Murphy's Law

Sunday’s excellent Milwaukee Journal Sentinel story by reporter Dave Umhoefer blew the lid on yet another county pension scam, albeit far smaller than the original pension scandal. The story showed at least 357 county employees got a sweetheart deal of questionable legality, where they got to very cheaply buy back pension credit for prior seasonal or part-time work, often performed decades earlier, though they’d originally chosen not to contribute to the pension system. The cost to taxpayers: about $50 million. The key question, mostly unanswered by the story: Who’s to blame for this sleazy deal?

First, a culture of cronyism at the county, dating back decades, where relatives were often hired, politicians and staffers scratched each other’s back, and everybody was on board for benefits and looked for ways to increase the payout. Jac Amerell, the former county retirement system director, and Robert Ott, the former county corporation counsel, emerge as key staffers who personally benefited from decisions they made.

Second, Dave Schulz. He served as county executive from 1988-1992, when the two most important decisions were made that helped extend this pension benefit. He personally benefited from the buyback, and gained a $17,600 annual pension. He would have gotten no pension at all without the buyback. It seems hard to believe that Amerell never checked with Schulz, his boss at the time, about this sweetheart deal, particularly since Schulz would benefit. Added irony: Back in 2002, Schultz was prominently quoted at the time of the original pension scandal, offering his analysis of how and why county government had failed. Funny how people in glass houses like to throw stones.

Third, Tom Ament. Did anything ever happen at the courthouse without his fingerprints? He was county board chair when Schulz was executive, and Ament was famous for knowing everything that was going on. And he was county executive in 1999, when the Pension Board voted to override a sunset provision that was going to phase out these benefits. Ament was at least a supporting character in this skullduggery.

Fourth, the Pension Board. The county board seems to have clean hands on this entire scandal, other than supervisor Michael Mayo, who sat on the Pension Board and pushed for benefits he could collect. But all the decisions were made by the Pension Board without getting county board approval. (This also means the media isn’t culpable, as it was for failing to cover the far bigger pension sweetener passed by the county board.)

What screams out here is the make-up of the pension board: Three members are appointed by the county executive, two by the county board chair, three by employee participants and one by the retirees. What’s wrong with this picture? Every appointee is made by someone who can benefit from the pension system. There is no appointee whose sole concern is the impact for taxpayers.

This is only the latest example of the pension board quietly passing sweetheart benefits for prior service. In 1999, the pension board gave some 100 county employees pension credit for their work in years past as federal CETA (Comprehensive Employee Training Act) workers. This has been briefly reported by the media in the past, but no one has ever investigated the cost of that deal, nor its legality. Since this benefit extension also never got the approval of the county board, there may also be ground for revoking the benefit. That deal seems just as smelly.

Clearly, the make-up of the pension board needs to be reconsidered. One possibility is to have some members appointed by the governor. The governor, after all, is covered by the state pension plan and has no stake in the county’s system. And over time, as governors of

Was Scott Walker Asleep?

On the latest pension scandal, the worst that can be said about current County Executive Scott Walker is that he moved slowly. Walker took office in Spring, 2002, but it wasn’t until 2005 that the pension board voted to put a sunset on the buyback program for seasonal or part-time work.

Walker always seems to drag his feet when it comes to cleaning up the county’s pension system. To wit:

-It was nearly three years after he was elected that he finally got around to planning a legal suit against the actuaries at Mercer Human Resources Consulting for the advice they gave officials who passed the pension plan. Compounding this delay, Walker continued to use Mercer as fiscal adviser, which has left the county in the position of arguing that an expert it kept rehiring is guilty of flagrant malpractice.

-He hired outside counsel, attorney Charles Stevens, to advise the county on its legal options, and to draft waiver forms for non-union employees to file a waiver of the extra pension benefits. Stevens put in a grand total of 25 hours work on an issue with huge financial implications, yet of apparently little interest for Walker.

-Only after he was pushed by county board members did Walker get serious about negotiating a cost-saving ceiling on the number of years and level of interest paid on backdrop pension payments.

-He declined to pursue legal action against the Reinhart Boerner Van Deuren law firm for the advice it gave county officials on the pension plan. The head of the firm, back when Walker made this decision, was then state Republican chair Rick Graber, who had donated campaign money to Walker.

-He made no effort to initiate legal action against beneficiaries of the buyback plan for seasonal and part-time employees until Umhoefer began sniffing into the issue. And Walker has yet to investigate whether the 1999 awarding of pension benefits for CETA employment, which was first reported in January, 2002, was illegal.

To be sure, Walker inherited a complex and very screwed up government. And he was a Republican taking over a long-Democratic fiefdom, in what was something of a hostile takeover. But considering he was originally elected to clean up the pension system, you have to wonder why the issue has had so little so interest for him.

The Buzz

-In a JS story last week, we learned this from U.S. Attorney Steven Biskupic: “When he met with Attorney General Alberto Gonzales last spring, Gonzales wanted to talk about the Jude case.” Really? So Gonzales wanted to talk about a local case of police misconduct but never talked to Biskupic about his prosecution of Georgia Thompson, which had the potential to defeat an incumbent Democratic governor? Biskupic’s credibility gap keeps widening.

-The JS Sunday Crossroads “round table” was the best the paper has done, with punchy dialogue by Walker, Mayor Tom Barrett and others. Walker looked particularly inept defending his unwillingness to meet Barrett half-way on how to spend the $91 million in federal transportation money that Milwaukee could gain. Business leader Sheldon Lubar, who’s anything but a Democrat, seemed incredulous at Walker’s explanations.

-It’s been more than 15 years since this $91 million was allocated. Lubar, I suspect, is not the only business person wondering when Milwaukee politicians will agree on how to use it. Perhaps Common Council President Willie Hines and County Board Chair Lee Holloway should come up with their own compromise and see if that puts added pressure on Walker to make a deal.

And check out critic Ann Christenson’s Dish on Dining.