"Yeah, We Lied, So What?"
- Illinois broke federal securities laws and “misled investors” in misstating the true health of the state’s depleted pension funds between 2005 and early 2009, the Securities and Exchange Commission announced Monday.
The finding of securities fraud doesn’t subject Illinois to any fines or penalties, but it represents another fiscal black eye for a state burdened by the worst bond rating in the country and completely underwater by inaction in solving its $96 billion pension crisis.
The SEC finding, the second such action against a state, focuses mostly on misstatements linked to $2.2 billion worth of bond offerings issued during impeached ex-Gov. Rod Blagojevich’s administration. New Jersey was cited in 2010 for similar disclosure failures regarding pension underfunding in its bond offerings.
No penalty, no fines, and evidently, no promises to do better or to make up for the lies.
Maybe they'll float another bond issue to kick the can even further down the road - your great grandchildren will be paying this somehow....if they still live here.
Maybe they'll float another bond issue to kick the can even further down the road - your great grandchildren will be paying this somehow....if they still live here.
Labels: pension
posted by SCC at 12:02 AM
21 Comments:
I'd be LMFAO if it wasn't so sad.
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SEC nominee White promises "unrelenting" enforcement
(Reuters) - Mary Jo White, the nominee to head the Securities and Exchange Commission, plans to tell lawmakers on Tuesday that she will bring a "bold and unrelenting" enforcement program to the agency if she is confirmed by the U.S. Senate.
"Investors and all market participants need to know that the playing field of our markets is level and that all wrongdoers -individual and institutional ... will be aggressively pursued by the SEC," said White in prepared testimony released ahead of her confirmation hearing before the Senate Banking Committee.
"Proceeding aggressively against wrongdoers is not only the right thing to do, but it also will serve to deter the sharp and unlawful practices of others," White added.
http://www.reuters.com/article/2013/03/11/us-obama-nominations-sec-idUSBRE92A0XQ20130311
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Not to worry tho. White will get her lump sum pension payment!
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[...].. Mary Jo White, U.S. President Barack Obama’s choice to run the Securities and Exchange Commission, may be compelled to provide more information about her ties to large banks as senators press her today about how she would operate as Wall Street’s regulator.
Some Democrats on the Senate Banking Committee who will question White at a nomination hearing say their concerns probably don’t threaten her confirmation. White, 65, has said she would retire from New York-based Debevoise & Plimpton LLP, where she has served as a lawyer defending Wall Street, if she’s confirmed by the Senate
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Retirement Payments
White has said Debevoise would pay her a lump-sum retirement payment within 60 days of her starting at the SEC. The payment would replace her monthly retirement payments for four years. She is eligible for lifetime monthly payments from Debevoise of about $42,500, according to her financial disclosure statement.
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Think she's gonna turn against all her prior Wall Street clients?
I would give ANYTHING! if somebody could find something that would string 'ol Mikey Madigan up by his short-n-curleys! He's a douchebag of the worst kind and deserves to burn in hell!
The socialist politicians lie and it's OK. The banks and insurance company lie, cheat and steal, and it's not only OK, they get a bail out courtesy of the taxpayers.
Revolution is coming, my friends. A revolution to take back this country from the subversive scum who are bleeding it dry.
Does the phrase "Culture of Corruption" sound familiar?
Illinois is one.
rb
Anybody going to prison for that?
Actually Illinois municipal bonds have a decent return for those who are risk averse to the stock market. The chances of Illinois defaulting on there obligations are minimal at best. As long as the sheep are around to pay the taxes who elect the thieves.
How about those bond sales for the Field Museum too...
via CapitalFax
* The Tribune ran a story not long ago about a $90 million bond sold by the Field Museum that it didn’t have enough resources to service. Some of the juicier parts…
Although the bonds, issued in September 2002, were rated as investment grade, there were signs that the Field might not be ready to take on that much debt. Less than a year before, museum staff assessed the Field’s bond capacity at only $50 million, according to a letter submitted to the state. […]
The loan was risky not just in size but in structure. Unlike previous bonds the Field took out, it allowed the museum to make lower interest payments up front and push off bigger ones until later. Meanwhile, no principal was due until the loan matures in 2036.
The bond pushed the museum’s total liability to $200 million — more than the $189 million in assets it had available to pay off debt, according to the Field’s audited financial statements. The Field’s total annual bond debt payment rose from $2.4 million in 2002 to $4.9 million in 2003 It now stands at $7.5 million.
Looks like those crazy no-principal mortgage loans which were all the rage right before the economy collapsed.
Keep in mind that Chicago’s elite financiers have always played a huge role on the Field Museum’s board (and on Bruce Rauner’s campaign, but that’s another story). And those guys appeared to do to the Field what some of them also did to the entire planet.
* Cooking the numbers…
read the entire thing here
They back loaded the play like our pensions were back loaded. We'll make up the payments tomorrow and tomorrow never comes.
Meanwhile..."McCarter announced he would retire and the museum paid him an $874,375 bonus that more than doubled his overall pay from the previous year, according to tax filings "
(( followed by the endowment fund having to be tapped, asset sales, and layoffs ))
What kind of country do we live in ?
Is there no rule of law ?
Are there to be no consequences for crooked politicians ? Corporations ?
WTF is going on here ?
