Subject: Re: Rahm Emanuel Cuts Public Pensions, Diverts Money to Benefit
Campaign Donors
Talk about trusting the fox in the hen house!
Where did we come up with this Fairy Tale that our kindly old Uncle Sam will
take care of us? We've just been going about with our head stuck in our
iPhone or other entertainment gizmos, without a care in the world while
guys like foxy old Rahm Emanuel start carving up our pensions, and jacking
up our taxes. Suddenly we're getting all upset. Well just where the Hell
have we been? Back in grade school we were being taught how our brave
Pioneers took the land away from the Injuns, and old Uncle Sam, the Great
White Father, made lasting promises and wrote eternal treaties protecting
the Injuns right to exist on the barren reservations...until we needed the
oil or minerals. Didn't we learn nothin' back then?
Maybe the Chicago retired fire and police will open their eyes and realize
that they are going to need to fight for what they thought was theirs all
along.
Greed never knows when to quit.
Carl Jarvis
----- Original Message -----
From: "Miriam Vieni" <miriamvieni@optonline.net>
To: "'Blind Democracy Discussion List'" <blind-democracy@octothorp.org>
Sent: Monday, April 07, 2014 11:26 AM
Subject: Rahm Emanuel Cuts Public Pensions, Diverts Money to Benefit
Campaign Donors
Sirota writes: "This same story, portraying public employees as the primary
cause of budget crises, is being told across the country. Yet, in many
cases, we're only being told half the tale."
Chicago mayor, Rahm Emanuel. (photo: NBC Chicago)
Rahm Emanuel Cuts Public Pensions, Diverts Money to Benefit Campaign Donors
By David Sirota, Pando Daily
06 April 14
If you've read the financial news out of Chicago the last few weeks, you've
probably heard that the city faces a major pension shortfall, supposedly
because police officers, firefighters, teachers and other public workers are
selfishly bleeding the city dry.
You've also probably heard that the only way investment banker-turned-mayor
Rahm Emanuel can deal with the seemingly dire situation is to slash his
public workers' retirement benefits and to jack up property taxes on those
who aren't politically connected enough to have secured themselves special
exemptions.
This same story, portraying public employees as the primary cause of budget
crises, is being told across the country. Yet, in many cases, we're only
being told half the tale. We aren't told that the pension shortfalls in many
US states and cities were created because those same states and cities did
not make their required pension contributions over many years. And perhaps
even more shockingly, we aren't being told that, while states and cities
pretend they have no money to deal with public sector pensions, many are
paying giant taxpayer subsidies to corporations - often far larger than the
pension shortfalls.
Chicago is the iconic example of all of these trends. A new report being
released this morning shows that the supposedly budget-strapped Windy City -
which for years has not made its full pension payments - actually has
mountains of cash sitting in a slush fund controlled by Mayor Rahm Emanuel.
Indeed, as the report documents, the slush fund now receives more money each
year than it would cost to adequately finance Chicago's pension funds. Yet,
Emanuel is refusing to use the cash from that slush fund to shore up the
pensions. Instead, his new pension "reform" proposal cuts pension benefits,
requires higher contributions from public employees and raises property
taxes in the name of fiscal responsibility. Yet, the same "reform" proposal
will actually quietly increase his already bloated slush fund.
But it gets worse: an investigation by Pando has discovered that Emanuel has
been using that same slush fund to enrich some of his biggest campaign
contributors.
How a "shadow budget" is bankrupting Chicago
The new report, from the taxpayer watchdog group Good Jobs First, shows how
Chicago's roughly 150 "tax increment financing" (TIF) districts divert
property taxes out of schools and public services and into what is now known
as Chicago's "shadow budget." That's a slightly nicer term for what is, in
practice, Emanuel's very own sovereign wealth fund.
