Time to Party In the Sun

Why I have a picture of belly dancers is at the top of this post will become clear as you read.

Let me start by saying I don’t want you to have any doubt where I’m coming from on this.

I am royally pissed off and this is personal. I’m a state retiree and I’ve written a lot about the Kentucky Retirement Systems. But two items in the Herald Leader recently caught my eye.

First we have the story on how the legislature has backed off requiring the local governments and school boards to meet their obligations.

“Despite a warning that "a day of reckoning is coming," the Senate gave final passage to a bill Thursday that would give local governments more time to make payments into the state's ailing pension system.

House Bill 117 now goes to Gov. Steve Beshear, who is expected to sign it into law.

The Senate voted 29-8 on the measure though Sen. Tom Buford, R-Nicholasville, noted that a Legislative Research Commission analysis showed it would save local governments money in the short term but not in the long term.

The analysis said the bill would save local governments and schools about $40 million next year and $60 million in 2011. But it would cost them $120 million more over the next 20 years to compensate for investment earnings lost, Buford said.”

Then we have the story about how Greg Stumbo and David Williams feel it is necessary to screw future state employees rather than the government meet its’ obligations.

“With only two working days left in the 2009 General Assembly, it's too late to take up the issue in this session. But Senate President David Williams and House Speaker Greg Stumbo said the General Assembly is likely to consider the matter over the next year.

Their comments came during their weekly Friday news conference in the Capitol.

Williams, R-Burkesville, said the Beshear administration and the legislature need "to come to grips with the fact that we have a pension plan that we cannot allow people to continue to enter with the level of benefits that they have now."

"It is out of touch with what is happening with the private sector. It is a pension plan that cannot be sustained as far as new employees."

Asked if he will push for reductions in benefits for new state hires, Williams said, "For new employees, we need to have a different pension plan."

Williams criticized KASE leader Jackson's opposition to a review of the state pension plan.

"Doesn't he understand the economic times we're living in?" asked Williams.

Stumbo, D-Prestonsburg, said the legislature will have to review the pension plan for new hires because of the troubled economy.

He said "the solution that we thought was corrected" in a special legislative session last year is likely to be revisited.

"We need to think about long-term strategies," Stumbo said. "It's going to take a rethinking of the funding mechanism."

Now the legislature has already screwed the existing retirees. If you think setting a flat 1.5% cost of living adjustment is the same as pegging the adjustment to the Consumer Price Index then you can’t do math and probably qualify as a member of the General Assembly.

But these three things are not enough to truly piss me off. What is currently going on in Florida has sent me over the top. I told you we would get back to the belly dancers.

I understand the working majority of the Kentucky Retirement Systems and Executive Director and probably new General Counsel of the Kentucky Retirement Systems are going to a conference in Florida. That would be Chairman of the Board Randy Overstreet, Board Members Susan Horne, Bobby Henson, Patricia Ballenger, and Lew Reynolds, along with Executive Director Mike Burnside and General Counsel Schuyler Olt.

The conference is staged by Robert Klausner.

Here is info on the 2009 conference but you really want to watch the video of the 2008 conference (click the Client Conference link above the agenda), be sure to watch the whole thing, the best part starts at about three minutes into the video, (remember the belly dancers).

I’ve talked about Klausner before and his involvement in some questionable dealings with pension funds.

You have to kind of admire a guy that can triple dip from a pot of money.

First Klausner makes hundreds of thousands of dollars from the KRS, he then makes money off of referral fees on class action (see Forbes) and finally, (and this is the best) he makes more money by charging hundreds of thousands to money managers (the talking heads in the video) to speak at the conference, where else are the speakers going to get access to a potential investors with billions of dollars to invest, like our own KRS Trustees.

So here are some things that Greg Stumbo, David Williams, Jonathan Miller, Steve Beshear, and all of the media should be looking at.

Why are four or five Trustees and perhaps staff, many with spouses and girlfriends, spending 3 and 4 days at the Hyatt on the state dime?

Here are some thoughts.

Most of the content of conferences happens in one or two days and the most efficient way is to fly up in the morning stay one night and fly back the next evening. (Not 3 or 4 days)

Conference content should be shared so at the maximum 1 trustee and 1 staff should attend to maximize benefit.

5 Trustees discussing pension issues together is an open meetings issue.

1 Trustee will have only 2 weeks left on the board after attending the conference which provides little or no value to the system. (Parting Gift) Patty Ballenger

A trustee brought up at the August 2008 board meeting that the New York Times had written negatively about this specific conference over conflict of interest issues and that Forbes had written negatively about Klausner. This same trustee brought up in the February 2009 meeting that the host of the conference was accused of bad legal advice by one of the indicted trustees in San Diego.

And finally this one is for the folks at the Herald Leader;

I really wish you would spend some of the energy you spent on the Lexington Airport Scandal looking at these guys. Call their offices, call their homes, call their cell phones, (you can’t tell me the Governor doesn’t have the cell numbers) just pay attention and follow the money.

And one final picture from Taverna Opa for the ambiance of the conference.