The most powerful man in Illinois is feeling the heat from the state’s worst-in-the-nation financial crisis. With S&P downgrading Illinois’ credit rating again last week and Gov. Quinn forced to cancel a much needed loan, the state’s top Democrats appear to be turning on each other. In a harsh letter from Speaker Madigan to the AFL-CIO three days ago, the 30-year House Speaker blames the unions for the state’s insurmountable problems.
One week ago, credit agencies lowered Illinois’ credit rating to just above junk status. The only other state with a similarly bad financial rating is California. But as analysts point out, California has already hit bottom and is on its way back up. It has a future outlook of ‘positive’. Illinois on the other hand, is still on its way down, with an outlook designated by credit agencies as ‘negative’.
The major cause for Illinois’ terrible financial shape is its decades of unfunded government employee pensions. The state leads the nation in that category as well, with $96.8 billion in pension funding missing as of the end of FY2012. That number’s up from $83 billion at the end of FY2011. That equates to 61% of Illinois’ total pension funds, missing.
While each side involved points fingers at the others, this independent political column would spread the blame equally.
- Democratic Party officials have spent two decades stealing taxes that were supposed to go to pension payments, infrastructure repairs, expanded roads, vendor payments, new construction and tax returns back to the taxpayer. Collecting multiple six-figure paychecks and pensions, hundreds of Democratic Party leaders are double and triple-dipping the state into bankruptcy. These same elected officials were more than happy to let their union donors and backers help themselves to the state’s treasury as well, in exchange for organized labor’s continued support.
- Government employee unions have scammed the pension system for years, and taxpayers will be paying for it until the recipients die – decades from now. Many of them are collecting millions of taxpayer dollars for working just one single day on the job.
- Chicago residents don’t vote, don’t care and don’t have a clue. They love their city’s ‘gangster’ reputation and don’t mind paying for it. They prove that year after year at the voting booth.
Those three examples are harsh – but true. And Chicagoans will never hear those words on their local TV news broadcasts. In fact, one could justifiably blame the local corporate-owned media outlets for covering-up the crime, corruption and embezzlement for decades. As the guardians and keepers of information, the media has a duty to alert citizens to the blatant multi-billion dollar corruption going on right under their noses. But they never do.
In a rare assist to the independent journalists who’ve been covering this story for years, the Chicago Tribune published some of the best examples of union and pension ‘irregularities’. Most readers would consider them crimes. But powerful Democrats have made sure that scamming the pension system and the Illinois taxpayers that pay for it is perfectly legal. And as long as House Speaker Mike Madigan (D-Chicago)’s daughter is the state’s top law enforcement official – IL Attorney General Lisa Madigan – there’s no hope that the corruption will stop any time soon.
Pension examples (from the Chicago Tribune):
-One union official last worked for the city’s Dept. of Streets and Sanitation in 1989 earning $40,000 annually. In 2008, he was allowed to officially retire at age 56 and collect a yearly pension of $108,000. But the union representative also collects $198,000 annually from the union. He is violating the law because he signed a sworn affidavit that he gave up his union pension when he applied for his city pension. He, along with many others, have been collecting both regardless of the illegality of it. The Tribune estimates this individual will walk away with $3 million.
-A number of former city workers and union officials are collecting six-figure pensions for working only one day on the job in their entire life. One individual takes home $158,000 yearly for that one day at work. That amount is five times larger than the typical pension payment for city workers and is so high, it exceeds federal limits. Chicago officials actually submitted exemption requests to protect the individual and his lucrative pay-out. This one-day retiree is expected to collect $5 million.
-A number of union officials are double and triple-dipping from the pension funds. Ultimately funded by taxpayers, one labor leader will collect $400,000 annually from his three pensions – the city laborers fund, a union district council fund, and a national union fund.
-Private non-profits and other special interest groups, completely unattached to the government, are allowed to put their private employees into taxpayer-funded teacher pension programs. Special Olympics Illinois is just one example where state taxpayers are forced to pay for the pensions of employees of private organizations.
-Chicago City Council members, grossly inflating their own pension payouts, have harmed the pension funds possibly more than any other small group of individuals. In addition to their higher-than-average pension payments, they changed the law to allow themselves to work less time than other city employees, pay less into the fund than other employees, retire 10 years earlier than other employees, and retire with multiple taxpayer-funded pensions covering the same years of employment.
-Former Mayor Richard Daley could be considered a one-man-bandit after looking back at his pension shenanigans. Just two years after first being elected in 1991, Daley went back to work for the state of Illinois for just one month, while he served as Chicago Mayor. That pretend employment allowed Daley to increase his state pension from $20,686 annually to $97,780 annually. He also could have retired at age 55 if he hadn’t gone on to win election after election. Former Mayor Daley is now a multi-millionaire, compliments of the Illinois taxpayers.
