Thursday, July 2, 2015

Rahm's Pension Wizardry

As Bozo Show fans from way back, WCT immediately thought of Wizzo the Wizard when we read about Rahm Emanuel's latest pension follies. Wizzo did card tricks, magic tricks, and used sleights of hand to entertain thousands of children. He would do all of this while saying do-di-do-di-do and waving his fingers right before the big payoff. Rahm Emanuel, just a day after funding the Chicago Teachers Pension Fund, directed the city's new CFO to ask for $500M of the $634M back. Now you have it, now you don't. Magic! 

Maybe Rahm and Chicago's CFO Carole Brown were looking at spreadsheets saying, "do-di-do-di-do," as they hit upon the idea to ask for 78% of the pension payment back. Brown called the request a, "big ask." We'd call it another accounting scam, but okay. Brown's wizardry continued as she used words like "cash-flow relief" and "assumed actuarial return." You can almost see her waving her fingers and saying "do-di-do-di-do" to Charles Burbridge, the CTPF's executive director, as she explained the details of her big ask.

In the fine print of Rahm's pension proposals, he suggests combining CTPF with the state's pension fund for more equity. The writers at International Business Times detected a sleight of hand with this change, too: 
What the mayor did not say is that the initiative could end up shifting billions into a fund whose portfolio is run, in part, by Grosvenor Capital and Madison Dearborn Partners, two firms whose executives have together given over $4 million to the mayor's campaigns and affiliated PACs. That includes over $2.7 million from Grosvenor CEO Michael Sacks and his wife, Cari. Sacks has been called Emanuel’s “fixer” and “go-to guy;” he was appointed by Emanuel to serve as vice chairman of World Business Chicago, an economic development group that Emanuel chairs.
The IB Times also notes that, "In fiscal year 2014, Grovesnor collected over $3.2M in fees from the state's Teachers Retirement System, and Madison Dearborn Partners over $370,000." Cha-ching!

Today's 3 part trick is as follows: 1) Take back 78% of a payment you just made, 2) Suggest combining pension funds under the guise of equity, and 3) Make sure to further enrich hedge fund pals and campaign donors in the process. Yes, and don't forget to go full-tilt Wizzo and finish with a flourish and the signature, "do-di-do-di-do" so we know when the trick's over.

No comments:

Post a Comment