Friday, December 19, 2014

On the Eve of Pension Appeal: A Recused Justice?

PENSION APPEAL: Recused Justice?

“Our founders designed courts to be distinct from the other two branches of government. In order to govern, state executives and legislators must woo popular majorities and play the game of politics, Judges are assigned a different job: to protect our rights, and to decide cases fairly and one at a time, based on the law and the Constitution, not political pressure.  An independent judiciary is one of the crown jewels of our system of government.”  -Chief Justice William Rehnquist

Nearly a decade ago, Supreme Court Justice Alito belligerently shook his head as President Barack Obama unexpectedly and publicly scolded the highest Federal Court for its recent decision regarding Citizens United. 

The President had seen similar disquieting trends in his own native state of Illinois some years before.  Since then, the outside influences on judicial campaigns in Illinois that a young state Senator Barack Obama characterized as “unseemly” have evolved to flagrantly repulsive in the decade since he tried unsuccessfully to move a bill to reform the judicial election process.  He had not counted on Speaker Madigan’s power to block it.

In fact, the current Justices on the Illinois Supreme Court remain in office and seated for ten years through a partisan elective process that bears the manipulation of significant political and monetary influence of various groups and individuals – all vying for some type of consideration by the Court if and when they so need it. 

For those of us with public pensions, quite soon these wealthy or self-serving strategic benefactors have much to gain (or lose) in the upcoming appeal by Lisa Madigan (Speaker Madigan’s daughter) regarding the November 27th ruling by Judge Belz that SB1 (PA98-0599) – the pension theft bill – is unconstitutional. 

You might remember that Speaker Madigan once boasted in December of last year that he felt secure after his passage of SB1 that at least four of the Justices in the Illinois Supreme Court would find SB1 constitutional.  Like most of Madigan’s observations, his announcement was cryptic but also illuminating.

Following Supreme Court regulation, even if one or two Justices were to recuse themselves from hearing the pension appeal due to possible conflicts of interest, it would still require the agreement of four Justices to affirm or deny.  It would not be a majority of the remaining.

Furthermore, money from the Madigan controlled Democratic Party of Illinois fund has heavily supported at least four of the seven current Justices in their bids to attain seats or for retention in the Illinois Supreme Court.  Justices increasingly need financial backing from parties and groups to secure judicial seats or retention in Illinois. 

Sadly, the partisan elective process, which becomes addictive to monetary donation(s), now occurs in Illinois and happens in other states as well.  Since Obama has left his home state and since the ruling of Citizens United, the result has been an exponential delivery of exorbitant amounts of money to potential state Supreme Court Justices during their candidacies in judicial elections.  Political PAC’s and “dark money” have sought and found new recipients, and they are no longer the least influenced branches of government.

One political lobbyist put the entire plan on the multi-state level quite simply: “We figured out a long time ago that it’s easier to elect seven judges than to elect 132 legislators.”  In other words, if you build it, they will come; but if you build possible influence, they will buy it.

And, in Illinois, if money comes to an aspiring Justice with strings attached, the strings web out in all directions to all political persuasions, especially in the Pension Theft appeal:  right wing PAC groups, labor unions, educational groups, attorney groups, big business, etc. 

Please excuse a Christmas metaphor, but in Illinois each of our current Justices carry the ponderous weight of possible appearance of monetary influence approaching the upcoming Pension Theft appeal like Dickens’ Marley struggling with the lumbering chains of past political indiscretions. 

In fact, connecting the political and accompanying monetary dots in Illinois politics is quite enough to drive anyone to distraction – or more likely cynicism.  For example, many will call for Justice Ann Burke to recuse herself in the upcoming pension theft appeal.  After all, Justice Burke has already declared her position regarding the question of pension benefits in her dissenting point of view in Kanerva v. Weems.  While the decision (6-1) found that the addition of health care was a benefit that could not be diminished or impaired, Justice Burke argued that such a decision was crafted out of “whole cloth,” and only what was promised (salary, etc.) at the time of employment would be protected by Article XIII, Section 5 of the Illinois Constitution.

