September 22, 2011
by Ronald Radosh
This story, had it come out a bit earlier, would have been the perfect Labor Day special. It is not what the AFL-CIO union bosses want its membership to hear. We all recall President Obama standing on the podium with Richard Trumka and the other labor chieftains, railing about the need to "take out" the Republicans, and give the workingman the dignity, salaries and other perks they need to end income inequality and to become empowered. "Tax the rich," they all scream—apply the "Buffet law" and see to it that the regular employee pay a lower tax than the greedy billionaire, who like Buffet, sets up businesses, employs people who earn a living, and yet supposedly engages in no activity of a worthwhile nature except to see to it that he personally gets rich. As old Karl Marx might have once said, confiscate the property of the bourgeoisie, redistribute the wealth to the working class, and allow them to become the masters of society.
Well, it seems that Marx's dream is coming true in Chicago, but not exactly in the manner in which he thought it would occur. No social revolution, no mass movement, no movement of the working class to power through the long march through the existing institutions that the Gramscian New Left once proposed. Instead, it is taking place through the long evolved mechanism of Chicago style corruption, developed over the years by the Daley senior machine in the city that started Barack Obama on his way to political power.
So kudos to The Chicago Tribune for breaking this news to its readers, who can now ask Mayor Rahm Emanuel to do something to change the political culture, now that he is the local leader, having gained the post after leaving his city for White House service, and returning to it with having used national duty to obtain what previously had eluded him—the top political spot in his home town.
So here is the news. For a former labor boss named Dennis Gannon, it has now been revealed, "the keys to securing a public pension were one day on the city payroll and some help from the Daley administration.
The story goes on to note that "his city pension is more than modest. It's the highest of any retired union leader: $158,000. That's roughly five times greater than what the typical retired city worker receives." You have not misread this figure. It is so high that it is usually forbidden by Federal limits to what one can get in a pension, so the Daley machine had to file a special request with the IRS to allow him to get it. If you owe them some back taxes, simply do the same next time. Give them this story, and file a "special request." But don't count on it, unless you live in Chicago and know Rahm very well!
The Tribune goes further, spelling out the significance of the deal, way beyond what it meant for Mr. Gannon. They explain:
Gannon's inflated pension is a prime example of how government officials and labor leaders have manipulated city pension funds at the expense of union workers and taxpayers. Like other labor leaders, he was able to take a long leave from a city job to work for a union and then receive a city pension based on a high union salary.
But in a new twist, a Tribune/WGN-TV investigation has found that Gannon is eligible for the lucrative pension deal only because City Hall rehired the former Streets and Sanitation Department worker for a single day in 1994, then granted him an indefinite leave of absence.
We used to call this a "sweetheart deal," an arrangement going way beyond the old "double dipping" which takes place when a city worker retires and then is hired by another city agency to earn a full-time salary on top of his already high union pension. Why really work at a new job, Gannon figured out, when all he has to do is work one day and get the equivalent salary for the rest of his life? Yeah, evidently it is legal, and he took what he could get. But unlike the Warren Buffets of the world, who hire people and set up businesses, he is giving nothing to anyone but himself. As he probably says, "nothing is too good for the working class," especially when they can use the system and not have to work at all.
Oh, and he is described as "one of the most powerful" labor leaders in Chicago, a man who became president of the Chicago Federation of Labor, sitting therefore in AFL-CIO Executive Board meetings for years, where he could help plan national labor strategy and work out deals with Democratic White Houses to advance union power, or work to oust a Republican executive branch by buffing up the national union's lobbying force.
But wait, it gets better. Look at the following:
Until last year, that pension came on top of Gannon's union salary, which had grown to more than $240,000. He now draws the pension while working for a hedge fund, Grosvenor Capital Management, that does work with public pensions, including the Teachers Retirement System of Illinois. The firm also was one of Mayor Rahm Emanuel's largest campaign contributors.
Doesn't look like Rahm will do anything about this, does it? Well, at least you now know how the system works. Call it "socialism for the union leaders" if you will; at least you know what really motivates their activism—and it isn't concern for the well-being of the rank-and-file. Next time you want to know what hedge fund managers do, just think of Comrade Gannon, the workingman's rep in Chicago.
Mr. Gannon, it seems, is not too embarrassed about this revelation. He released this statement to the press:
"I am extremely proud of my many years of service to the city of Chicago and the working men and women of organized labor," Gannon wrote. "I have always followed the pension laws governed by the state of Illinois statute as well as the city of Chicago municipal pension plan."
Or, you might say, manipulate the laws so that the people you put in power through giving workers' funds to the campaign, then pass laws that can be used by those who arranged the deal to put it through. If you want to know why setting up a PAC through a union funded by contributions that are not voluntary is so corrupt, especially when done by public sector unions, you have no better evidence at hand than this.
The city will have trouble investigating this deal, since it was made over 16 years ago, and the details seem not to be available. Those who arranged it, obviously, did what they had to do to make the evidence about who arranged it and how it was done rather hard to find. Covering up the tracks is something at which Chicago pols have become more than adept.
How Gannon worked the system is spelled out in detail. Look at this:
With his pay increasing at a steady clip, Gannon sought to get back into the municipal pension fund in 1998. To do so, he would need to restore the money he had previously taken out and start making regular contributions again as if he were a city employee. He would also have to cover the contributions that normally come from the city.
And, readers learn, he was able to do all this by getting city help, by simply writing a letter to then Mayor Richard Daley! So a man who as a union leader worked regularly for Daley's election then writes a letter to score an unbelievable pension for doing nothing but pretending through shuffling of forms to have worked one day at a job he never engaged in at all!
As for Gannon, don't worry. Each year he gets 3 per cent more to adjust for inflation. You don't want this working class-hero to suffer, do you?
Read this and weep for what happened to organized labor in this great country of ours.
Ronald Radosh is an adjunct fellow at the Hudson Institute; Prof. Emeritus of History at the City University of New York, and the author of many books, including "The Rosenberg File;" "Divided They Fell: The Demise of the Democratic Party, 1964-1996," and most recently, "Commies: A Journey Through the Old Left, the New Left and the Leftover Left."
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