Gaffney Reports Teacher Lobbyist Pension Loophole Closed

A press release from State Rep. Kent Gaffney:

Legislation to end pension abuses sent to Governor

Springfield, IL… In response to numerous WGN and Chicago Tribune probes into fraud and abuse of Illinois’ public pension systems, the Illinois General Assembly passed legislation Tuesday aimed at closing pension loopholes and ending the abuse of the pension systems. State Representative Kent Gaffney (R-Lake Barrington) co-sponsored and voted for the pension reform bill.

The State’s pension loophole stems from a law passed in 1991 that bases the city pensions on the labor leaders’ union salaries as opposed to the lower salaries they had as city employees. A Chicago Tribune/WGN-TV investigation unveiled 23 retired union officials from Chicago who will collect about $56 million from two city pension funds.

Kent Gaffney

“There are people out there who abused loopholes in the pension system and those loopholes need to be closed,” Gaffney said. “Fraud and abuse should never be tolerated in any form of government. To take advantage of a pension system that is already teetering on failure is simply inexcusable.”

Another Chicago Tribune/WGN-TV investigation found that two lobbyists with no prior teaching experience were allowed to count their years as union employees towards state teacher pensions after subbing for a single day in 2007.

Steven Preckwinkle, the political director of the Illinois Federation of Teachers, and fellow IFT lobbyist David Piccioli were the only people who took advantage of a small pension window opened by state lawmakers just a few months earlier in 2007. Preckwinkle and Piccioli could collect nearly $3 million in pension payouts, based on their union salaries and years of union credit.

“These two IFT officials were lobbyists masquerading as teachers,” Gaffney said. “They gamed the system by taking advantage of a pension loophole allowing them to receive a teacher’s pension after subbing for just one day in the classroom. That’s a slap in the face to hard working teachers across Illinois. I’m glad to join my colleagues in voting to stop these egregious abuses of the State’s pension system.”

The legislation, House Bill 3813, will reform these pension loopholes by:

  •  Prohibiting union officials from earning a pension based on their union salary, rather than their public salary. For all leaves of absence and service credit earned while employed by a union going forward will be based on the salary the employee had before the leave of absence.
  • Ending Union Official Double Dipping
  • Reporting fraudulent activity to the State’s Attorney
  • Retroactively repealing the IFT lobbyists’ pension “window”

House Bill 3813 passed the House on a Concurrence vote of 108-4-1 and will be sent to the Governor for his signature.


Comments

Gaffney Reports Teacher Lobbyist Pension Loophole Closed — 12 Comments

  1. Golar, Jackson, Jefferson, Riley voted for corruption while Lyons abstained.

    I did notice that they did not attempt to go after the Pension Reform in the fall session like they said they were going to after the Spring session. I will be voting all incumbents out until the Pension Reform passes and the state has a future that my kids can live with. While this was needed, the 800 lb gorilla is still staring right at us!

  2. Here are the House Reps who voted against and abstained on the Concurrence vote for HB 3813 on November 29, 2011.

    Representative Esther Golar (D)
    6th District – Chicago (Cook County)

    Representative Eddie Lee Jackson, Sr. (D)
    114th District – East St. Louis (St. Clair County)

    Representative Charles E. Jefferson (D)
    67th District – Rockford (Winnebago County)
    Assistant Majority Leader

    Representative Al Riley (D)
    38th District – Hazel Crest (Cook County)

    Representative Joseph M. Lyons (D)
    19th District – Chicago (Cook County)
    Assistant Majority Leader

  3. Here are the House Reps who voted against and abstained on the Third Reading vote for HB 3813 on October 27, 2011.

    111 Yeas, 3 Nays (Colvin, Mayfield, Riley), and 1 Present (Jones).

    Representative Marlow H. Colvin (D)
    33rd District – Chicago (Cook County)
    Majority Conference Chairperson

    Representative Rita Mayfield (D)
    60th District – Waukegan (Lake County)

    Representative Al Riley (D)
    38th District – Hazel Crest (Cook County)

    Representative Thaddeus Jones (D)
    29th District – Calumet City (Cook County)

  4. Now the question is, how many of the union employees that the Tribune reported on get to keep their pensions?

    Thomas Villanova, Local 134 of the International Brotherhood of Electrical Workers

    Timothy Foley, IBEW Local 134 business manager and financial secretary.

    Michael Nugen, IBEW Local 134 business agent.

