By David Stanczak
If we had the money, we should build a State Hall of Shame to display evidence of corruption, mismanagement, and incompetence.
The SEC just announced a settlement of its case against the State of Illinois over lack of financial disclosures in its bond sales. The local AP coverage of the event ends with the statement that “a solution [to the pension problem] is lawmakers’ top priority.” The guy who came up with that line should be writing for SNL.
A few points for perspective: First, the SEC didn’t charge negligence, but fraud, the kind of stuff that lands people in jail.
Second, the ultimate cause of the problem was a $2.3 billion “pension holiday”. “Pension holiday” in Illinoispeak means that, for a 2-year period, the State didn’t pay $2.3 billion to pension systems that it was supposed to. The State told its bond buyers that it wasn’t paying the $2.3 billion, but it didn’t say what impact that would have on its ultimate obligations. The State should have disclosed that we’re going to have to pay about double the amount we didn’t pay on time, something the General Assembly’s Commission on Government Forecasting and Accountability had already reported to state officials.
But, had it truthfully said, “We’re going to keep kicking the can down the road for as long as we can get away with it,” the bonds probably wouldn’t have been sold. And there were elections coming up, and actually dealing with a problem is especially taboo before elections. Hence, the holiday…and the nondisclosure.
Third, everybody is blaming Blago, the guy who’s already in jail. He was a major participant. But Blago didn’t unilaterally declare a holiday. He had help from others, namely Emil Jones, who has since retired and limited his damage to the State to taking his bloated pension payments; and Mike Madigan, whose ability to run the state won’t be complete until his daughter is elected as the next governor
We postponed one bond sale earlier this year because our credit rating got downgraded. Wanna bet we do it again? After all, would you loan us money?
David Stanczak, a Forum commentator since 1995, came to Bloomington in 1971. He served as the City of Bloomington’s first full-time legal counsel for over 18 years, before entering private practice. He is currently employed by the Snyder Companies and continues to reside in Bloomington with his family.
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