Revisions/extensions part 4 (3:40 pm 7/30/2007) – I usually don’t put these on top, but I do have to thank WisOpinion for including this missive in their editorial links of today. Since some of you just pop into this post without checking out the main page, I do want to point you to today’s missive, where I have a few questions.
The Milwaukee Journal Sentinel does us all a major service by exposing on the top of the front page of the most-circulated paper of the week yet another pension grab by a certain class of seasonal county employees, including the now-retired retirement system director Jac Amerell, who orchestrated the biggest part of the grab, former county executive Dave Schultz, who used the grab to become pension-eligible, former parks director Susan Baldwin, who was granted a grab despite no record of prior seasonal county employment that would have made her eligible, and current county board member and former county pension board member Michael Mayo, who used this grab to help him make the Big Grab of 2001 (which if I remember, he also voted for). The opening slug on the $50+ million grab starts it off right -
Ignoring county law and federal tax rules, Milwaukee County let employees change history by ‘buying back’ pension time from summer jobs in their youth.
The scam came in multiple parts:
- Prior to 1990, those that had a previous stint both on the county payroll and in the county pension system, and pulled their money out of the pension system when they left the first time had 2 years upon returning to the county payroll to “buy back” into the pension with the amount they pulled out plus 5% annual interest. The kicker of the “buy back” program is that it allows employees to claim the date they first worked for the county as their start date in the pension fund (I’ll get back to this in a bit).
- In 1990, the pension board, under pressure from a “small group” of ineligible teat-suckers who missed the 2-year cut-off and without authorization from the county board, eliminated the 2-year rule. This change was not codified by the pension board. The pension board attempted to change the interest to the amount that the pension fund had earned, but the teat-suckers got a judge to block it for them. Also in 1990, Robert Nehls, the city of Milwaukee’s pension chief, applied for and got a “buy back” despite not even being on the county payroll at the time or participating in the pension fund when he was with the county.
- In 1991, Amerell, who had just become the county’s retirement chief, decided to get in on the act by making this grab despite the fact that he did not participate in the pension fund his first time around. He then proceeded to “legitimize” it by using a pension board directive to notify eligible employees of a pending interest rate increase at the end of 1991 to extend the “buy back” offer to virtually everybody who ever worked for the county, whether or not they participated in the pension fund or were currently working for the county. Again, this change was not codified by the pension board. The pending rate increase, combined with the opening of the flood-gates, helped lead over 100 county “workers” to violate the federal tax code, which states that no more than 25% of one’s salary can be used in this “buy back” scheme in any one year.
- Remember what I said about the start date in the pension fund? Those that had not participated in the fund their first go-around with the county also got their start date reset to the date of their first go-around with the county. Those who have “start dates” with the county pension system prior to 1982 get more money, partly thanks to the Big Grab of 2001. Also, those who have “start dates” with the county pension system prior to 1994 get lifetime free health insurance.
- In 1996, the pension board finally put the new policies in writing after an outside legal adviser raised concerns. They had put in a 5-year sunset provision.
- In 1998, the county board finally realized that those not currently working for the county could get in on the “buy back” program and shut them out.
- Possibly in response to that (I do not know whether this happened prior to or after the county board action), the pension board took out the sunset provision, and in a move designed to help out folks like Michael Mayo, who was a member of the pension board at that time and who had a “buy back” request pending, allowed a 4-year payment plan instead of a 1-year lump-sum. Mayo voted for this.
- In 2005, after control of the pension board was wrested away from county employees, the board voted to sunset this abomination, and that finally took effect at the beginning of this year.
- Former pension board lawyer Robert G. Ott, who was ousted for his role in the Big Grab of 2001, had several conflicts of interest, including cementing the backdating of the “start date” the day after he started making payments for his son and allowing Susan Baldwin, a family friend, to get in despite no records of her claims of previous seasonal employment and eventual records of employment that made her inelgible for even the enhanced grabs.
The pension board has proposed taking away the grabs of 10 people, including Baldwin (though apparently, not Mayo’s grab). They claim that without retroactive changes authorized by the county board (who is busy killing taxpayers with raises and tax-hike bills), they’ll have to take away another 160 grabs. That still leaves something north of 340 grabs untouched.
I say, take away all the grabs, then toss Mayo out on his ass.
Revisions/extensions (12:47 pm 7/29/2007) – Bruce, who has a blogging “guest house” at Badger Blogger, proves my memory is not yet shot on Mayo, as he dug up The Journal Sentinel endorsement of his opponent in 2004.
Revisions/extensions part 2 (3:35 pm 7/29/2007) – Brian at GOP3 weighs in with a focus on the squealers.
Revisions/extensions part 3 (7:39 am 7/30/2007) – Owen came back from enjoying the weekend to this. Also, Jay Weber wondered why it took so long to catch THIS one. Damn good question