Wednesday, August 21st, 2019

Milwaukee County had a pension scandal?


Bruce Murphy takes a look at Milwaukee County’s lawsuit against Mercer:

It is remarkable how little has been written about Milwaukee County’s suit against Mercer Human Resources Consulting. The stakes for county taxpayers are high. The county has hired actuarial experts who have estimated the total cost of the notorious November 2000 pension plan to be $600 million.

The county has also uncovered considerable documentation suggesting the Mercer did a shoddy job when it came to advising on and estimating the costs of the infamous “backdrop” program, which has allowed county employees to collect lump sum payments as high as $600,000 while also getting a monthly pension payment for life. If Mercer is found at fault, the county could win big. (Two years ago it asked for a settlement of at least $100 million.)

Milwaukee Journal Sentinel stories have barely touched on the details in the court filings.

Murphy also discusses Dave Umhoefer winning the Pulitzer Prize for his work on the county buyback program first reported by Bruce Murphy.

The irony of the JS winning for writing about the county pension system, the story it didn’t cover until it was forced to, is remarkable. Even when it finally wins, there’s a dark cloud shading the silver lining.

But it’s still a Pulitzer, for a paper that’s never had one, and whose predecessor paper, the Milwaukee Journal, had last won in 1977. That’s a long dry spell. The victory validates the strategy of Kaiser to recruit nationally for talent. He did, and brought in enterprise and investigative editor Mark Katches, who had overseen two projects that were Pulitzer finalists at the Orange County Register. Katches seems like the real thing, and the JS appears to be giving him the resources needed to do investigations. I hope there are more Pulitzers to come for the paper.

The winning story involved a county buyback program that allowed employees to buy credit toward their pension for previous years of service, even though they had originally waived payments to the pension during those years (for seasonal jobs in their youth, etc.). Horne and McBride note that I wrote first about the county buyback program in 2002. True, but I did nothing about it. JS reporter David Umhoefer learned about the program and did a strong, in-depth story.

The paper hired two actuaries to crunch the numbers on this program, and they estimated a $50 million impact from several hundred employees who got a buyback. Of course, most of the cost actually came for those employees who were thereby vaulted into the elite group that benefited from the backdrop and the 25 percent bonus passed in November 2000 – the pension sweeteners I wrote about that may cost as much as $600 million and led to the ouster of eight elected county officials.

Still, Umhoefer added another discrete tale to the ongoing story of cronyism and greed that has characterized all aspects of the county pension scandal. More particularly, his piece dramatized the impact a daily paper’s beat reporter can have. Umhoefer took over the courthouse beat in 2002, just after the pension scandal hit, at a high-pressure time, when the county and the paper’s coverage of it were in the spotlight. He waded through all the cross-currents, covered the beat with energy and clarity, and brought that knowledge to bear in the buyback story. His Pulitzer winner, in short, was really the culmination of his work as a beat reporter. And yes, it did remind us of the enduring value of newspapers. Whether in print or online, most journalistic scoops are still being delivered by newspapers, and we all benefit from the work they do.

Gracious of Murphy, considering he could’ve wondered when he gets to throw out the first pitch at Miller park, too.

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