Living up to his billing as "Mayor 1%," Emanuel has used the fund to (among
other things) offer up $7 million of taxpayer cash for a new grocery store,
$7.5 million for a proposed data center, $29 million for an office high rise
and $55 million for a huge new hotel (and that latter project is on top of
$75 million more in tax money Emanuel has offered up to build a private
university a new basketball stadium). And these are just a few of the
corporate subsidy proposals in a $300 million spending spree Emanuel has
championed at the very moment he has pled poverty to justify pension cuts,
property tax increases and the largest school closure in his city's history.
Contrary to the story of public employees bleeding taxpayers dry, the Good
Jobs First report proves that the slush fund is the root of the city's true
fiscal problem. As the municipal budget figures show, over the last 14 years
Chicago refused to make its necessary pension contributions. Yet, at the
same time, the city's TIF-based "shadow budget" skyrocketed. In effect, more
and more public revenue that was contractually obligated to pensioners was
being diverted by politicians to fund TIF subsidies, many of which go to
subsidize wealthy corporations.
The scheme has gotten so out of control that, according to Good Jobs First,
annual TIF revenues now far exceed the annual cost of funding the city's
pension systems. The report shows that in 2013 Chicago's pension costs were
$385 million whereas Emanuel's slush fund that year received $457 million.
For his part, Emanuel has insisted that roughly a third of TIF funding goes
into schools (at his sole discretion, of course). Yet, his slush fund is so
opaque there's little way to verify this claim. Indeed, Chicago's local
public radio station WBEZ recently noted that it "has repeatedly requested a
breakdown of all current TIF-funded projects, but [the Emanuel
administration] has not yet provided it."
Enlarging the slush fund under the guise of "reform"
What is certain is that while Emanuel has been shuttering schools and
proposing big pension cuts, he has also refused to release more than $800
million in surplus taxpayer monies sitting in his slush fund. He has also
killed legislation that would force him to put at least some of those
resources into plugging school funding gaps and pension shortfalls. Instead,
as of this week, he has put forward a proposal that uses the guise of
pension "reform" to further balloon his corporate-subsidy slush fund.
Of course, that's not how it is being billed. Emanuel's administration
insists the proposal "strikes the right balance of reform and revenue and
serves as an honest framework in which everybody gives something." Not
surprisingly, the notion that the mayor's proposal is about "sharing the
pain" has been loyally echoed by much of the Chicago press. Yet, there's one
group that is being exempted from sacrifice and that will likely be further
enriched by Emanuel's proposal: Chicago's corporate class.
As the Chicago Reader's Ben Joravsky reports, Emanuel's proposal will
actually "cut payments to municipal retirees, jack up property taxes, and
give the mayor more slush funds to play with." Here's how this latest
wealth-transfer scheme works:
If the mayor raises the overall tax rate to fund his pension bailout, he is
of course raising the rate in TIF districts thereby. That means more
property tax dollars will flow into the TIF bank accounts. Think of it as
more slush for the fund.
Remember, the mayor says he's cutting benefits for geezers cause Chicago's
dead broke and he wants to limit the burden on beleaguered taxpayers.But, as
I like to point out, there's "broke" as in "We gotta make some retired Water
Department clerk live on less" and broke as in "Ah, what the hell-might as
well add a little more slush to the pile.".
So in short.Mayor Emanuel cuts benefits to retirees, jacks up your property
taxes, and brings in more cash for things like the River Point office
building in the West Loop, the Hyatt hotel in Hyde Park, the aforementioned
South Loop basketball arena for DePaul, and that South Loop hotel for
Marriott.
The question, then, is why? With his reelection poll numbers plummeting, why
would Emanuel refuse to give up some of his slush fund? Why would he instead
propose a plan that increases the slush fund and threatens to anger
property-tax-averse voters and enrage pensioners? Why, in short, is he so
protective of the slush fund?
Still an "insider's game"
As usual, one answer can be found by following the money. When you do that,
you discover that despite Emanuel's declaration that "government can no
longer be an insider's game, serving primarily the lobbyists and
well-connected," the TIF scheme is often exactly that - an insider's game.
