Thursday, December 18, 2008

Financial Scandals, From Wall Street To The County Courthouse

There's yet another story in the Journal Sentinel about a jaw-dropping pension deal for well-positioned county employees - - a career prosecutor and his spouse, also a county retiree, who together, by being in the right place at the right time, will take down $1 million in pension bonuses and $100,000 in annual pensions, for life.

Worse: the newspaper calculates the amount of money already paid out in those shocking bonuses at more than $140 million - - much of which continues to come from taxpayers supplementing a burdened pension system that cannot sustain the special benefits added, with hardly any discussion, by a handful of bureaucrats and elected officials.

Recalls, resignations, and a single prosecution cannot atone for the scandal's abuse of the public trust.

There has been no reimbursement of these tens of millions lost to the bus system, to the parks, to law enforcement, to child-welfare and health-care services - - life-savers, to be sure - - and to taxpayers looking for much-needed relief, too.

Though eligibility for the added pension benefits was halted, the destruction of an entire county's ability to tax and spend correctly - - in other words, to function properly - - will continue for years.

While services falter, and taxes remain high, one small group of people - - county workers whom I am sure were hard-working, and deserving of good retirements - - is being enriched by everyone else at rates unparalleled in public service.

This was a legal, moral, fiscal, and political fiasco.

And we can't say that all the lessons have been learned, as pension abuses continue well into the tenure of current County Executive Scott Walker, the man county residents thought they were electing to clean up the courthouse and a culture of narcissistic self-enrichment.

Surely there is a best-selling book waiting to be written about once-proud Milwaukee County, a blue-collar bastion of hard work that is now wrecked financially.

It predated the subsequent hubris and greed on Wall Street - - Milwaukee County, an entire municipality rocked not by a single Madoff-like schemer but by a group of insider public servants with the power and chutzpah to commander the treasury, and its future revenues, and an entire government's ability to do its true job: service.

What a story - - chronicaled locally by Journal Sentinel reporter Dave Umhoefer, who won a much-deserved Pulitizer Prize in 2008 for exposing the intrcaciies of many courthouse pension shenanigans.

And there's surely at least a master's or Ph.D thesis to be written comparing how differently the City of Milwaukee and Milwaukee County chose to alter their separate pension plans at about the same time.

While the wise guys and gals were busy self-dealing at the Courthouse, a city government working group convened by then-Milwaukee Mayor John Norquist (on whose staff I served at the time) worked for months to craft a method to redistribute some of a surplus in the city pension system without harming its viability.

People like Ald. Mike Murphy, City Attorney Grant Langley, Administration director David Riemer and others, along with independent counsel and financial experts crunched numbers, ran computer scenarios and eventually produced a fair and conservative plan.

Then put it to a vote of the system's 25,000 beneficiaries who approved it overwhelmingly.

I sat in on many of these meetings. There was not a whiff of self-interest at the table.

Nor was there a sense of panic, though there was litigation by the police union that was forcing a settlement.

It was all about protecting the system, saving money, being reasonable, being fair.

The county could have taken the same sober approach to pension reform, even though it was not facing the same legal pressures, but it didn't.

These painfully gaudy super-benefits will mercifully be finally and fully paid out to the last eligible retiree sometime down the road, with a more rational system in place.

But at a huge cost to taxpayers, public services, and the notion that government serves the many, not the few.


Anonymous said...

Walker's fault? Really?

Then Lincoln gave us slavery, Reagan gave us the cold war, and FDR destroyed our economy (oh, actually - he did, wrong example).

James Rowen said...

The newspaper documented that problems continued into Walker's administration.