If You Control the Message,You Have a License to Steal...

"$2.6 Trillion in state pension money is under management in America..."

"Today, the same Wall Street crowd that caused the crash, is not merely rolling in money again, but aggressively counterattacking on the PR front. The battle increasingly centers around public funds, like state and municipal pensions...In state after state, politicians are...using scare tactics and lavishly funded P.R. campaigns to cast teachers, firefighters & cops - not bankers- as the budget-devouring bogeymen responsible for the mounting fiscal problems in America's states and cities..." Matt Taibbi

Illustration by Victor Juhasz for Rolling Stone

In a recent Rolling Stone Magazine article, veteran investigative reporter Matt Taibbi exposes the vast national strategy being implemented to undermine public employee pensions.This important article gives context to what is happening in states, counties, public school districts, and cities all over the United States. Here are some highlights:

• In 2011,Rhode Island's newly elected Republican State Treasurer, Gina Raimondo,  a former venture capitalist, "...declared war on public pensions, ramming thru an ingenious new law slashing benefits of state employees..." It was called The Rhode Island Retirement Security Act of 2011. She's currently being touted as a possible Republican candidate for governor in 2014.
• Former Enron executive, John Arnold, one of Raimondo's biggest supporters, has, for years, been funding a nationwide campaign to slash benefits for public workers. After Enron, Arnold made $3 Billion as a wildly successful hedge fund operator,  "...the world's most successful natural gas trader," Arnold set up a foundation dedicated to reforming the pension system. Interesting side note: Arnold pulled off an $8 million bonus from Enron "while the company's pension fund was vaporizing...Public pensions funds lost more than$1.5 billion from their Enron investments."

• In 2011, The Pew Charitable Trusts, "long regarded as centrist and non-partisan..." began to align itself with John Arnold and his foundation, and "both have been proselytizing pension reform all over America, including in California, Florida, Kansas, Arizona, Kentucky, an Montana." with Arnold effectively exploiting Pew's credibility and established status in this field of research.

• States contribute to public employee pensions. This is referred to as ARC - Annual Required Contribution, and in many states it's mandated by law. Over the past 10 years, "...at least 14 states regularly failed to make their ARC. New Jersey made just 33% of its payments, with the teachers' pension fund getting just 10%. Kentucky has paid les than 50% of it's ARC for the past 10 years and is "basically broke, with it's pension fund  27% funded." (To contrast, Detroit's General Pension Fund is credibly estimated at 77% funded at this time.)

• Recognizing that so many states have been under-contributing to their public employee pension funds, the Arnold Foundation's report decided that, " the way to create a sound, sustainable, and fair retirement-savings program, is to stop promising a [defined] benefit."

http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926