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Shaw Thoughts

I’ve been communicating with many of you for nearly 40 years as a newspaper reporter, a political correspondent on TV, a radio commentator and now as President & CEO of the Better Government Association, an anti-corruption civic watchdog organization.

I know what good and bad government look like, who’s using your hard-earned tax dollars wisely (and who’s not), and what we can rightfully demand of our elected and appointed officials to reform government that is broken at virtually every level. I know where the bodies are buried, how to ask the tough questions and how to hold errant public officials’ feet to the fire.

This is where I’ll be posting pieces and producing videos that help you understand what’s going on in the governments around you, what we think about it and what should be done to make it better. After all, that’s who we are: The Better Government Association.

But we can’t do it alone. I can talk the talk, but you have to walk the walk with me and rest of us at the BGA. I hope this blog can inform, motivate and direct our campaign for better government. It’s our right. And their responsibility.

 

 

Unless you've been living in the Deep Tunnel, you've probably heard the State of Illinois is facing a daunting public employee pension crisis, and Chicago — mainly its schools and municipal government — is tiptoeing around similar fiscal land mines that could blow up in the faces of retirees and taxpayers.

Unfortunately, there's more pension peril you may not have heard much about, even if you're following the story.

A recent Better Government Association investigation found the tentacles of the pension problem reaching far beyond Springfield and City Hall to suburban Cook County, where underfunded retirement accounts threaten numerous municipalities.


READ MORE: Suburban Pension Peril

Money in dozens of Chicago-area police and fire pension funds is drying up – which should be a big worry not only for current and future retirees, but taxpayers, a BGA Rescuing Illinois investigation discovers.


Dozens of pension plans run the risk of running dry, raising the specter of severely diminished retiree benefits and big local tax hikes to replenish the coffers.

Our investigation calculates the unfunded liability of 217 police and fire pension funds in suburban Cook County has swollen to $3.3 billion.

The sickest patient: The police pension plan in Stone Park, near O'Hare Airport, which had only seven cents for every dollar owed in long-term benefits.

That prompted the village to approve a $2 million bond issue to cover current pension costs, but it's borrowed money and has to be paid back, on top of future pension obligations.

The countywide crisis has been building for years, caused, in part, by municipalities failing to adequately fund their pension programs on a regular basis.

One "fix" is a new state law that allows pension funds to intercept state dollars intended for municipalities that don't adequately fund their retirement accounts, but that worries local officials who rely on state money for all sorts of things.

"Legislators understand it has to be done but it's incredibly contentious and painful," State Rep. Elaine Nekritz (D-Northbrook) told our investigators. "No one is chomping at the bit to do that."

But numerous towns are paying the price for an understandable but reckless choice: Skipping annual contributions to their pension plans because it was more visible and politically beneficial to spend it on new parks, schools and infrastructure repairs voters can see.

South suburban Harvey is a good example. From 2010 to 2013, contributions for police and fire pensions were supposed to be $10.1 million.

State records show that Harvey paid in just $140 over that four-year span.

Our investigation also found end-of-career raises and bonuses that inflated pensions for retirees in some suburbs.

In Alsip, for example, two police officers retired days after receiving "longevity bonuses" of more than $20,000 each. The pay bumps could boost their pensions, and cost Alsip taxpayers, nearly $2 million, according to our actuarial analysis.

The crisis is prompting suburbs to consider dissolving their fire departments and merging with neighboring towns, or hiring private companies.

McCook, southwest of the city, has already done that by eliminating its fire department and privatizing the service in a move that will save roughly $600,000 annually, according to Mayor Jeff Tobolski.

One potential downside: Private companies don't know the area as well as local fire departments.

That may be one reason there's less talk about privatizing police work.

But back to the big picture: Illinois still hasn't experienced the trauma or the practical dilemma of a pension fund or municipality filing for bankruptcy.

So, in the short term, local elected officials will have to work with their police and fire unions to get this problem under control, like political leaders are doing in other parts of the country.

Suburban Cook has 8,500 police, firefighters and paramedics who could collect pensions down the road.

They provide vital services 24/7, so the challenge is to find a middle ground that ensures their benefits without soaking taxpayers or rendering municipalities insolvent.

That's easy to say but awfully hard to do, which presents another stiff challenge for our elected officials.

Are they up for it?

Time will tell.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org or 312-386-9097.

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Republican gubernatorial candidate Bruce Rauner (left) and Gov. Pat Quinn / Sun-Times files

"What did the president know, and when did he know it?"

That famous question, posed by Sen. Howard Baker during 1973 congressional hearings on the Nixon administration's Watergate scandal, has been asked of political leaders embroiled in crises for the four-plus decades since then.

The latest is Gov. Pat Quinn, whose administration is still reeling from an Illinois Department of Transportation hiring scandal a year after the Better Government Association broke the story.

What did the governor know, and when did he know it?

When we started investigating an elaborate scheme to reward political cronies by circumventing court-ordered state hiring rules, Quinn's aides at IDOT and in the governor's office told us they couldn't say anything.

Then they stopped returning phone calls and emails.

And only after we confronted former IDOT secretary Ann Schneider with a rolling camera did she finally agree to an interview.

It turned out to be her undoing because, after claiming she had no knowledge of illegal patronage hiring, we learned her own stepdaughter landed a job at the agency under dubious circumstances.

Schneider resigned a short time later.

Meanwhile, the governor's aides refused our requests to make Quinn available for an interview.

At public appearances, Quinn said a handful of rogue IDOT employees, including Schneider, were rigging the system.

