Motoring around the World on Motor City Workers’ Dime

by Ivan Osorio on June 15, 2009

in Economy, Labor, Politics as Usual

Detroit can astound even the most seasoned political cynic, and now it’s done it again. As the Detroit Free Press reports, the trustees of the city’s two public employee pension funds have been enjoying perks that even some CEOs would envy, apparently on the pensioners’ dime.

The trustees who oversee Detroit’s two public pensions, their lawyers and staff spent $380,000 over the past year circling the globe to attend conferences — often traveling in packs, with virtually no limitation on where they went or how often they traveled.

Trustee Ronald Gracia spent the most time on the road — billing the General Retirement System for $105,000 in travel, including three trips to Singapore and $18,600 on travel to Hong Kong, according to records provided by the pension funds.

The two public pensions, with 21 trustees, have guarded their travel records from scrutiny. The Free Press sued to get the records — which are actually only summaries from the past year.

The funds have yet to turn over actual receipts that would show, for instance, where trustees and staffers stayed and how they spent some of the money. Other documents have been destroyed.

Such apparent graft by public officials is hardly new, but today it should ring alarm bells about defined benefit pension funds in general, and union pension funds specifically. Many union pension funds today are severely underfunded, so any workers who could be made to join such funds should be concerned.

The so-called Employee Free Choice Act’s binding arbitration provision would do just that, by enjoining a federally appointed arbitrator to impose a contract on a newly unionized company that could include a provision for workers to join the pension fund of the union that now represents them, and for the employer to pay into it. (Thanks to Marc Scribner for the Free Press link.)

For more on pension funds, see here, here, and here.

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