The epigraph to this chapter is drawn from General Motors,
2005 Annual Report.
1 David Halberstam,
The Reckoning (New York: William Morrow, 1986), 327 (emphasis added).
2 1953. The occasion was Wilson’s nomination as secretary of defense.
3 Steven A. Sass,
The Promise of Private Pensions: The First Hundred Years (Cam-bridge, Ma: Harvard University Press, 1997), 23.
5 Nelson Lichtenstein,
The Most Dangerous Man in Detroit: Walter Reuther and the Fate of American Labor (New York: Basic Books, 1995), is my primary source for the sketch of Reuther.
6 Irving Howe and B. J. Widdick,
The UAW and Walter Reuther (New York: Random House, 1949), 29-30.
7 Lichtenstein,
Most Dangerous Man, 33.
9 Howe and Widdick,
Walter Reuther, 193.
10 Lichtenstein,
Most Dangerous Man, 54-55.
11 David Farber,
Sloan Rules: Alfred P. Sloan and the Triumph of General Motors (Chicago: University of Chicago Press, 2002), 183-85.
13 The Townsend episode is adapted from the author’s “A Question of Numbers,”
New York Times Magazine, Jan. 16, 2005.
15 Sass,
Promise of Private Pensions, 66.
17 Howe and Widdick,
Walter Reuther, 4.
18 Alfred P. Sloan Jr.,
My Years with General Motors (1st ed. 1963; New York: Doubleday, 1990), 398.
19 Lowenstein, “A Question of Numbers.”
20 Sass,
Promise of Private Pensions, 118.
22 Martin Halpern,
UAW Politics in the Cold War Era (Albany: State University of New York Press, 1988), 193.
23 Benjamin M. Selekman, Sylvia Kopald Selekman, and Stephen H. Fuller,
Problems in Labor Relations (New York: McGraw-Hill, 1958), 402-5.
24 A. H. Raskin, “UAW Seeks Pension of $100 a Month,”
New York Times, Jan. 21, 1949.
25 Walter P. Reuther,
Selected Papers, ed. Henry M. Christman (New York: Macmillan, 1961), 39.
26 Sass,
Promise of Private Pensions, 129-35.
27 “Labor: Turning Point,”
Fortune, April 1949.
28 Reuther was testifying to the Senate Finance Committee in its 1950 hearings on Social Security revision; quoted in Charles L. Dearing,
Industrial Pensions (Washington, DC: Brookings, 1954), 47.
29 “A Plan for Pensions,”
New Republic, Dec. 19, 1949.
30 The author’s source was the manuscript version of Jennifer Klein, “Welfare and Security in the Aftermath of World War II: How Europe Influenced America’s Divided Welfare State,” 20-21, 23 (subsequently published in Maurizio Vaudagna, ed.,
The Place of Europe in American History: Twentieth Century Perspectives, American Studies Series “Nova Americana,” Torino, Italy: Otto Publisher, 2006).
31 Dearing,
Industrial Pensions, 47.
32 Klein, “Welfare and Security,” 26-30.
33 “Chrysler’s Hundred Days,”
Fortune, June 1950.
34 Douglas Fraser, author interview.
35 “UAW-CIO Workers Security Program for Workers of the General Motors Corporation,” April 10, 1950 (copy provided by UAW).
36 “The Treaty of Detroit,”
Fortune, July 1950; Sloan,
My Years with General Motors, 395.
37 “Pensions Reconsidered,”
Nation, Nov. 19, 1949.
38 Peter F. Drucker, “The Mirage of Pensions,”
Harper’s Monthly, February 1950.
39 Selekman, Selekman, and Fuller,
Problems in Labor Relations, 426.
41 Vartanig G. Vartan, “2.25-a-Share Yearend Breaks All Records for Total Payment,”
New York Times, Nov. 2, 1965.
42 “Collective Bargaining Gains by Date of Settlement, UAW-General Motors, 1937-1999,” UAW Research Dept. (copy provided by UAW), 21-23. The calculation of $175 per month is as follows: Social Security was raised to a maximum of $98 a month for a single worker. GM pensions in 1955 were $2.25 per month per year of service, or $67.50 for a worker after thirty years, and $78.75 after thirty-five years.
43 Sloan,
My Years with General Motors, 403.
44 Sass,
The Promise of Private Pensions, 139.
45 Melvin A. Glasser, memo to Walter Reuther, Aug. 19, 1964, citing a report of the Social Security Administration, and “Corporate Retirement Policy and Practices Studies in Personnel Policy, No. 190,” Conference Board, both in box 129, folder 5, Walter Reuther Collection, Walter Reuther Library, Wayne State University.