Then Schneider climbed out from under the bus to accuse Quinn's office, in a Sun-Times interview, of pushing "the vast majority" of the hires at her agency.

Quinn's rejoinder: It was Schneider's responsibility to make sure the hires his office recommended were legal.

Predictably, the campaign of Quinn's Republican opponent, Bruce Rauner, jumped into the fray through a spokesman, who quipped: "There's no one left to fire but Quinn himself."

That's a good line, but delivered by a "spokesman"—not the candidate himself, who generally limits his media availability to carefully scripted events.

Quinn's had a long career in the public spotlight — hundreds of decisions and actions to scrutinize — and while we still have questions about IDOT and a second scandal surrounding an anti-violence grant program, Illinois voters know him pretty well.

Rauner, the ultra-wealthy former venture capitalist, is a much bigger mystery, and apparently his camp would rather keep it that way.

It's also harder for investigative reporters and watchdogs to dig into the mostly-private dealings of an enormously successful businessman than a career politician.

But Rauner's done business with government over the years, and that leaves us with questions about:

  • Reported campaign contributions of $300,000 to former Pennsylvania Gov. Ed Rendell around the same time one of Rauner's companies was winning lucrative pension contracts in the Keystone State.
  • A Rauner-connected firm paying political fixer Stuart Levine $25,000 a month while Rauner was soliciting business from an Illinois pension board Levine sat on.
  • A BGA investigation of a state contract for healthcare services at youth prisons in Illinois that went to a Rauner-connected company with a questionable track record.
  • And the BGA's recent look at Rauner's contributions to grassroots GOP organizations around Illinois as he was preparing for a GOP primary against three better-known candidates.

We wanted to talk to Rauner about those stories but he refused.

So here's our bottom line:

We expected more transparency and open dialogue from Quinn, who spent decades cultivating the image of a populist, good government reformer.

And if Rauner's truly an "outsider" qualified to clean up the mess made by the "insiders," we expect him to be more honest and forthcoming about his business dealings and tax returns, and to answer questions about transactions the Quinn campaign calls "pay to play" and influence peddling.

Given the recent history of the office both men are running for, Illinois voters are entitled, at the very least, to straight answers from the two men who want to govern the state.

Sadly, neither has been candid enough up to now.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org or 312-386-9097.

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Inspector General or Inspector Clouseau?

Sometimes it’s hard to tell the difference.

The former is a title for a job that, done right, shines a bright enough light on a government agency and holds enough of its public officials accountable to increase honestly, efficiency, transparency and accountability.

It’s a civic watchdog’s dream.

The latter is the inept French detective immortalized by Peter Sellers in a series of big screen "Pink Panther" comedies.

His lame antics were enough to make Sherlock Holmes turn over in his fictional grave, and serious watchdogs blanch.

The two extremes come to mind following a recent Better Government Association examination of budgets, staffing, authority and impact in seven IG offices that oversee government in Chicago: City administration, aldermen, parks, housing, schools, community colleges and public buildings.

Transit agencies, including the CTA, are now under the purview of a state IG.

Collectively, the seven city IG offices produce hundreds of investigations every year, but two — the Housing Authority and Public Building Commission — don’t even release their findings, so we don’t know what they’re doing, and the overall track record of the others is mixed when it comes to busting and rooting out Chicago-scale corruption schemes.

The good news: Their audits and investigations have led to nearly 250 employee terminations, resignations and suspensions, and the disqualification of a couple of dozen vendors.

But most of the disciplinary actions stem from minor, low-level infractions, including residency violations, harassment allegations, mismanagement and theft.

And there’s a curious shortage of sweeping, high-profile investigations in a city with an infamous history of shady deals, outsized scams and 30-plus aldermen sent off to prison.

So what’s the problem? And why aren’t the internal watchdogs catching bigger fish in their nets?

The IGs blame it on too few investigative tools, and too little legal independence, financial firepower and political backing to launch or complete large-scale probes; and an isolation from other watchdog offices that prevents collaboration on major cases.

Most lick their wounds quietly, but not the quintessentially enfeebled lapdog — City Council IG Faisal Khan — who is feuding publicly with Mayor Emanuel and powerful aldermen over his limited power and skimpy budget.

Khan appears to be on the way out, but the dustup has a hidden benefit: It focuses attention on smart ways to expand the scope and impact of the city’s internal watchdog work, including the possible creation of a centralized inspector general’s office, modeled after the New York Department of Investigations, to oversee City Hall, the Council, and the sister agencies, and to give the office broader powers, greater independence and more resources.

New York’s watchdog agency dates back to the 1870s — the "Boss" Tweed era — and it has an annual budget of $21 million to investigate elected officials, public employees, and contractors.

The office doesn’t need permission to investigate anything, it has complete access to city computers and records, and it can issue and enforce its own subpoenas.

New York’s IG can also marshal and direct resources wherever they’re needed, even across agency lines, which means a sweeping investigation won’t be sidetracked by a lack of manpower or jurisdiction.

Observers say the model could work in Chicago, and they’re right: One watchdog with a loud bark, sharp teeth and the tenacity of a pit bull could be an extraordinarily valuable anti-corruption weapon, and we’d love to see Mayor Emanuel fulfill one of his old campaign promises by embracing the concept.

Sadly, most of our elected officials prefer bumbling lapdogs like Inspector Clouseau, which is fine when you’re choosing an "oldie" to watch on Netflix, but not when you’re trying to clean up a city with a history of corruption like Chicago’s.

That dog has to hunt.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at ashaw@bettergov.org or 312-386-9097.

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