Wednesday, March 12, 2014

Tom Ament's Legacy And Legacy Costs

Tom Ament
On Tuesday, the news broke that former Milwaukee County Executive Tom Ament passed away from lung cancer.  He was 76 years old.

Ament had done some good things during his time as county executive, most notable ushering in the Calatrava addition to the Milwaukee Art Museum.

Ament had also done many bad things during his term.  He closed down Doyne Hospital. He gladly handed over the child welfare system to the state, a move that has cost taxpayers hundreds of millions of dollars since.  He also pushed for the then new Miller Park, which came with a sales tax that is now projected to last more than twenty years.

But the one thing that will be mentioned in any story regarding him and his passing his his role in the infamous pension scandal.  Sadly, due to the passage of time and the political spin people want to put on it, the truth of the story is usually glossed over and even completely misrepresented.

The worst reporting of Ament's legacy is ironically by Bruce Murphy, the reporter who had originally broke the story more than a decade ago.

Murphy claims that Ament's pension scandal is "arguably the biggest political scandal in the city’s history."  Well, outside of the fact that is the county and not the city, I think that the hands down winner as the biggest scandal in Milwaukee County history would be Walkergate and how Scott Walker used county staff and equipment to run not only his campaign but the campaign for his desired lieutenant governor, Brett Davis.

Murphy also mistakenly reports that the enhanced pension deal was to attract workers.  That's not exactly true either.

In the late 1990s, the nation was experiencing an economic boom.  Things were going so well that many county workers were leaving for the private sector where the pay was so much higher.  The pension enhancements were designed to retain workers by getting them to work until at least 2004, the year that the enhancers would reach their maturity.

At the time, it was the fiscally conservative thing to do.  The pensions fund was replete due to the good economic conditions.  And it was easier to enhance the pension than it was to give pay increases, which would have put an extra burden on the tax levy.

What Ament, the actuaries and the lawyers that approved the plan did not count on was the severe economic downturns brought on by the Bush/Cheney administration and by the attacks of 9/11.

While Murphy reports that the pension deal has cost taxpayers hundreds of millions of dollars, it should also be noted that the Great Recession of 2008 cost the fund more than $350 million, all of which it recovered in a few weeks.

Ironically, if it weren't for the advice of the "experts," who just happened to be the same sort that tanked the economy, the pension fund wouldn't have been depleted at all.

Murphy even misreports what the pension deal even did:
The pension gave county veterans like Ament a 25 percent bonus in their pension plan. Prior to that retirees could collect up to 80 percent of their final average salary for life, but this gave them the opportunity to collect an unheard of 100 percent of their final average salary. On top of that, they could collect a special lump sum or “backdrop” payment, which was lucrative indeed. To date, more than 1,700 county employees have collected this benefit. Some 740 people have gotten at least a $100,000 lump sum benefit, 255 have gotten at least $250,000 and 40 received at least $500,000.
It should be noted that not all county workers were eligible for the bonus. It only applied to the workers that had been there for a long, long time. It should also be noted that the lump sum pay out, or backdrop if you will, was not "on top of" the pension. All the backdrop is is a different way to pay out the pension. Workers that took the backdrop pay out up front had a smaller monthly pension.

While I do not dispute Murphy's numbers on how many workers collected what, it needs to be pointed out that the vast majority of the large pay outs went to non-represented employees and was something that Walker and his successor, Chris Abele, could have stopped at any time.  Most county employees that retired received much smaller lumps sums plus the smaller monthly pay out.

It should also be noted that the hit to the taxpayers was increased by Walker's refusal to make full payments after the Republican-engineered economic downturns.  Furthermore, Walker insisted on doing a perilous pension obligation bond scheme - and idea supported and pushed for by Abele and the rest of the Greater Milwaukee Committee.  This locked taxpayers into making payments for decades, whether they were needed or not.

I would be remiss if I did not also point out that the actuary agency, Mercer, was successfully sued by the county.  Mercer ended up paying $45 million to the county.

I would also be remiss if I did not point out that Walker was the one that refused to sue the Reinhart Boerner Van Deuren  law firm, which approved the pension plan, because of political considerations.  Rick Graber, then head of WISGOP, worked there and Walker was trying to curry for his first run for governor.

Even though Ament might be best known for his role in the pension scandal, that in itself is just a symptom of his real legacy and the high costs that have come from it.

Ament was the first of three consecutive "fiscally conservative" county executives that have cut services, cut corners and cut themselves breaks, all to the detriment of the citizens and taxpayers of Milwaukee County.
Although Ament was the only one to do so and was honest about it.  Both Walker and Abele have used Ament's pension deal as their excuse for their austerity, even though the results are the same.

1 comment:

  1. Excellent reporting.

    Nice catch on Reinhart who still does a lot of work for the County.

    A Reinhart attorney, per the Walker emails, Mark Cameli, was advising Chianelli in 2010.

    "...Walker's county staff belatedly discovered the woman they had hired as geriatric physician at the complex — Gabrielle Young — was also an underwear model.




    "...Jursik argued that the Abele-backed bill is relying on the development rights historically granted to railroads, which are broader than those granted to private parties.

    “Railroad rights are practically the same as Public Trust doctrine rights,” Jursik said.

    Jursik got the outside attorney representing the county, Reinhart, Boerner, Van Deuren attorney J. Bushnell Nielsen, to admit to helping to draft the legislation…."’s-couture-bill-|-news-|-shepher-express-.html