    Chicago Tribune
    September 02, 2011
    “Other union officials violated pension law”

    http://articles.chicagotribune.com/2011-09-02/news/ct-met-pensions-sidebar-20110902_1_city-pension-pension-fund-union-pension

  5. Villanova last worked for the city in 1989 as an electrical mechanic with the Department of Streets and Sanitation, making about $40,000 a year. Yet in 2008 he was allowed to retire at age 56 with a $108,000 city pension. That’s because, under a little-known state law, his pension was based not on his city paycheck but on his much higher union salary. The sum is part of a city pension that comes on top of the $198,000 annual salary he is paid to represent the interests of thousands of city workers.

    Timothy Foley, the union’s business manager and financial secretary, retired in 2008 from a $47,000-a-year city job that he hadn’t worked at since 1995. That was the year he took a leave of absence from his position as an electrical mechanic to go work for the union. When he retired from the city, he received credit for the time he worked at the union, and his pension was based on the four-year average of his union salary, which was about $143,000. That allowed him to land a $105,000 city pension, more than double his old city salary, even as he continued to take home more than $160,000 in union pay. He was 54 years old.

    Local 134 business agent Michael Nugent took a leave of absence from a $58,000-a-year city job in 2000. When he retired from the city eight years later, at age 54, he began receiving a city pension based on his union salary. The $105,000 he received came on top of his $110,000 union pay.

    The first [IBEW] Local 134 leader to receive an inflated city pension was Michael Fedanzo. He retired from a $50,000-a-year city job in 2002 and began collecting a $70,000 city pension while earning about $110,000 from the local as a business agent. He was 55 at the time.

    Thomas Villanova is currently president of the Chicago and Cook County Building and Construction Trades Council.

    http://articles.chicagotribune.com/2011-09-01/news/ct-met-pensions-villanova-20110902_1_municipal-employees-annuity-city-pension-pension-fund

  6. Liberato “Al” Naimoli, president of Cement Workers Local 76. Naimoli retired in 2010 from a $15,000-a-year city job that he hadn’t worked at in a quarter-century. He now receives a city pension, based on his union salary, that pays him about $158,000 a year, more than any other annuitant in the city laborers’ pension fund.

    His second pension will come from the Laborers’ Pension Fund for Chicago and Vicinity, a plan established by hundreds of private employers as well as the Construction and General Laborers District Council of Chicago and Vicinity. The council is an umbrella group composed of nearly two dozen Chicago-area unions affiliated with the Laborers’ International Union of North America, or LIUNA.

    Chicago Tribune
    October 12, 2011
    By Jason Grotto
    “Double-dipping labor leaders stand to reap millions”

  7. Does HB 3813 allow current union employees to add public sector pension credits while employed by the union?

    But prohibit future union employees from doing so?

    For downstate (outside Chicago) police and firefighter pension, TRS, SURS, and other Chicago and Cook County pensions.

  8. So pensions can be scaled back once the benefits are in place. Even though there is a “pension protection clause” in the IL State Constitution since the 1970 Constitutional Convention.

  9. On November 9, 2011, Ray Long of the Chicago Tribune wrote an article titled, “Union Pension Abuse Crackdown Gains Steam in Springfield” which appeared in the newspaper’s Clout Street section.

    In the article, Sen. Kwame Raoul, D-Chicago, described reforming the Teacher Retirement System (TRS) public pensions of Steven Preckwinkle and David Piccioli, whom are employed by the Illinois Federation of Teachers union.

    http://articles.chicagotribune.com/2011-11-09/news/chi-union-pension-abuse-crackdown-gains-steam-in-springfield-20111109_1_teacher-pension-pension-abuse-pension-deal

    In the past Illinois Democratic legislators and union leaders have maintained that according to the Illinois State Constitution, state government pensions, including the Teachers Retirement System (TRS), cannot be diminished or impaired.

    But according to this legislation, which has passed both the Illinois House and Senate, and is awaiting Governor Pat Quinn signature, that is not the case. Since the legislature granted this exception, certainly they can grant other exceptions.

    Meanwhile, there are two ongoing series of Chicago Tribune articles about pension abuses.

    http://www.chicagotribune.com > News > Watchdog > Pensions Padded Despite Fiscal Crisis
    Tribune watchdog reports: Padded pensions. A Tribune investigation reveals how suburban taxpayers are footing the bill for millions of dollars in inflated pensions across the suburbs thanks to big perks for top bosses and lax rules.
    http://www.chicagotribune.com/news/watchdog/chi-gallery-padded-pensions,0,4736365.storygallery

    http://www.chicagotribune.com > News > Watchdog > Chicago’s Pension Crisis
    Pension games. An ongoing Tribune investigation finds that political dealmaking contributed to a financial crisis in Chicago’s pension funds, threatening the retirement of public employees and potentially putting taxpayers on the hook for billions of dollars.
    http://www.chicagotribune.com/news/watchdog/chi-pension-crisis-gallery,0,5880368.storygallery

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