And, as Pando's investigation into the TIF program proves for the first
time, the corporate beneficiaries of that insider's game just so happen to
be Emanuel's major campaign donors.
For example, just after Emanuel took office, his apparatchiks on Chicago's
City Council passed that $7 million TIF subsidy that will benefit grocery
chain Mariano's Fresh Market. Mariano's is owned through a parent company by
Willis Stein & Partners, whose CEO gave Emanuel $25,000 just months before
the TIF was approved.
Similarly, in the above mentioned data center proposal (which fell through),
Emanuel offered to use his TIF authority to let private equity firm Madison
Dearborn Partners and real estate company JDI Realty get away with not
paying back $7.5 million in TIF money that is still owed to taxpayers.
Madison Dearborn Partners is one of Emanuel's biggest sources of campaign
cash.
Then there is Emanuel's $29 million office-tower TIF. That boondoggle will
underwrite the new Chicago headquarters of DLA Piper - the same law firm
whose employees have given Emanuel more than $125,000. The law firm will
benefit not only from having its leased office space effectively subsidized
by taxpayers, but also from the preservation of TIFs in general, as the
firm's Chicago office has a long history of TIF legal work. As just one
example of that, DLA Piper is the law firm involved in the $4.5 million TIF
Emanuel's allies engineered for Vienna Beef.
Not to be forgotten is Emanuel's $55 million TIF for a massive new hotel
near Chicago's convention center. According to the Chicago Tribune, Emanuel
appointees on the Metropolitan Pier and Exposition Authority awarded
commercial real estate company Jones Lang Lasalle the big construction
management contract that will benefit from that huge TIF. One of the largest
shareholders of Jones Lang Lasalle is Ariel Investments, whose president
gave Emanuel's campaign $31,500.
There are likely more such examples, and we'll keep digging to uncover them.
What we know now is that the real estate and financial industries are among
the big beneficiaries of Emanuel's shadow budget. The former often benefits
from TIF subsidies of development deals, while the latter often either has
ownership stakes in TIF projects or sells off the debt at a profit in the
financial markets. And - surprise, surprise! - campaign finance data show
that those two particular industries bankroll Emanuel's campaigns.
So again, why is Emanuel aggressively trying to preserve his slush fund,
even if it means inflicting unnecessary budget pain on retirees and
rank-and-file taxpayers? Because preserving his slush fund defends the
people he really represents - the financiers who sponsor his political
career.
Pando contacted Mayor Emanuel's office for comment on this story (~2hrs ago)
but they had not responded by publication time. We will update this story if
we hear back.
Error! Hyperlink reference not valid. Error! Hyperlink reference not valid.
Chicago mayor, Rahm Emanuel. (photo: NBC Chicago)
http://pando.com/2014/04/04/revealed-rahm-emanuel-cuts-public-pensions-diver
ts-money-to-benefit-campaign-donors/http://pando.com/2014/04/04/revealed-rah
m-emanuel-cuts-public-pensions-diverts-money-to-benefit-campaign-donors/
Rahm Emanuel Cuts Public Pensions, Diverts Money to Benefit Campaign Donors
By David Sirota, Pando Daily
06 April 14
f you've read the financial news out of Chicago the last few weeks, you've
probably heard that the city faces a major pension shortfall, supposedly
because police officers, firefighters, teachers and other public workers are
selfishly bleeding the city dry.
You've also probably heard that the only way investment banker-turned-mayor
Rahm Emanuel can deal with the seemingly dire situation is to slash his
public workers' retirement benefits and to jack up property taxes on those
who aren't politically connected enough to have secured themselves special
exemptions.
This same story, portraying public employees as the primary cause of budget
crises, is being told across the country. Yet, in many cases, we're only
being told half the tale. We aren't told that the pension shortfalls in many
US states and cities were created because those same states and cities did
not make their required pension contributions over many years. And perhaps
even more shockingly, we aren't being told that, while states and cities
pretend they have no money to deal with public sector pensions, many are
paying giant taxpayer subsidies to corporations - often far larger than the
pension shortfalls.