Moreover, Justice Burke raised over $1.8 million in her 2008 campaign to ward off a possible challenger.  According to Follow The Money, groups in support of the current Pension Theft Bill, like the Prtizkers and other business-minded leaders, supplied nearly $1 million in her support.  On the other hand, labor unions also provided another $55,000.  Candidate Committees, like Madigan’s Democratic Party of Illinois, also provided a tidy sum. 

Augmenting this cradle of strings, Justice Burke’s husband, Alderman Edmund Burke is a consistent contributor to the architect “put on earth” to pass Pension “Reform” – ex-Governor Patrick Quinn.  After loaning Quinn over $200,000 and supplying the candidate Quinn with another $50,000, the Burkes’ daughter Jennifer was appointed by Quinn to serve in a $117,000 position on the Illinois Pollution Control Board in 2011.  (

Unfortunately, in the political realm of Illinois, Justice Burke remains no more indebted to conflicting and influential backers than most if not all of the other Illinois Justices. 

In just this last election cycle, voters witnessed an expensive battle in the fifth district race for the retention of Illinois Supreme Court Justice Lloyd Karmeier.  In a combat tailored in the microcosmic result of a Citizen United decision, powerful factions of attorney groups faced off with even larger groups of “dark money” supplied by groups like the Chamber of Commerce to retain the Justice.  The amount of money fueling this specific race for judicial retention reached unheard of highs - nearly $2 million – after receiving nearly $4 million in pro business interests earlier (  In fact, according to, “during 1990’s, costs for Supreme Court races hovered between $20 million and $30 million per election; now, it’s routine for the annual haul to exceed $55 million” ( - .VJUQT50EAA).   

Influence?  In Karmeier’s election for retention, organized trial lawyer groups were doggedly fighting to defeat a judge who had overpowered them in 2004 by taking untold donations from Philip Morris through various front groups and PACs like the Chamber of Commerce, and then refused to recuse himself during later appeals to the highest court in an earlier suit against the cigarette manufacturers claim of “lite” as “harmless.”  The Illinois Supreme Court – and Lloyd Karmeier – overturned the earlier decision and found in favor of the cigarette manufacturer.

Robert Clifford of Clifford Law Offices was part of the trial lawyers’ consortium to defeat Karmeier’s retention.  He expressed his concerns in a recent Tribune editorial regarding the influences of big business in Illinois judicial retentions and elections he has historically witnessed.  “I readily joined this battle because consumers’ rights are in jeopardy every time Karmeier votes on an issue that could affect the interests of those who helped to elect him…Insurance companies and large corporations have funneled money through organizations such as the U.S Chamber of Commerce so that specific identities of the donors remain anonymous.  Voters can’t find out who funneled money to the organizations for those purposes” ( ).

Although caught between the various influences and political/monetary pressures of those powerful entities who support or discourage pension benefits, some Illinois Supreme Court Justices assert they’re ideologically untouchable.  The current Chief Justice of the Illinois Supreme Court Rita Garman expressed her own disbelief in the power of group(s) or PAC donations to influence legal decisions in a Chicago Lawyer article heralding her as “Person of the Year” in 2013. 

Commenting positively on a more meritorious method for judicial selection over an unsavory elective process inundated in cash, Justice Garman nevertheless felt that the independence of the judicial branch in Illinois was still functional and neutral.  “I think politics plays no role in any of the issues we have before us…If a legislative challenge goes up or down, (it’s) based upon whether it meets the standards of our constitution.  And I think our court will analyze it that way. I know that time to time there is speculation about the party split on the court.  That is not an issue with the court” ( .”).

