Skip to main content

Check out the story below about a lawsuit that puts every public pension plan at risk. I might be out on a limb here but I think this is how the financial industry and their willing servants in congress & states are going to get their greedy hands into public pensions- by changing the bankruptcy laws, one challenge at a time. More below the pretty squiggle.


The financial industry is adept at challenging arcane legalities in their favor. The Enron case and subsequent bankruptcy "reforms"is the template for this scheme. Remember what happened to all those workers when they sued the bankrupt Enron for just a part of their pensions? They got 0 from the court. Every corporate bankruptcy since then, without a union labor force, has stolen their workers pensions after a bankruptcy and the workers have no legal recourse for any recovery in court. The only individuals who recover anything are the investors. This is why we need strong unions.

Is it any coincidence the case is being heard in the Northern Marianas -home of Jack Abramoff & Tom Delay's criminal activities?

In 1959 Jimmy Hoffa was indicted by the Eisenhower Justice Dept for "borrowing" from the Teamsters pension funds. He invested the money in a failed scheme and had planned to pay it back but couldn't. This is exactly what Christine Todd Whitmann did to the NJ pension fund when she was gov. Billionaire tax cuts, capital gains cuts and federal govt austerity assures pension shortfalls. What is common practice by today's business standards will soon become common practice if states and localities declare bankruptcy. Consider poor cities who are coerced to replace elected mayors with  corporate managers as just occurred in Detroit. Such a 'CEO's' can drain the pension funds and be long gone before public workers learn they have no more pension.

It's amazing how easily congress, their financial owners and the courts have re-defined fraud.

http://www.npr.org/...

"The case is in front of a judge right now, and a central question in the case has ramifications for states and state employees all across the mainland: Is a pension fund separate from the government or part of it?

Under U.S bankruptcy law, commonwealths and states cannot file for bankruptcy, according to David Skeel, a law professor at the University of Pennsylvania.

The pension fund is arguing that it works for the commonwealth of the Northern Mariana islands but it is not part of it.

'They need to show separateness," says Skeel. 'They need to show they are not just a branch of the commonwealth but they really are a separate entity."

Imagine what Scott Walker, John Kaisch, Rick Scott, Rahm Emanuel, Rick Snyder, Chris Christie, et al. (including every right winger, neoliberal mayor or gov in the country), will do to public servants if this law rules against public pensions?  
On Wisconsin and beyond!
EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  States cannot declare bankruptcy (2+ / 0-)
    Recommended by:
    misslegalbeagle, johnny wurster

    However, they can simply default on obligations if they want to do so because they are sovereign entities. Under either theory of law, the state can not pay pensions: in fact under the "sovereign state" theory it's easier for them to default, since under bankruptcy they have to justify it to a court.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Fri May 25, 2012 at 07:07:50 AM PDT

  •  I've been predicting this possibility for years. (2+ / 0-)
    Recommended by:
    grimjc, lostinamerica

    The crooks are in charge at just about all levels.

    It's going to take a revolution to reset this country.  I probably won't live to see it, unfortunately.

    If the plutocrats begin the program, we will end it. -- Eugene Debs.

    by livjack on Fri May 25, 2012 at 08:33:03 AM PDT

  •  snort. (0+ / 0-)
    How did the fund get into trouble? Part of the problem, according to Igisomar: The benefits were very good.

    The pension fund pays benefits to an employee's spouse and children long after the employee has died. Adopted children were included, so many government retirees adopted their own grandchildren so that they could receive benefits.

    Ruth Tighe is former employee of the commonwealth's energy office. She says the law that allowed her to retire with so little government service should never have been passed.

    "At the time when I retired there was a law on the books that said you only had to work for 3 years, " says Tighe. "And if you worked for the government for 3 years, you could retire and start collecting your pension at age 62."

    •  It is instructive to compare the pension benefits (0+ / 0-)

      given to public employees to workers in the private sector.

      Public employees were over-promised and legislatures compounded the problem by refusing to fund the extravagance. Workers in the private sector have to fight a defensive battle just to hold unto their relatively poor (public sector to private sector) pension benefits.

    •  1%ers stole pensions- overpaid themselves (1+ / 0-)
      Recommended by:
      lostinamerica

      Every public worker pays a portion of their salaries into pension funds. Unless you support slave labor, the contributions belong to the workers. Dipping into that fund is theft. Legal or not.

      As I noted- borrowing from pension funds was considered a felony when Jimmy Hoffa did it to the Teamsters in 1959.

      The point of this diary is that the 1% are rigging the courts and re-writing laws protecting CEOs and shareholder interests- not in their workers interests. The extravagant benefits are those of the CEO's (e.g., Rick Scott's golden parachute from HCA after defrauding medicare of billions, anyone???)

      When corporations raid their employees funds- as in the case of Enron, the rigged bankruptcy laws protected the investors.

      When politicians raid their state and local pension funds, as Whitman did to NJ, they cut taxes for the same thieves on Wall St that gambled us into the 2008 depression, that has impoverished state funds.

      Pension theft must end.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site