Chicago is the iconic example of all of these trends. A new report being
released this morning shows that the supposedly budget-strapped Windy City -
which for years has not made its full pension payments - actually has
mountains of cash sitting in a slush fund controlled by Mayor Rahm Emanuel.
Indeed, as the report documents, the slush fund now receives more money each
year than it would cost to adequately finance Chicago's pension funds. Yet,
Emanuel is refusing to use the cash from that slush fund to shore up the
pensions. Instead, his new pension "reform" proposal cuts pension benefits,
requires higher contributions from public employees and raises property
taxes in the name of fiscal responsibility. Yet, the same "reform" proposal
will actually quietly increase his already bloated slush fund.
But it gets worse: an investigation by Pando has discovered that Emanuel has
been using that same slush fund to enrich some of his biggest campaign
contributors.
How a "shadow budget" is bankrupting Chicago
The new report, from the taxpayer watchdog group Good Jobs First, shows how
Chicago's roughly 150 "tax increment financing" (TIF) districts divert
property taxes out of schools and public services and into what is now known
as Chicago's "shadow budget." That's a slightly nicer term for what is, in
practice, Emanuel's very own sovereign wealth fund.
Living up to his billing as "Mayor 1%," Emanuel has used the fund to (among
other things) offer up $7 million of taxpayer cash for a new grocery store,
$7.5 million for a proposed data center, $29 million for an office high rise
and $55 million for a huge new hotel (and that latter project is on top of
$75 million more in tax money Emanuel has offered up to build a private
university a new basketball stadium). And these are just a few of the
corporate subsidy proposals in a $300 million spending spree Emanuel has
championed at the very moment he has pled poverty to justify pension cuts,
property tax increases and the largest school closure in his city's history.
Contrary to the story of public employees bleeding taxpayers dry, the Good
Jobs First report proves that the slush fund is the root of the city's true
fiscal problem. As the municipal budget figures show, over the last 14 years
Chicago refused to make its necessary pension contributions. Yet, at the
same time, the city's TIF-based "shadow budget" skyrocketed. In effect, more
and more public revenue that was contractually obligated to pensioners was
being diverted by politicians to fund TIF subsidies, many of which go to
subsidize wealthy corporations.
The scheme has gotten so out of control that, according to Good Jobs First,
annual TIF revenues now far exceed the annual cost of funding the city's
pension systems. The report shows that in 2013 Chicago's pension costs were
$385 million whereas Emanuel's slush fund that year received $457 million.
For his part, Emanuel has insisted that roughly a third of TIF funding goes
into schools (at his sole discretion, of course). Yet, his slush fund is so
opaque there's little way to verify this claim. Indeed, Chicago's local
public radio station WBEZ recently noted that it "has repeatedly requested a
breakdown of all current TIF-funded projects, but [the Emanuel
administration] has not yet provided it."
Enlarging the slush fund under the guise of "reform"
What is certain is that while Emanuel has been shuttering schools and
proposing big pension cuts, he has also refused to release more than $800
million in surplus taxpayer monies sitting in his slush fund. He has also
killed legislation that would force him to put at least some of those
resources into plugging school funding gaps and pension shortfalls. Instead,
as of this week, he has put forward a proposal that uses the guise of
pension "reform" to further balloon his corporate-subsidy slush fund.
Of course, that's not how it is being billed. Emanuel's administration
insists the proposal "strikes the right balance of reform and revenue and
serves as an honest framework in which everybody gives something." Not
surprisingly, the notion that the mayor's proposal is about "sharing the
pain" has been loyally echoed by much of the Chicago press. Yet, there's one
group that is being exempted from sacrifice and that will likely be further
enriched by Emanuel's proposal: Chicago's corporate class.