-Union officials, politicians and private charities aren’t the only ones gaming Illinois’ pension system. Lobbyists and special interest groups are also collecting. One example shows a former short-term employee of none other than House Speaker Mike Madigan who went to work as a lobbyist. Taking advantage of a little known loophole, the lobbyist was able to secure a state pension for time worked at the private lobbying firm. Without the loophole, the private employee wouldn’t be able to collect a state pension at all.
Picture the movie ‘Goodfellas’, when Henry Hill explains his rich and fancy lifestyle by saying, “I’m a union delegate.” These are the real-world examples of the corruption and organized criminal activity going on within the nation’s unions, and taxpayers are the ones paying for it.
Signaling that he may be panicking, Illinois House Speaker Mike Madigan just sent a letter to union officials blaming them for much of the state’s financial and pension-related problems. Accusing them of not being flexible or willing to make concessions like everyone else in Illinois has, the powerful Chairman of the state Democratic Party has signaled there may be cracks in the historically unconditional Democrat-Labor alliance.
Unlike the Governor and Illinois Senate President, House Speaker Madigan has never proposed a solution to the state’s financial problems, caused largely by Madigan himself. And unlike the State Senate, he’s never even allowed a vote on pension reform in his State House. But that protection may be changing.
The State Journal-Register in Illinois published the two-page letter from Illinois House Speaker Madigan to AFL-CIO President Michael Carrigan. Madigan was responding to a proposal by the Labor Organization to hold a ‘pension summit’ between all the government employee unions to find a labor-friendly solution to the state’s crippling debt and missing money.
“Your suggestion of a meeting in Burr Ridge is not timely,” Madigan wrote the AFL-CIO President, “A summit on this topic could have been called several years ago when we first started to grapple with this complex and controversial topic.” Madigan goes on to describe just how cozy the relationship has been between Democratic Party leaders and the government employee unions, “I recall no fewer than eight high-level meetings that took place with labor, legislative leaders and the governor. At that time, I felt there was little willingness from representatives of labor to draft a comprehensive, common-sense solution.”
Illustrating just how inflexible and self-centered government employees and their union representatives have been, Madigan writes, “To date, we have received no cooperation from the labor unions representing state employees on addressing these challenges. In fact, these unions often have been strongly opposed to any attempt to solve the problem. For example, AFSCME recently said it will not ratify a contract that decreases the take-home pay of its employees.”
Word in the precincts
Michael Madigan has been the Speaker of the Illinois House for 31 years, with the exception of 2 years where the Republicans briefly took control. If there is one person single-handedly responsible for Illinois’ financial catastrophe, it’s him. But now, he has a different agenda. Speaker Madigan wants his daughter – Illinois Attorney General Lisa Madigan – to be Illinois’ next Governor. And for that to happen, Madigan needs to clean up his family name.
In the opinion of this reporter, Speaker Madigan is taking a middle road in his approach to the unions. Former Mayor Daley simply ordered the city’s unions to take pay and benefit cuts. All but one union did and that union saw its ranks devastated by City Hall layoffs in retribution. Current Mayor Rahm Emanuel promotes an anti-union public profile, but behind the scenes is buying off organized labor temporarily while he finalizes the outsourcing of all their government jobs to multi-national corporations.
Speaker Madigan will accomplish nothing by his spiteful letter to the AFL-CIO except give the public impression that he and his daughter are suddenly on the taxpayers’ side for the first time in 31 years. The $96.8 billion dollar question is – what is Michael Madigan and the Illinois Democratic Party really up to? With the Chicago Machine running the national party, it could be an indicator of things to come.
Democrats’ anti-labor strategy
Is the Speaker being disingenuous and only racking up political points, with no intention of cutting union benefits? Is he taking the Daley approach, forcing unions to make just enough concessions to put off the state’s collapse another year or two? Or is he taking the Emanuel approach, openly betraying organized labor, knowing full well that aside from the Democratic Party, the unions have nowhere else to go. And who controls the Democratic Party, not just in Chicago, Cook County and Illinois, but the entire country? The Chicago Democratic Machine and its members like Barack Obama, Dick Durban, Rahm Emanuel, Richard Daley, Bill Daley and Mike Madigan.
Illinois may be a microcosm of the national Democrat–Labor relationship. And if the Obama-Daley-Emanuel strategy continues, watch for the DNC to slowly sell out the nation’s unions in an attempt to pull in fiscally conservative, but socially progressive independents and future Democrats. Illinois’ Democratic Party leaders see Michigan as their future, and they’re desperately trying to prevent it.
The former stronghold of organized labor now has an anti-union Republican Party super-majority controlling its House, Senate and the Governor’s mansion. Voters can add and they know that the Democrat–Labor partnership has bankrupted their states. Voter backlash has hit places like Michigan and Wisconsin and it’s headed to Illinois and the rest of the industrialized blue states. Mayor Daley saw it. Speaker Madigan sees it. Mayor Emanuel sees it too. In fact, it appears that union leaders across the country are the only ones who don’t see their future - a special interest group without a major party.
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