46 Glasser memo, Feb. 23, 1973, box 53, folder 10, Leonard Woodcock Collection, Walter Reuther Library. Sass said 40 percent was a typical level of underfunding for collectively bargained plans,
The Promise of Private Pensions, 186.
47 James A. Wooten,
The Employee Retirement Income Security Act of 1974: A Political History (hereafter
ERISA) (Berkeley and Los Angeles: University of California Press, 2004), 68. The account here of Studebaker leans heavily on Wooten, 57-77.
48 Sass,
Promise of Private Pensions, 186. Sass was quoting from House hearings on the Studebaker collapse.
49 Wooten,
ERISA, 60, 74-76.
51 Walter P. Reuther, “Labor’s Pension Goals,” typed submission to the
Journal of Commerce, June 1, 1954, Reuther Collection.
52 Interoffice communication, Nat Weinberg to Walter Reuther, Jan. 8, 1963, box 165, folder 1, Reuther Collection.
53 Sloan,
My Years with General Motors, 406.
54 Damon Stetson, “Union-G.M. Drama Nearing a Climax,”
New York Times, Sept. 2, 1961.
55 UAW, “Collective Bargaining Gains,” 27-29.
56 “Statement from UAW to General Motors Corp.: SUB [Supplemental Unemployment Benefit],” 1, July 8, 1964, Reuther Collection.
58 General Motors,
2005 Annual Report, 5 (“just 31,000”). “Employee welfare or pension benefit plan for year ending Dec. 31, 1963,” General Motors annual report submitted to Dept. of Labor, box 131, folder 13, Reuther Collection.
59 UAW, “Collective Bargaining Gains,” 32, and Leonard Woodcock, “Summary of changes in 1964 insurance program,” box 131, folder 13, Reuther Collection.
60 “Statement of Walter P. Reuther on Federal Reinsurance of Private Pension Plans,” Aug. 15, 1966, 1-8, and draft of letter from Reuther to Hon. Wilbur Mills, Chairman, House Ways and Means Comm., Apr. 4, 1967, 1-4, both in Reuther Collection.
61 Senate testimony of Reuther on “Organization, costs and quality of medical care in the United States,” Apr. 24, 1968, box 164, folder 5, Reuther Collection.
62 “Salient Facts Relative to Health Care in the U.S.,” Reuther Collection, box 164, folder 1.
63 Elizabeth M. Fowler, “Some Analysts of G.M. Say ‘I Told You So,’ as Stock Drops,”
New York Times, Nov. 27, 1966.
64 The senator was Oregon’s Wayne Morse. Jerry M. Flint, “New Look at G.M.: Troika at the Top,”
New York Times, Nov. 5, 1967.
65 UAW, “Collective Bargaining Gains,” 36.
66 Information sheet prepared on twentieth anniversary of Ford pension, attached to memo from Irving Bluestone to Walter Reuther, Sept. 30, 1969, box 164, folder 1, Reuther Collection.
67 Robert C. Kryvicky, “The Funding of Negotiated Pension Plans,”
Transactions, Society of Actuaries, vol. XXXIII (1981): 413.
68 Lichtenstein,
Most Dangerous Man, 436-38.
69 Jerry M. Flint, “General Motors and Union Reach Terms for Pact,”
New York Times, Nov. 12, 1970.
70 UAW, “Collective Bargaining Gains,” 40.
2 • THE ANTI-REUTHER
1 UAW, “Collective Bargaining Gains,” 46-47.
2 Glasser, memo to Leonard Woodcock, Aug. 16, 1976, box 60, folder 12, Woodcock Collection.
3 Sass,
Promise of Private Pensions, 213, and Wooten,
ERISA, 113-14.
4 Sass,
Promise of Private Pensions, 209.
8 Woodcock, letter to President Nixon, July 2, 1970, Woodcock Collection.
9 Woodcock said ERISA was a victory for the 30 million Americans with private pensions, box 39, folder 5, Woodcock Collection. Sass (217) said 45 percent of the private labor force, then about 64 million, had pensions, which yields a figure of 28.8 million covered employees. The figures do not include those with public-sector pensions.
10 Statement of Rep. Elwood H. Hillis, May 8, 1972, box 39, folder 3, Woodcock Collection.
11 See, for example, Agis Salpukas, "U.A.W. to Review Free-Trade Stand,”
New York Times, Aug. 20, 1971, and Salpukas, "U.A.W. on Eve of Meeting, Narrowing Its Social Role,”
New York Times, Nov. 13, 1971; "U.A.W. Unit Defies Chiefs, Backs Wallace in Michigan,”
New York Times, May 9, 1972; Jerry M. Flint, “Auto Makers Face Blue-Collar Blues,”
New York Times, Jan. 7, 1973; and Theodore J. Jacobs, “The Company and the Union,”
New York Times, Mar. 18, 1973; and also John Lippert, “The Fall of Detroit,”
Bloomberg,Sept. 25, 2007.
