Michelle Malkin » The other pension scandals Obama won’t talk about

The other pension scandals Obama won’t talk about

By Michelle Malkin • July 27, 2009 07:22 AM

Bernie Madoff soaks up all the attention, but there are other pension managers out there squandering their clients’ money — and getting away with it.

Want to know why President Obama isn’t excoriating these other greedy, irresponsible pension overseers?

Because they’re his chums at the SEIU and ACORN (see also Chapters 7 and 8 of Culture of Corruption).

The WSJ shines light on union pension scandals no one’s talking about:

We’ve all read about underfunded corporate pensions, but here’s an unreported story: Union pensions are even more in the red, and it’s one reason union chiefs are so eager to rig organizing rules to gain more dues-paying members.

Only last week, the country’s largest union local re-opened the contract for its 145,000 members two years early and gave up raises and reduced retirement benefits for future hires. The SEIU’s United Healthcare Workers East struck this unusual deal so employers could instead plug a gaping pension hole.

In April, the SEIU National Industry Pension Fund—which covers some 101,000 rank-and-file members—announced that its pension has been put into what the feds call “critical status,” or “red zone.” In other words, it lacks the cash to pay promised benefits and may have to cut them. As of 2007, the last year for which it reported results to the government, the fund had 74.4% of the assets needed to pay its benefits.

Rank-and-file members are taking big hits. The brass? Not so much:

For example, Unite HERE’s National Retirement Fund stood at 115% in 1998 and dropped to 83.4% by 2007, well before the crash. The SEIU fund that was put into a “red zone” in April was at 103.4% as recently as 1998. On average, the asset to liability ration at so-called multi-employer plans, which union funds make up the bulk of, stood at 66% in 2006, according to the Pension Benefit Guaranty Corporation. By contrast, single employer plans, basically most company-provided pensions, were funded at 96%.

Poor management probably deserves a lot of the blame for the union decline, but the exact causes are a mystery. An even bigger mystery is that the unions do a far better job with funds created for their officers and employees than for mere workers. The SEIU Affiliates, Officers and Employees Pension Plan—which covers the staff and bosses at its locals—was funded as of 2007 at 102.2%. The plan for the folks at SEIU international headquarters was funded at 84.8%.

Union officer benefits are also far more generous than anything dues-paying workers enjoy.

There’s no mystery about pension and health fund mismanagement at ACORN. It was plundered to cover for corrupt leaders. The House GOP report released last week lays it out:

ACORN violated its fiduciary responsibilities under the Employee Retirement Income Security Act of 1974 (“ERISA”), which protects the benefit rights of employees. Stephanie Strom, in an October 22, 2008 report in the New York Times, stated ACORN Fund, a health care benefits fund, “had advanced ‘a large amount of money’” to ACORN and “it appeared that the money was used to cover ‘the cash shortfall caused by the embezzlement.’”

The June 19, 2008 HCSE Memo identified ACORN’s current pension fund as “Council Beneficial Association, or CBA” and its health plan as “Council Health Plan, or CHP.”131 The memo stated:

Two other revelations need to be further investigated. These pertain to ACORN Beneficial Association, or ABA, a discretionary plan in place before the creation of CBA that was intended not to be a true pension fund covered by the ERISA law, and to ACORN Fund, a similar discretionary health care fund that was in place before the creation [of] CHP. A large part of the embezzled funds ($215,000) were charged through ACORN’s AmEx account to ABA. When the theft was discovered, this meant that Dale owed ACORN this amount, and ACORN in turn owed ABA for the overpayment. [We are] told that ABA decided to write this debt off as a gift to ACORN (though the debt from Dale naturally was not forgiven). Although it is the organizations’ legal position that this fund was not covered by ERISA and therefore not subject to its rules that would prohibit this sort of gift, it is nonetheless the case that a number of organizations, possibly including unions and charities, paid funds into ABA for entirely different purposes. They did not make those contributions in order to make a gift to ACORN. [We] have not gotten information about who authorized this decision, but those questions need to be asked. Either the board was involved in the decision and can explain the rationale, or they were not, and there are serious questions to ask as to who authorized this expenditure.

