FOR IMMEDIATE RELEASE
January 27, 2010
Contact:
Craig Westover, Communications Director
Pat Anderson for State Auditor
612.309.1492
craigw@PatAndersonForAuditor.com
Former State Auditor Pat Anderson Defends Minneapolis Suit to Recover Pension Funds Overcharges
Anderson notes irony of DFL “eating their own” over DFL policy
St. Paul – In commenting on the controversy stirred up by campaign literature criticizing Mayor R.T. Rybak’s role in a lawsuit brought by the City of Minneapolis against the Minneapolis Police and Firefighters pension funds, former State Auditor Pat Anderson, a Republican and current candidate for State Auditor, supported the DFL mayor’s actions and noted the irony of the DFL “eating their own” over DFL policy.
In support of the actions of Mayor Rybak and the City of Minneapolis, Anderson said:
“Right and wrong is not a partisan issue. While politically I disagree with Mayor Rybak on many fronts, as the State Auditor whose staff uncovered irregularities in the pension funds, I believe the City of Minneapolis acted in accordance with the law and its fiduciary responsibility to the taxpayers of Minneapolis in pursuing reimbursement from the pension funds for excessive charges made to the city.”
By state statute, annual pension payments under these plans are tied to the current salary levels being paid to top-grade police officers and firefighters currently employed by the City of Minneapolis, including benefits like vacation, sick leave and overtime pay. Anderson’s office concluded that the funds in question overestimated the salary levels of current police officers and firefighters, which resulted in approximately $50 million in overcharges to the City.
“Based on my office’s recommendations, the city attempted to resolve the discrepancies with the pension funds,” said Anderson. “When that effort failed, the city properly took legal action to recover the overcharged amount. I testified on behalf of the city. This past November, the court ruled in favor of the city, ordering the funds to pay back $10 million of overcharges and to reduce their claims going forward. This resulted in the pension reductions described in the letter sent to DFL activists.”
The controversy, says Anderson, shows what happens when union influence on the legislature is so strong that union desires are formulated as state statute and removed from local control. By statute the boards of directors of these funds are controlled by retirees for retirees with no taxpayer checks and balances. The city, which is responsible to fund the pensions, has virtually no control or input into the management of the funds.
“This is a prime example of the state usurping local control and local accountability while imposing costs on a local unit of government,” said Anderson.
“The irony,” says Anderson, “is the DFL Mayor is being attacked by some anonymous DFL source (using an allegedly illegally obtained DFL delegate list) for trying to correct a situation caused by DFL policy supported by unions – traditionally a DFL interest-group — because an active Republican State Auditor stood up for the taxpayers of Minneapolis.”
“That fact that Democrats are eating their own over the problems of the union-run Police and Firefighter’s pension funds is what necessarily happens when the DFL practices interest-group politics instead of making policy on sound economic principle,” says Anderson. “Ultimately, the State Auditor is the last line of defense for local taxpayers when the Legislature usurps local authority. The relationship between the state and local units of government must be changed, and I will use the influence of the State Auditor’s office to push for necessary reforms.”
The anti-Rybak literature marks the second time in recent weeks that Democrats have dined on their own kind over policy issues of their own making. DFL Speaker of the House and candidate for governor Margaret Kelliher was recently fined for violating campaign finance laws, drawing the ire of her DFL rivals for DFL endorsement.
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