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Walker-Era County Pension Scandal Resolved, But Fallout Continues

Complaints about media coverage, Abele’s politics and Alexander’s ‘secret’ information

Feb. 24, 2015
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Last Tuesday, the Milwaukee County Board of Supervisors voted 11-4 to override County Executive Chris Abele’s veto and put into place a pension plan fix that would prohibit the county from trying to recoup disputed payments from more than 200 retirees who followed county advice when setting up their pension plans.

The board’s action had been supported by the county’s attorneys and the pension board, but as with all things related to pensions and Milwaukee County government, there’s a lot of political blowback.

Supervisors voting to buck Abele criticized local media for cherry-picking data to attack the board and county workers. Abele ally and conservative Supervisor Deanna Alexander had a last-minute change of heart and accused the county’s attorneys of providing inaccurate advice. And a Democratic activist is requesting that Abele be kicked out of the party for failing to protect retirees’ pensions.

 

Abele Vetoes Recommended Fix

 

The current mini-pension scandal dates back to 2007, when Gov. Scott Walker was county executive. Walker rode into office in 2002 vowing to fix a pension system that threatened the county’s finances and drove then-County Executive Tom Ament from power. Five years into Walker’s term, the Milwaukee Journal Sentinel won a Pulitzer Prize for its investigation into allegedly improper pension plans, separate from those involved in the original scandal, that didn’t adhere to county ordinances or Internal Revenue Service (IRS) rules. Back then, Walker and the board unanimously decided to fix the problem and recoup the disputed payments from the affected retirees.

However, Walker never followed through and attempted to take back money from the 200-plus pensioners.

When Walker’s successor, Abele, discovered the problem in April 2014, the county executive immediately sent letters to the affected retirees, telling them that he would collect their “overpayments.”

A class action lawsuit was threatened; the retirees argued that they had only followed county administrators’ advice when creating their pension plans and shouldn’t be held liable for any mistakes the county itself made.

Throughout 2014, Abele continued to threaten taking back the money from the retirees.

However, the county’s attorneys and the county’s pension board recommended that the county amend their ordinances to grandfather in the disputed payments. Most of the pension plans were put into place so long ago that the statute of limitations protects them. If the county were to try to collect the disputed payments, about $20 million of the $26 million would be beyond the county’s reach—and the county would be forced to make up that money. The pension board and attorneys also argued that since the pension payments were already baked into the pension costs, the county wouldn’t have to spend any extra money on covering the payments. This solution would also avoid costly lawsuits and spare the county from having to take back money from elderly retirees and their survivors.

The board of supervisors voted 14-2 to follow that advice and change the ordinances. Abele vetoed it last Monday and advocated for his own fix that would require lowering future pension payments to senior citizens who had long retired from county service. The media—notably the Abele-sympathizing Journal Sentinel, Urban Milwaukee and right-wing radio—piled on with stories of a select few county retirees who were improperly benefitting from the pension system, hoping to draw attention to their stories with tales of waste, incompetence and corruption.

 

Cherry-Picking Evidence

 

During last week’s debate, supervisors across the political spectrum complained about how difficult it was to cut through the media misinformation and get the facts out to their constituents.

Supervisor Patricia Jursik, an attorney, blasted the media for cherry-picking evidence to attack the board and county employees. She said the board had to pass a fix that would apply universally to all of the affected pensioners. If it voted to punish some so-called “fat cats,” that punishment would also affect, for example, 80-year-old retired nurses who followed county advice when setting up their pensions.

“I for one am not going to take a pension away from a frail, elderly woman who followed all the rules and did exactly what she was told she could do by this administration,” Jursik said. 

Supervisor Jim “Luigi” Schmitt echoed Jursik’s complaints about the media coverage, as well as Abele’s insistence on punishing the pensioners after months of testimony and hearings in favor of the board’s fix.

“This nightmare needs to end and it will if we overrule this veto,” Schmitt said.

 

Alexander Backtracks from Accusations

 

Perhaps the most explosive testimony came from tea party Supervisor Deanna Alexander, typically Abele’s closest ally on the board. Alexander had supported the board’s fix, despite right-wing opposition, even going so far as to write a pro-board, anti-Abele op-ed in the Journal Sentinel.

But that independent streak didn’t last long.

During last week’s debate, Alexander announced that she was changing her mind and now opposed the board’s fix, alleging that she had been privy to secret, unconfirmed allegations about the soundness of the board’s legal advice.

I’ve been told that the county executive’s office did not receive the same legal advice that this board received,” Alexander told her colleagues. “I’ve also been told that some of the attorneys advising us were themselves beneficiaries of the system that we were voting on.

County Corporation Counsel Paul Bargren denied Alexander’s accusations and when prompted by Board Chair Marina Dimitrijevic to further explain herself, Alexander refused.

The next day, Alexander released a statement denying that she had accused the county’s attorneys of impropriety.

“I would like to make it clear that my announcement to revise my position due to these concerns should never have been taken in such a way as to accuse attorney Bargren of wrongdoing, or as if there is some ‘secret’ courthouse legal scandal; to do so would be an incorrectly exaggerated interpretation,” Alexander wrote.

She wrote that the matter would be best resolved in the courts, “to craft answers to the county’s complex issues.”

 

Is Abele Really a Democrat?

 

But perhaps the most personal bit of blowback is an effort to kick Abele out of the Democratic Party. On Monday, Dennis Hughes, an AFSCME Council 40 representative and member of the party, asked the state and Milwaukee County branches of the Democratic Party to expel or censure Abele over his pension stance, claiming that Abele violated the party’s platform, which requires that “[p]ension and other retirement funds must be strictly safeguarded and responsibly managed through regulation.”

Hughes wrote in his complaint, “Abele’s actions exhibit a fundamental rejection of the principles of the Democratic Party in a naked attempt to catapult himself politically on the backs [of] elderly retired county workers a la his ally, Scott Walker.”

The Milwaukee County Democratic Party declined to comment for this article; Abele didn’t respond to a request to comment.

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