Congress has a role in asking those questions too, because of the millions in taxpayer subsidies that flow into the coffers of ACORN and its affiliates.

And where’s the White House? So quick to bash Wall Street greed, the garrulous President Obama has nothing to say about the SEIU and ACORN pension fund scandals.

His silence speaks volumes.

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Posted in: ACORN Watch,SEIU

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Comments

#1

On July 27th, 2009 at 7:28 am, tiredofit08 said:

His silence speaks volumes.

Exactly MM…he’s up to his eyeballs in both the SEIU and ACORN therefore he isn’t ready to throw them under the bus just yet…much more than can do for him at the moment versus bring him down further…but that too will change…keep reporting this to the public!!!
#2

On July 27th, 2009 at 7:57 am, TC said:

The Democrat Party is a criminal enterprise.
#3

On July 27th, 2009 at 7:57 am, WarEagle82 said:

Wow. Union scandals in the age of the enlightened one? It must be that evil Boooosh at work again.
#4

On July 27th, 2009 at 8:00 am, iamsaved said:

When reading an article by Ali Sina,from September 2008, it gets even scarier to contemplate the damage Obama is doing and will do to this country. ACORN and the SEIU are just a couple of tools in his bag of treachery.
#5

On July 27th, 2009 at 8:10 am, docflash said:

Unions and ACORN,another way of keeping people on the plantation.
#6

On July 27th, 2009 at 8:10 am, jangar said:

keep reporting this to the public!!!

It will be the public that tosses the administration under the bus in the next 2 election cycles. Other than we the people, nobody else will allow truth to be exposed in this catastrophe of an administration.

Obama and his minions are there for one purpose only – to break as many rules as possible, in as short a time as possible, for a desired outcome.
#7

On July 27th, 2009 at 8:11 am, rambler said:

So union bosses get better plans than the workers. Leaders just don’t like to live like the rest of us.
#8

On July 27th, 2009 at 8:26 am, zyzzyg said:

I suspect should Pres Obama address this issue it will be in terms of all organizations whose pension liabilities are suspect.

And, he should. It could be part of the smarter regulations that the financial industry be subject to. BTW, where are those new smarter regulations?

The Pension Guarantee Corporation can not afford further pension collapses. They barely got through the latest airline pension debacle.
#9

On July 27th, 2009 at 8:27 am, ajmontana said:

TC said:
The Democrat Party is a criminal enterprise.

True, and our side isn’t much better. jus sayin.
#10

On July 27th, 2009 at 8:29 am, ajmontana said:

zyzzyg said:
I suspect should Pres Obama address this issue it will be in terms of all organizations whose pension liabilities are suspect.

ahahhahahaha, good one. Isn’t it awful early to be on crack?
#11

On July 27th, 2009 at 8:52 am, graysonret said:

suspect should Pres Obama address this issue it will be in terms of all organizations whose pension liabilities are suspect.

Probably true, if he has to. The statement will be vague and off of a teleprompter with pre-submitted press questions & answers on the machine. The next day the MSM will proudly announce how he is “working hard” to fix the problems.
#12

On July 27th, 2009 at 8:59 am, RedRepub said:

I think this is a prime opportunity for our GOP candidates in 2010 to peel away union voters from the DNC. “Union leaders keep their $$$ while you lose your pensions.” Right to Work laws are also ripe for discussion:

“Freedom of association includes Freedom from association.”
#13

On July 27th, 2009 at 9:20 am, oldcollegeguy1980 said:

All ponzi schemes rely on the same thing.

New members money to support the old members.

These union pensions are no different
#14

On July 27th, 2009 at 9:29 am, oldcollegeguy1980 said:

And sooner or later they all run out of someone elses money

But all the while the people running the scam live large
#15

On July 27th, 2009 at 9:31 am, cabrerski said:

On July 27th, 2009 at 8:27 am, ajmontana said:
TC said:
The Democrat Party is a criminal enterprise.
True, and our side isn’t much better. jus sayin.