Of course, the particulars of the appealed bill PA 98-0599 remain wholly opposed to Justice Garman’s more erudite imagination of immunity from political pressure or distance from big business.  The removal of the Judicial Retirement System (JRS) from the proceedings in the bill and its later passage as PA98-0599 appears intentionally and strategically designed to influence the Justices by avoiding any immediate or direct consequences for those who would deliberate.    If included, the Justices' awareness of their retirement program's less-than-30% funding as well their initial salaries of over $200,000  would probably weigh as heavily in the decision as their future backing by untold parties.

As one might expect, Speaker Madigan, who predicts a 4-3 win for his daughter’s "sovereign powers argument," spins all of this quite differently.  “The intent was to eliminate the possibility of judicial conflict during the adjudication of this matter through the court system…”

Senator Bill Brady identified a simple contradiction in the Speaker’s argument: "If it’s a conflict for the judges to be in the pension bill, then it’s a conflict they’re taking money from the groups they’re making rulings about” (

In other states, or at least 30 of them, voters have adopted merit selection to pick judges at various levels.  In most cases, non-partisan screening commissions conduct interviews, review deliberation records, and recommend qualified finalists to the state governor, who then makes an appointment.  Retentions are often dealt with by simple majority elections. 

Unfortunately, in at least 21 other states like Illinois, judges are elected in the same political process as we’ve come to expect for our federal congress people after Citizens United or McCutcheon v. Federal Election Commission. 

Despite Chief Justice Garman’s proffering of independence, a retired Supreme Court Justice from West Virginia (also an elective judiciary) stated: “It’s pretty hard in big money races not to take care of your friends…It’s very hard not to dance with the one who brung you” (

How deeply Speaker Madigan resides in the darkness of Illinois’ Justices robes is hard to say; however, he certainly will not be alone.  Pension supporters like AFCSME and WeAreOne will be there, as will Sidley Austin, the Civic Committee and Winston-Strawn.  We might even catch the shadows of twin brothers with an oily nature to them. 

And the Justices?  Caught between many voices and even more money from self-interested backers, we can perhaps only hope they'll be controlled and guided the deep ruts of earlier (and recent) Constitutional decisions to guide them as they hear Lisa’s appeal – an attempt to break contractual promises made by the state because the state has the power to do so?

There will be no recusing by any of the Justices, for in the political circus called Illinois none are untouched.

Tuesday, December 9, 2014

Basic Math on Changes in Actuarial Assumptions?

Basic Math/ Basic Truths

The other week at an interesting gathering of fellow retirees in Skokie, I listened to an illuminating presentation by Rich Frankenfeld from TRS.  It was a long drive, but well worth it.  In his update, Rich covered a variety of areas for concern:  the financial condition of TRS, health insurance information, various plans available to all of us in the room, and other “major issues” including the threat and possible outcomes for SB1.   The President of the Skokie Organization for Retired Educators (S.O.R.E.) is, of course, Fred Klonsky. 

Of note was another review of the changes to Cost of Living Allowances under the new SB1 for Tier 1 retirees and the forced “simple” interest for Tier 2. 

While speaking to several of the points in his program, Rich dropped a small piece of information that caught my interest. 

“Our eldest recipient of a pension in from TRS is currently 108 years old.”

Spoiler alert (Biss, Nekritz, Madigan, Klonsky quickly retorted that he was personally planning to beat that number.

108 years old? 

I’ll assume it was a she, but still what an incredible and protracted life-span.

Born in 1906.  The year Theodore Roosevelt warns the nation that we face a corporatist elite that would endanger all our freedoms; the year The Jungle is published; and the year of the Windber Strike by 5000 workers in Pennsylvania marching to join with the nascent United Mine Workers.

Started teaching in 1927.  A lanky but gifted pilot takes an outrageous gamble to fly solo across the Atlantic and somehow land in Paris, France.

I envision her teaching 40 years while the world struggled to survive economic collapse, bleed profoundly to thwart fascism, endure the pervasive terror of an accumulation of nuclear weapons, Viet Nam…

She retires in 1967.

