Illinois $10 Billion Pension Spiking Timebomb

Bloomberg Video:  Runs 2 minutes

Solid, short clip, and a group of pension spiking links with commentary. 

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All commentary and links below were provided by Frank...

Pension spiker in low income Bellwood, Illinois:

http://articles.chicagotribune.com/2010-06-29/news/ct-met-bellwood-0626-20100629_1_village-officials-human-resources-director-finance-director

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Pension spikers in high income Highland Park, Illinois:

http://articles.chicagotribune.com/2010-07-31/news/ct-met-highland-park-money-20100731_1_park-district-highland-park-parks-officials

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The Chicago Tribune has been looking into pension spiking.  Here's an article mentioning some less ambitious spikers:

http://articles.chicagotribune.com/2010-07-16/news/ct-met-pension-deals-20100716_1_police-pension-illinois-pension-final-salaries

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From NPR:

"Basically, the state of Illinois is upside down on its home mortgage and it's maxed out its credit cards, and it's applying for more credit cards."

http://www.npr.org/templates/story/story.php?storyId=125076655

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Here's an oldie from the Sun-Times:

"In winning business from pension funds for city workers, cops, teachers and CTA employees, Robert G. Vanecko said he never told anyone he's Daley's nephew."

http://www.suntimes.com/news/politics/570056,CST-NWS-vanecko23.article

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A connected Chicago firefighter, convicted of moonlighting as an arsonist, had his pension reinstated by a judge who is the son of a former Chief of Police:

http://articles.chicagotribune.com/2009-11-11/news/0911100517_1_arsonist-firefighter-s-pension-daley-center

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Of course, the pension problem effects the entire state. Here's a downstate article quoting a simplistic solution.

"They just need to sit down and actually talk":

http://thesouthern.com/news/local/govt-and-politics/article_bbe10fea-b329-11df-892d-001cc4c03286.html?mode=story

Informed voters are the real solution. Every taxing body should be required to post every expenditure on the web. These expenditures are public information anyway, and they should be freely available 24/7.

The mass media sometimes does a good job covering these issues, but they tend to focus on the hot issues of the day. Their revenue doesn't depend on the anger generated by a tax spike which only effects 2000 people. But, even if only 100 of those 2000 people look into the budget lines and ask questions and ultimately share the results on the web, the local politicians will have some direction beside the usual crooks and cronies.

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h/t to Frank

Further Reading:

• SPREAD THIS STORY -- Meet Neil Codell, An Illinois Educator With A $27 Million Dollar Public Pension

• Illinois Is Broke Dot Com -- Check This Out

Comments

[DailyBail]

In his DealBook column, Andrew Ross Sorkin writes about a conversation with Felix Rohatyn, the veteran investment banker who helped save New York City from bankruptcy in the 1970s, advised RJR Nabisco on its sale to Kohlberg Kravis Roberts in the 1980s and sold Columbia Pictures to Sony in the 1990s.

http://dealbook.blogs.nytimes.com/2010/10/18/sorkin-felix-rohatyn-looks-back-and-sighs/?ref=business

[DailyBail]

(Crain's) — The Federal Home Loan Bank of Chicago has sued several of the nation’s largest banks, including its biggest shareholder, Bank of America Corp., alleging that their failure to disclose lax mortgage underwriting standards led the Home Loan Bank to suffer losses after purchasing poor-quality mortgage-backed securities from them.

The Home Loan Bank’s lawsuit, filed in Cook County Circuit Court, asks the court to void the sales of the securities and direct the banks to reimburse the Home Loan Bank plus 10% annual interest, according to Bloomberg News.

http://www.chicagobusiness.com/article/20101015/NEWS01/101019921/federal-home-loan-bank-of-chicago-sues-b-of-a-others

[DailyBail]

You would be hard-pressed to find a politician who is less frank than Congressman Barney Frank. Even in an occupation where truth and candor are often lacking, Rep. Frank is in a class by himself when it comes to rewriting history in creative ways. Moreover, he has a lot of history to rewrite in his re-election campaign this year.

http://www.investors.com/NewsAndAnalysis/Article/550746/201010181816/Barney-Frank-Is-Anything-But-On-Housing.htm?source=patrick.net#header

[Dr. Pitchfork]

Very interesting stuff, Frank. We hear a lot of background noise about pension abuses, but it's great to see these issues in concrete detail. Thanks for sending this in.

[Cheyenne]

Right on, Frank. Cronyism and gangrenous financial decisions at the city and state level are just two of the reasons I am getting the fuck out of Chicago as fast as I can. I know plenty of people who work for the city who feel the same way and are headed for the exits as well. In a word, grim.