As the Chicago Reader's Ben Joravsky reports, Emanuel's proposal will
actually "cut payments to municipal retirees, jack up property taxes, and
give the mayor more slush funds to play with." Here's how this latest
wealth-transfer scheme works:
If the mayor raises the overall tax rate to fund his pension bailout, he is
of course raising the rate in TIF districts thereby. That means more
property tax dollars will flow into the TIF bank accounts. Think of it as
more slush for the fund.
Remember, the mayor says he's cutting benefits for geezers cause Chicago's
dead broke and he wants to limit the burden on beleaguered taxpayers.But, as
I like to point out, there's "broke" as in "We gotta make some retired Water
Department clerk live on less" and broke as in "Ah, what the hell-might as
well add a little more slush to the pile.".
So in short.Mayor Emanuel cuts benefits to retirees, jacks up your property
taxes, and brings in more cash for things like the River Point office
building in the West Loop, the Hyatt hotel in Hyde Park, the aforementioned
South Loop basketball arena for DePaul, and that South Loop hotel for
Marriott.
The question, then, is why? With his reelection poll numbers plummeting, why
would Emanuel refuse to give up some of his slush fund? Why would he instead
propose a plan that increases the slush fund and threatens to anger
property-tax-averse voters and enrage pensioners? Why, in short, is he so
protective of the slush fund?
Still an "insider's game"
As usual, one answer can be found by following the money. When you do that,
you discover that despite Emanuel's declaration that "government can no
longer be an insider's game, serving primarily the lobbyists and
well-connected," the TIF scheme is often exactly that - an insider's game.
And, as Pando's investigation into the TIF program proves for the first
time, the corporate beneficiaries of that insider's game just so happen to
be Emanuel's major campaign donors.
For example, just after Emanuel took office, his apparatchiks on Chicago's
City Council passed that $7 million TIF subsidy that will benefit grocery
chain Mariano's Fresh Market. Mariano's is owned through a parent company by
Willis Stein & Partners, whose CEO gave Emanuel $25,000 just months before
the TIF was approved.
Similarly, in the above mentioned data center proposal (which fell through),
Emanuel offered to use his TIF authority to let private equity firm Madison
Dearborn Partners and real estate company JDI Realty get away with not
paying back $7.5 million in TIF money that is still owed to taxpayers.
Madison Dearborn Partners is one of Emanuel's biggest sources of campaign
cash.
Then there is Emanuel's $29 million office-tower TIF. That boondoggle will
underwrite the new Chicago headquarters of DLA Piper - the same law firm
whose employees have given Emanuel more than $125,000. The law firm will
benefit not only from having its leased office space effectively subsidized
by taxpayers, but also from the preservation of TIFs in general, as the
firm's Chicago office has a long history of TIF legal work. As just one
example of that, DLA Piper is the law firm involved in the $4.5 million TIF
Emanuel's allies engineered for Vienna Beef.
Not to be forgotten is Emanuel's $55 million TIF for a massive new hotel
near Chicago's convention center. According to the Chicago Tribune, Emanuel
appointees on the Metropolitan Pier and Exposition Authority awarded
commercial real estate company Jones Lang Lasalle the big construction
management contract that will benefit from that huge TIF. One of the largest
shareholders of Jones Lang Lasalle is Ariel Investments, whose president
gave Emanuel's campaign $31,500.
There are likely more such examples, and we'll keep digging to uncover them.
What we know now is that the real estate and financial industries are among
the big beneficiaries of Emanuel's shadow budget. The former often benefits
from TIF subsidies of development deals, while the latter often either has
ownership stakes in TIF projects or sells off the debt at a profit in the
financial markets. And - surprise, surprise! - campaign finance data show
that those two particular industries bankroll Emanuel's campaigns.
So again, why is Emanuel aggressively trying to preserve his slush fund,
even if it means inflicting unnecessary budget pain on retirees and
rank-and-file taxpayers? Because preserving his slush fund defends the
people he really represents - the financiers who sponsor his political
career.
Pando contacted Mayor Emanuel's office for comment on this story (~2hrs ago)
but they had not responded by publication time. We will update this story if
we hear back.
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