I will agree with the two-party corruption in D.C. I don’t think the abuse has ever been so bad and so blantant. We do need a true fiscally conservative party but I always fear that people of that caliber do not want to be found in the Beltway (dead or alive).

It seems the each Congress Critter we get now has an ego the size of Toledo. A good percentage of their time is wasted in showing how great they are and not actually getting to the job at hand (unless you think their primary job is re-election).

Perhaps we need to revise the way government is taught in this country. Might as well start showing the kids the corruption and waste in the elementary years. This way, we can prepare them for a lifelong bout of frustration and disillusionment.
#16

On July 27th, 2009 at 10:42 am, hawkeye54 said:

We do need a true fiscally conservative party but I always fear that people of that caliber do not want to be found in the Beltway (dead or alive).

It’s not that truly fiscally conservatives don’t want to be found in the Beltway. It’s just that the Beltway Elite don’t want them, OR attempt to make them conform to Beltway Standards. The Force is very powerful.

Either the idealistic conservatives that make their way to the Beltway butt their heads against the brickwall of Beltway Elitism, are ignored or at best tolerated (as long as they dont’ make waves much) and find it difficult to promote and expand their ideals or they are overcome and consumed by the temptations offered up by the Beltway Borg.
#17

On July 27th, 2009 at 10:56 am, Flyoverman said:

Anyone who remembers the Teamsters Union in the 1960′s and 1970′s is not the least bit surprised to see this kind of thing.

Unions, especially their pension are too ripe a financial target for the unscrupulous not to exploit. So how do you raid the funds and have no consequence?

You get in bed with a political party and exchange votes and political contributions for their providng you protection from criminal investigation and prosecution of your criminal activities. Thus, Democrats, in exchange for votes and tributes are aiding and abetting felons.

The felons in the union leadership prey on the union workers pension funds, while also sending large amounts of the workers earnings to the Democrats. The union workers vote for the Democrats, who are the very people protecting the people who are robbing them.

The Democrats have been pulling off this scam for decades.
#18

On July 27th, 2009 at 11:21 am, jdtruly said:

Lest we forget: the largest Ponzi scheme of all – Social Security. This is the largest multi-trillion dollar sinkhole of them all. When Bush tried to create an alternative he was “Waterlooed” by Congress.
#19

On July 27th, 2009 at 1:16 pm, FirstSkirt said:

Wow….I thought the Clintons were bad people…until Obama came along. Our forefathers and authors of our Constitution were not perfect, but they look like saints compared with who we have in office now.
#20

On July 27th, 2009 at 3:50 pm, Papa Louie said:

We’ve all read about underfunded corporate pensions, but here’s an unreported story: Union pensions are even more in the red…

How much money have these unions given to Obama and other democrats while underfunding their own member’s pensions? A new law prohibiting them from donating to political campaigns while their pensions are underfunded would go a long way to solving two problems.
#21

On July 27th, 2009 at 4:14 pm, battleaxe said:

“An even bigger mystery is that the unions do a far better job with funds created for their officers and employees than for mere workers.”

Mystery? Really? If only there were some sort of media organization that had special people that were really good at ferreting out “mysteries” like these…
#22

On July 27th, 2009 at 5:05 pm, JustAThought said:

“An even bigger mystery is that the unions do a far better job with funds created for their officers and employees than for mere workers.”

MYSTERY? To whom? Same old, same old. The Fox doesn’t justify to the hen.
#23

On July 28th, 2009 at 2:09 am, dadinseattle said:

This series on ACORN/ SEIU by Michelle should be required reading for members of congress, problem is half of them count on this systemic corruption to continue(and it’s on steroids right now) and keep funding these union groups and political thugs with our money.

Obama just fires anyone investigating with power to prosecute, and the media fiddles as our country goes to the dogs!