According to the Chicago Tribune, an average salary for a teacher in 1967 was between $6800 and $7400.  By the way, even then the Tribune seemed concerned about the increases in teacher salaries over the last decade. 
So, assuming she has her full time in and she has a stipend, let’s figure her 75% of salary for her retirement annuity at $6000 per year.

She earns a Cost of Living Allowance in 1968.  And, still alive, she receives that COLA for 47 years!  YOU GO,GIRL!

On the other hand, this is an unexpected extension in a life span that actuaries or Senators like Dan Biss would call an unexpected change in assumptions.  We all live too long now; therefore, SB1. 

But when you actually run the numbers, it seems less onerous than the Senator would have me believe.  In fact, her final annuity earnings seem closer to penury than an easy subsistence.

3% Compounded COLA on $6000 over a period of 47 years = $24,071.

3% Simple Interest COLA on $6000 over a period of 47 years = $14,460.

Monday, December 8, 2014

Ken Previti: National Theft of Pensions by December 11th?

Ken Previti: National Attempt at Pension Theft by December 11th?

According to In These Times.Com, “Reps. John Kline (R-Minnesota) and George Miller (D-California), the highest-ranking members on the House Education and Workforce Committee, have brokered a last-minute deal to reform multi-employer pensions, In These Times has learned. They’re now urging party leaders to include the plan as part of an omnibus spending bill, just before the 113th Congress is set to leave Washington for good on December 11” (

Friend and blogging colleague Ken Previti has likewise alerted us to this latest attempt by the current lame-duck Congress on private sector pension theft for multi-employer plans. 

“Reps. John Kline (R-Minnesota) and George Miller (D-California), the highest-ranking members on the House Education and Workforce Committee, have brokered a last-minute deal to reform multi-employer pensions, In These Times has learned. They’re now urging party leaders to include the plan as part of an omnibus spending bill, just before the 113th Congress is set to leave Washington for good on December 11.
“The full extent of the Kline-Miller proposal remains unclear. In addition to providing trustees with new benefit-gutting powers, it may include other less high-profile elements from the “Solutions Not Bailouts” report, a proposal authored last year by the National Coordinating Committee for Multiemployer Plans (NCCMP), a labor-management coalition.”

Not surprisingly, the designated goals of the NCCMP’s menu sound eerily similar to many of the phrases and clich├ęs offered by those legislators in Illinois proposing SB1.  Example: “Any recommendations for change to the existing system must still provide regular and reliable lifetime retirement income to participants.” 

Regular?  Reliable?  Would that be either without a promised COLA? 

In addition, the longstanding corporate argument of saving the entire system by cutting back on promises appears early on in the presentations.  Also, of course, what’s last on itemized goals and is usually first in unspoken strategies appears: to spur economic growth. 

The report by In These Times identifies the soon-to-be retiring Democratic member of Congress  (Miller) as the enticement for other uneasy liberals in the Democratic Party to join Republicans in this (suddenly) promising initiative.    Unions supporting the measure include massive Building Trades organizations, which feel compelled to compromise now rather than face harsher action in the next few years.  That sounds familiar. 

Understandably, many retired union members feel double-crossed. 

As Ken would alert all of us:
“Yes, teachers are the primary target, the scapegoats, for all of the damage done by the political theft and corruption that is strangling people who work for a living. But the target area has widened and continues to widen.
The federal government’s members of the House Education and the Workforce Committee seems to be the giant bully of bullies – especially during the lame-duck session of Congress. The Los Angeles Times reports it HERE.
“Passing legislation on a tight deadline–especially a bogus deadline–is invariably a formula for serious mischief. That’s what’s happening with a proposal to deal with a supposed crisis in worker pensions by allowing trustees to slash the pensions of already-retired workers to shreds.

Read Ken’s important blog post: