Orr orders probe of city's pension funds

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June-20-13, 03:05 PM
TexasT

Orr orders probe of city's pension funds

"Emergency Manager Kevyn Orr launched a probe of the city’s pension funds Thursday amid concerns about corruption, spending and management while union officials signaled they would fight proposed benefit cuts in bankruptcy court. The developments set up a showdown among Orr, pension officials and union leaders, all of whom can influence how quickly the city restructures as much as $20 billion in debt or files the largest municipal bankruptcy in U.S. history.

The pension investigation, first revealed by The News on Tuesday, could end with Orr freezing pensions and ousting trustees who oversee the city’s two retirement funds, which are underfunded, embroiled in a federal criminal probe and fending off complaints about investments and lavish travel."

Quote:

The investigation is a possible precursor to Orr taking control of the pension funds. It also is a response to failed investments involved in a bribery and kickback scandal that has led to federal indictments of five businessmen and former pension officials, including Kwame Kilpatrick's fraternity brother, Jeffrey Beasley, the ex-Detroit treasurer.

The city's pension funds have lost more than $84 million on corrupt investments given to companies during Kilpatrick's tenure, according to federal prosecutors.

"We're concerned about some of the investments not receiving proper vetting and those are investments the pension funds have made into non-traditional securities,” Nowling said. “[[The investments) really have not shown any return since they have been made."

The investigation is expected to conclude in 60 days with a report from the auditor and inspector general. At that time, Orr will know whether he needs to remove the pension funds’ trustees and have state Treasurer Andy Dillon appoint a sole trustee.

http://www.detroitnews.com/article/2...text|FRONTPAGE

Dude is kicking ass and taking names. Between Orr and the US Attorneys Office, Detroit is finally getting cleaned up [[to the extent you can clean it up).
June-20-13, 03:25 PM
Meddle

Quote:

Detroit emergency manager Kevyn Orr speaks with reporters after a meeting with creditors in Romulus, Mich., Friday, June 14, 2013.

http://www.postbulletin.com/news/nat...7df5ca3c7.html

Ummmm, why Romulus? If there was any money spent, shouldn't it have gone to a Detroit facility?
June-20-13, 03:39 PM
TexasT

Quote:

Originally Posted by Meddle

http://www.postbulletin.com/news/nat...7df5ca3c7.html

Ummmm, why Romulus? If there was any money spent, shouldn't it have gone to a Detroit facility?

Easier logitically at the airport itself [[with people flying in from all over) which is where it took place.
June-20-13, 04:01 PM
artds

Quote:

Originally Posted by Meddle

http://www.postbulletin.com/news/nat...7df5ca3c7.html

Ummmm, why Romulus? If there was any money spent, shouldn't it have gone to a Detroit facility?

Detroit is asking creditors to walk away from 90% of what they loaned to the City. Do you really think the City is in a position to dictate to creditors which hotel they should stay at or choose for a meeting? It would almost be an insult. "We'd like you guys to agree to take 10 cents on the dollar. By the way, please stay at one of our hotels so we'll get some tax revenue out of it down the road."
June-20-13, 04:14 PM
TexasT

Quote:

Originally Posted by artds

Detroit is asking creditors to walk away from 90% of what they loaned to the City. Do you really think the City is in a position to dictate to creditors which hotel they should stay at or choose for a meeting? It would almost be an insult. "We'd like you guys to agree to take 10 cents on the dollar. By the way, please stay at one of our hotels so we'll get some tax revenue out of it down the road."

The airport has a Detroit address. I dont know if it gets the taxes.
June-20-13, 04:15 PM
Wesley Mouch

Quote:

Originally Posted by Meddle

http://www.postbulletin.com/news/nat...7df5ca3c7.html

Ummmm, why Romulus? If there was any money spent, shouldn't it have gone to a Detroit facility?

Orr is worrying about important things, not trivialities. He wants those creditors to spend 100% of their time on this issue. Land, cab, listen, commiserate with other creditors, cab, fly.

But back to the thread ... so this corruption has been pretty obvious for a long time -- while the trustees have been 'protesting too much' about how their funds are 150% funded and there's nothing here to worry about.

What took so long? It took a state intervention that we've been fighting against? You wanna worry about where a meeting is being held while our pension trustees have driven us to a financial emergency? We toss up our arms at the loss of democratic control -- meanwhile we ignore the actions that caused the loss of control [[EFM). Then what's got my blood boiling right now is how everyone is saying it doesn't matter who is mayor. What? Its the most important decision we can make right now. Maybe the right mayor would uncover corruption under their noses before some slick out-of-town kid did.
June-20-13, 05:15 PM
cla1945

Wesley, I thought that Kwame would be a good mayor. He had that "something" that made me think he was a good man...boy was I wrong. But that was the first election. The second one, when he was voted in again, I couldn't believe that Detroiters would let him rape and pillage the city again. I thought Bing could help, he's been a talking head with nothing of importance coming out of his mouth. Detroiters will probably elect Barrow, the habitual loser this November.
The State should have been in Detroit years ago, looking into this pension thing. Too many hands in the cookie jar, too much easy access to actual dollars, too many foxes in the hen house...and on and on and on....
June-20-13, 05:36 PM
Packman41
Quote:

Originally Posted by Wesley Mouch

... so this corruption has been pretty obvious for a long time -- while the trustees have been 'protesting too much' about how their funds are 150% funded and there's nothing here to worry about.

