Union skullduggery

For anyone who doubts the real goals and objectives of unions, the following from James Taranto's daily column in the WSJ online is a must read:

By JAMES TARANTO

In his Labor Day speech in Detroit, Barack Obama issued a ringing endorsement of government employee unions:

Having a voice on the job and a chance to organize and a chance to negotiate for a fair day's pay after a hard day's work, that is the right of every man and woman in America--not just the CEO in the corner office, but also the janitor who cleans that office after the CEO goes home. Everybody has got the same right.

And that's true for public employees as well. Look, the recession had a terrible effect on state and local budgets--we all understand that. Unions have recognized that; they've already made tough concessions.

From the president's hometown comes an example of what he is actually supporting. TheChicago Tribune reports that an investigation it conducted with WGN-TV found "23 retired union officials from Chicago stand to collect about $56 million from two ailing city pension funds."

That's an average of $2.4 million each, and some will rake in even more. Dennis Gannon, a former president of the Chicago Federation of Labor, stands to collect some $5 million. In line for $4 million apiece are Liberato "Al" Naimoli, president of the Cement Workers Union Local 76, and James McNally, vice president of the International Union of Operating Engineers Local 150.

"Since the 1950s," the Trib explains, "city workers who take leaves of absence to work full time for unions have been able to remain in city pension funds if they choose. The time they spend at their union jobs counts toward their city pensions."

Ill. Attorney General Office

David Gannon, pensioner

Union jobs, however, are far more lucrative than city jobs. Gannon's city salary was $56,000 a year; his union salary, $200,000. But he retired from his city job in 2004--at age 50, and 13 years after beginning a leave of absence. Between then and 2010, when he retired from the union, he collected both the $200,000 union salary and a $150,000 city pension.

How did the city end up paying him a pension nearly three times his salary? That's where things get interesting. Few labor leaders took city pensions, the Tribune reports, "until the law was changed in 1991 to base those workers' city pensions on their union salaries instead of their old city paychecks, dramatically boosting the amount they could receive"--a provision that "became law with no public debate among state legislators and, more importantly, no cost analysis."

And no accountability: "No one from either the state Legislature or city government will take credit for the law, which passed in 1991, and the process of drafting pension legislation in Springfield is so shrouded in secrecy that there's no way of knowing exactly whom to hold responsible."

And no possibility of reversal: "The state constitution says pension benefits cannot be diminished once they are earned."

"Gannon told the Tribune that he was only following the law in filing for a city pension," the paper reports. The scandal isn't that what they're doing is illegal but that it is legal.

This particular provision is unique to Obama's home state, the Tribune reports: "Pension experts from around the country say they've never heard of such a perk for union leaders." But unions have any number of perfectly legal ways to rip off the taxpayers. As we noted in July, the Wisconsin teachers union runs its own insurance company, the WEA Trust. Until Gov. Scott Walker's reforms took effect earlier this year, the union negotiated "collective bargaining" agreements obliging local school districts to pay above-market premiums for its health benefits.

And as The Daily's Jillian Melchior reported last month, state pension funds frequently make risky investments, knowing that if they don't pan out, taxpayers will have to make up the losses. What's more, the boards that manage these funds are stacked with union representatives and plitical appointees: "Because public unions are an influential constituency, they're inclined toward union priorities."

That is the system President Obama defended on Labor Day. And his support for it is not merely rhetorical. Both the 2009 stimulus and the recently proposed Stimulus Jr. include vast payments to states and localities--in effect, a federal taxpayer bailout for governments that have been so profligate with their own taxpayers' dollars. Some of that money, of course, gets kicked back as campaign contributions and independent expenditures to support the campaigns of Obama and other Democrats. It's all legal, but that doesn't mean it isn't a scam.