Pension Obligation Bonds are a device to postpone recognition of an unsound pension plan. Promises that are too high are simply promises that no one could afford in the first place. Look to San Diego . . where the new City Attorney knows that he is not there to protect unlawful conduct of elected officials.

Political Lunacy | Lash and Backlash

The final pieces of the puzzle seem to be falling in to place. According to Aguirre, it all started in 1996 when the Council struck a Faustian bargain with itself, siphoning off money from the pension plan to cover day to day expenses (in lieu of politically unpalatable budget cuts and/or tax increases) in exchange for what turned out to be an empty promise to make a big balloon payment should the funding ratio (what they’d actually contributed to the pension plan versus what they legally owed it) fall below 82.5%. That threshold was crossed in 2002 after the Dot.com bubble pop and recession collapsed fund revenues. Rather than making the balloon payment, however, the Mayor and Council struck a second Faustian bargain (that’s a lotta Faust) with City employees, labor unions and the Pension fund by voting for significant boosts in benefits for all if no one blew the whistle on these shenanigans. Payoff or legitimate bargaining? I’m not sure but the whole thing does start to smell like Mission Bay after a sewer spill, doesn’t it.

Getting money for nothin' seems as old a profession as the other oldest profession. If the money were instead a storehouse of food, a community storehouse, then the longest that a theft would go unnoticed is the next Winter. The hungry citizens would be asking where did all the food go? An accountant or an auditor of the accountant is supposed to keep an eye on such things.

Now, if the gifts are merely paper promises can we reexamine the circumstances in which they were written? If fraudulent intent existed from the start then the papers are worthless, and perhaps should lead to jail time too if it was the public that was harmed.

Pension gifts from the public trough are not much different than the Wall Street big wigs skimming off money from investors, with one big exception – investment in the stock market is supposedly wholly voluntary while the big bad government will try to reach into your pocket to collect taxes to cover their public employee gifts. The policeman that comes knocking at your door to enforce the government demand will likely be a beneficiary of the pension gifts. The judge to whom you would present your disagreement will also likely be a beneficiary of the pension gifts. The public officials to whom you would call for help will also likely to be a beneficiary of the pension gifts.

The creative financial device of Pension Obligation Bonds by a local government, for investment in stocks and such, is like a marriage of thieves. It merges the interests of Wall Street thieves with the interests of unaccountable local government thieves into a nice neat lobby.

The best immunity is to assure that the value of stocks controlled by the state treasurer will play absolutely no role, direct or indirect, in taxes upon the general public. The Oregon Constitution has always had a prohibition upon the public taking an interest in private companies. The PERS scheme when it was authorized to invest in stocks did so under the express prohibition upon having the government, that is you and I, cover someone else's loss in the stock market. That prohibition, under the Oregon Constitution, was recognized and described in Sprague v. Straub. It is not a matter upon which a lawyer could claim that there is uncertainty as to whether or not the public must cover for PERS losses. It is just the law, the answer is no. It really is that simple.

Oregon's 8 billion dollar conspiracy to defraud the public should make the San Diego fight look like child's play.

I will remind folks again that the current law firm that represents PERS takes credit for inventing Pension Obligation Bonds and has represented San Diego on pension matters in the past (and Orange County too). They also act as so-called professional Bond Counsel on behalf of government entities that want to issue public bonds.

I know the system is corrupt. It is corrupt on its' face. I don't need to be privy to the emails and phone calls to know that the front gates have been spread eagle. My challenge is to link the local corrupt folks with the bond rating agencies.

The AG and/or DA have a job to do; they, like Mr. Mike Aguirre, in San Diego, must choose between representing the public or representing the corrupt public officials because they cannot do both at the same time.

Legal Affairs - The Appearance of Propriety

The Appearance of Propriety
The judicial canons have got it wrong. The real ethical issues facing judges are hidden from view.
By Alex Kozinski

This would be a good read on ethics faced by judges . . but would be applicable in other contexts too.