What took so long? It took a state intervention that we've been fighting against?.

Some folks are saying that the bondholders should have known better and should get get much less than 10 cents on the dollar. After all, there were all these signs Detroit was going broke.

So let’s look at the signs the Pension Fund Trustees seemed to miss:
- In 2005 [[8 years ago when it was known the CoD was going broke) they issued a bond issue of 1.4 BILLION to refill the Pension Funds. The CoD did not have the money then and where did they think they would get it in the future??
- More recently the CoD fails to contribute to the Funds and gives them an IOU instead. Still crickets from the Pension Trustees.
- The two Detroit newspapers have been running expose’s over the past 10 years citing fraudulent and mis-managed real estate investments that lost millions.
- Monica Conyers goes to jail for taking bribes to get deals approved by the Pension Fund. Ditto for Jeff Beasley and Chauncey Mayfield will be right behind them.
- The FBI starts a criminal probe of the two Pension Funds
- The long-time attorney for the Funds that enabled Trustee shanagans is indicted.
- Instead of safe investments the Fund’s own auditor cites that the
  - Percentage of Debt Securities BELOW investment grade: P&F 66.2% GRS 81.3%
  - Percentage of total assets with indeterminate fair market value: P&F 25% GRS 32%
How in the world do you amass an investment portfolio of bonds [[debt instruments) where 66% and 81% are below investment grade??? This is utterly astonishing!! You could do better with a dart board.

And the very same Pension Fund Trustees that put the funds in this sad shape keep telling their members that everything is fine, nothing to see here, you’re guaranteed, you’re fully funded and we will get back with you after we get return from Hawaii.

And their members bought into it.

Can anyone here stand up and honestly explain how the Pension Trustees missed all these signs?
June-20-13, 05:57 PM
Wesley Mouch

Quote:

Originally Posted by Packman41

...And the very same Pension Fund Trustees that put the funds in this sad shape keep telling their members that everything is fine, nothing to see here, you’re guaranteed, you’re fully funded and we will get back with you after we get return from Hawaii.

And their members bought into it.

Can anyone here stand up and honestly explain how the Pension Trustees missed all these signs?

The Pension Trustees were right. If defined payments to P&F are indeed guaranteed, then the taxpayers of today will pay. Daddy will have to pay. In the meantime, party on.
June-20-13, 06:07 PM
Packman41

Jean Dixon of the Detroit Free Press has been doing a stellar job over the years investigating the Funds and today's column is no different. You need to read it:
http://www.freep.com/article/2013062...und-corruption
June-21-13, 11:19 AM
motz

Quote:

Originally Posted by Packman41

Jean Dixon of the Detroit Free Press has been doing a stellar job over the years investigating the Funds and today's column is no different. You need to read it:
http://www.freep.com/article/2013062...und-corruption

After reading this, how could anyone who collects a pension from this system not say "Lets get these funds fixed, found out who screwed us over and try and get on good footing?" I've seen comments over at Deadline Detroit where people are saying its a state conspiracy to take over the pensions... They have VERY obviously been poorly managed and full of amazingly corrupt individuals.
June-21-13, 11:30 AM
DetroitPlanner

As the son of two retired city employees I say its about time. In addition, as the son of two retired city employees, maybe I need to fix up the basement as a bedroom?

Momma and Daddy might be staying a while!
June-21-13, 11:34 AM
48205to24

Momma and Daddy might be staying a while![/QUOTE]
Did they make you stay in the basement?
:)
June-21-13, 11:36 AM
DetroitPlanner

No but I would be now. They would get the first floor bedrooms else I'd hear em bitch about the stairs! LOL
June-21-13, 12:03 PM
48205to24

http://www.freep.com/article/2013061...-robert-ficano

These are the people who should loose their pensions now, before the county goes bankrupt and we get a bunch of excuses.
Any State/County or City big shots who are in line for big pension payouts should loose this benefit, before the average retiree does.
This is what management [[govt officials) can get away with now that the unions are weakened.
If anybody should be living in a basement it should be these guys.
But for now, when things get hot they move to other department i.e Detroit Water Board.
June-21-13, 12:17 PM
Packman41

Quote:

Originally Posted by 48205to24

http://www.freep.com/article/2013061...-robert-ficano

These are the people who should loose their pensions now, before the county goes bankrupt and we get a bunch of excuses.
...snip...

Agreed. Retiring at 41 guarantees pension fund is unsustainable. Even Social Security is known to be running out of money and needs to be overhauled. Current retirement age [[with full benefits) is something like 67 for that guy.
June-21-13, 08:19 PM
Hypestyles

who are all the trustees of the pension board? Are these paid positions? If not, how much time out of the month/year are these people expected to dedicate to this?
June-22-13, 12:34 AM
Wesley Mouch

Quote:

Originally Posted by Packman41

Agreed. Retiring at 41 guarantees pension fund is unsustainable. Even Social Security is known to be running out of money and needs to be overhauled. Current retirement age [[with full benefits) is something like 67 for that guy.

So some POS bureaucrat gets elected, and agrees to this crap, and we're officially obligated. Great laws we got. With Democratic friends like these, who needs enemies like Republican banks.