, since Walker's only ethic is that if it's good for him and/or his campaign, then it's good period.

*For a very clear, plain-spoken accounting of the pension scandal and how Walker, talk radio and the right-wing Milwaukee Journal Sentinel conspired to make this a partisan witch hunt, I strongly encourage the reader to take a few minutes for this piece by former county supervisor Jim McGuigan.