Somebody should go to prison over this. If it were the private sector you can be sure they'd have a perp walk. Daley, Cullerton, Madigan they all knew what was going on, why isn't one of them in handcuffs? This is why we have lost faith in government.
So lets penalize the pension beneficiaries because the State now needs a way out. Oh wait, the beneficiaries have been paying their share into the funds all along! Go figure.
States don't commit crimes. People running the state committed the crimes, so why isn't anyone in jail for these crimes? Blago is too dumb to understand bond ratings, so it certainly wasn't him.
Oh, that's right -- Democrat-controlled SEC and DOJ, and Democrats running Springfield.
Never mind.
the united states government is 14 trillion dollars in debt--- has the SEC warned them about misleading anyone--- Illinois is a train wreck because entitlement programs are killing us--- blaming it on pension obligations is just a way to deflect attention away from the real problem....
HEY! Moe Larry Cheese, Madigan is Irish, he has only, one short curley. But go ahead and string him up, I'm sure it's been pulled before!
Thank God that the Illinois AG was able to root out this fraud like she has with other companies!!
Oh wait. Never mind.
Nice job, Lisa. And people wonder if she is in daddy's pocket.
This is the same state that will protect our pensions through their court system. Depend on that state constitution, state law and state court system?
I think Not.
Cut a deal with the mayor similar to the Korshak deal on retiree healthcare from years ago. That Sgt. Ade had the right idea just went about it the wrong way.
Either that or depend on the great state of Illinois.
WRT: Pensions -- Get a load of this...
via http://www.capitolfax.com/
House Bill 2529 is not about improving infrastructure, or ending ComEd’s smart meter delay. It’s about money — your money! ComEd and Ameren want to get more of you money through higher rates. And they will even charge you interest!
ComEd and Ameren are failing to meet the very metrics they wrote in PA97-0616. But instead of being accountable to ratepayers and legislators, HB2529 would make it look that they are in compliance with the law and grant them retroactive rate hikes plus interest.
As Crain’s Chicago Business points out:
“…ComEd will be allowed to charge ratepayers interest on its unreimbursed pension contributions with no regulatory review.”
also ...
via http://www.chicagobusiness.com/article/20130216/ISSUE01/302169981/proposed-law-would-mean-pension-help-for-comed-higher-rates-for
The state Legislature is poised to give Commonwealth Edison Co. what appears to be a legal right to profit on its pension contributions.
A bill sponsored by Senate President John Cullerton would enshrine in state law an arcane rate-setting issue over which ComEd has fought on and off with state utility regulators for seven years. At stake is hundreds of millions in revenue for ComEd and higher rates for its 3.8 million electricity customers.
A central feature of the measure, which the Senate Executive Committee approved 14-0 last week and which observers believe will fly through the General Assembly in coming weeks, would permit ComEd to collect from Chicago-area consumers a return nearing 6 percent on $1.8 billion in past voluntary pension contributions. That significantly exceeds the utility's cost, laid out in Securities and Exchange Commission filings, to finance those payments to Chicago-based parent Exelon Corp.'s pension plan.
No one disputes that the utility is entitled to recover pension contributions from ratepayers. But a key question is how much ComEd should be allowed to collect in rates to compensate for its financing costs.
The matter is controversial mainly because of the size of the unreimbursed pension contributions—roughly equivalent to the cost of a new power plant. But pension contributions don't provide the same obvious benefits to customers that infrastructure does.
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See that Illinois Senate committee vote 14-0! Retroactive pension funding WITH INTEREST about to be shoved down the taxpayers throats with another CommED rate increase.
How you like them apples?!
A six-percent interest return too!
Nice windfall profit as the ten year US treasuries returns are under 2% and our proposed COLA's where under 3% don't ya think?
There is no rule of law.
Anyone who invest's any money in Illinois or Chicago deserves to get f***ed for stupidity.
I'd rather invest my money in " crack " and get someone stupid to sell it for me, the risk is lower and profits greater. * snark *
A Democratic Government caught lying!
Why is this news?
Look at who is running the place!
I call bullshit on this story. Lets put our thinking caps on for a moment. It is common knowledge that this state is broke folks. It is a prima facie example of the liberal mecca that has failed. Now can someone explain to me how any invester, even the most unsophisticated invester not know that this state is so upside down in debt that at some point I would guess in the next 10-15 years it will go BK and default on all debt, including bond obligations. Really, how can anyone be misled about IL finances other than perhaps how bad they really are? We have had one party lock on this state for 12 years or so. Who owns this mess?
Anonymous said...
I call bullshit on this story. Lets put our thinking caps on for a moment. It is common knowledge that this state is broke folks. It is a prima facie example of the liberal mecca that has failed. Now can someone explain to me how any invester, even the most unsophisticated invester not know that this state is so upside down in debt that at some point I would guess in the next 10-15 years it will go BK and default on all debt, including bond obligations. Really, how can anyone be misled about IL finances other than perhaps how bad they really are? We have had one party lock on this state for 12 years or so. Who owns this mess?
3/12/2013 10:13:00 PM
It isn't so much a question of how someone couldn't know, it's just that they need an excuse for why they were so stupid that they went ahead and bought the bonds and lost out. Kind of like, who would be so stupid as to use a plastic bag as a toy, yet every drycleaning cover has a warning printed on it, telling you not to use it as a toy and therefore not suffocate yourself.
Sometimes you just can't make sense of stuff that's THIS stupid, or people who are THIS stupid, either.
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