12 Agis Salpukas, “G.M. to Lay Off 30,000; Ford Cuts Pinto Price $66,”
New York Times, Nov. 22, 1974.
13 Glasser, memo to Woodcock, Aug. 7, 1972, box 9, folder 5, Woodcock Collection.
14 For instance, early retirees received $700 a month in 1978 and $915 in the first year of the new contract. UAW, “Collective Bargaining Gains,” 47, 59.
15 Reginald Stuart, “New Hires Face a Loss in Auto Pact,”
New York Times, Sept. 18, 1979.
16 Douglas Fraser, author interview; also UAW, “Collective Bargaining Gains,” 51, 57.
17 Jose A. Gomez-Ibanez and David Harrison Jr., “Imports and the Future of the U.S. Automobile Industry,”
American Economic Review 72, no. 2, Papers and Proceedings of the Ninety-fourth Annual Meeting of the American Economic Association (May 1982): 319-23.
18 Halberstam,
The Reckoning, 609. The economist was William A. Niskanen Jr. During the Reagan administration he was acting chairman of the Council of Economic Advisers.
19 Sean McAlinden, author interview (the proportions apply to Americans of driving age).
20 Dan Luria, author interview.
21 Kryvicky, “The Funding of Negotiated Pension Plans,” 405-35.
22 GM spokesperson, author interview.
23 Luria, author interview.
24 Robert S. Miller [hereafter Steve Miller], author interview.
25 Gerald Greenwald, author interview.
27 Greenwald and Fraser, author interviews.
28 Steve Miller, author interview.
29 Greenwald, author interview.
30 John Holusha, “G.M. Chairman Says Japanese Might Welcome Car Restraint,”
New York Times, Mar. 18, 1981.
31 John Holusha, “Driving a Hard Bargain in Detroit,”
New York Times Magazine, Aug. 26, 1984, and “Document by G.M. Shows Labor Plan,”
New York Times, Feb. 19, 1984.
32 Owen Bieber, author interview.
33 Luria, author interview.
34 Paul Ingrassia and Joseph B. White,
Comeback: The Fall and Rise of the American Automobile Industry (New York: Simon & Schuster, 1994), 97-98, 111-14.
35 Luria, author interview.
36 James Barron, “General Motors Proposes Changes in Its Employee Health Program,”
New York Times, Aug. 16, 1984.
37 Bieber, author interview.
38 Ingrassia and White,
Comeback, 93-94.
41 Federal Reserve Board, “Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances,” A12.
42 Sass,
Promise of Private Pensions, 229. Union representation fell from 24 percent of the private sector workforce in 1979 to 11 percent fifteen years later.
43 UAW, “Collective Bargaining Gains,” 83-90; Michael H. Cimini, “Auto negotiations (General Motors Corp.-United Automobile Workers contract) (Developments in industrial relations),”
Monthly Labor Review 113 (November 1990).
44 Ingrassia and White,
Comeback, 430-32.
47 Margaret Price and Curtis Vosti, “Nicholas’ Time pension low: GM director cut Smith’s by 14.6%,”
Pensions & Investments, March 2, 1992.
48 Robert Stowe England, “A Question of Priorities,”
Financial World, April 25, 1995.
49 Robert Moroni, author interview.
50 Jonathan Chait,
The Big Con: The True Story of How Washington Got Hoodwinkedand Hijacked by Crackpot Economics (New York: Houghton Mifflin, 2007), 54-55.
51 Ron French, “GM’s bitter pill: Automaker spends billions on drugs for aging workers, retirees,”
Detroit News, Sept. 27, 2006.
52 GM executive (name withheld), author interview.
54 Richard Shoemaker, author interview.
55 Gary Lapidus, “Automobiles/United States: Employee benefits stake increasing claim on Big Three value,” Goldman Sachs global equity research report, May 31, 2001.
56 Steve Miller, author interview.
58 Remarks by Robert S. Miller to newspaper reporters, Washington, D.C., Oct. 28, 2005.
59 Lowenstein, “The End of Pensions,”
New York Times Magazine, Oct. 30, 2005.
60 See “The End of Pensions.”
61 PBGC 2005 Fact Book, 3.
62 Gerald Meyers, author interview.
63 David Welch, with Nanette Byrnes, “GM Is Losing Traction,”
Business Week, Feb. 7, 2005.
64 Steve Girsky, author interview.
65 The pension was raised in steps over the contract life and reached $3,020 in 2006.
66 GM corporate communications.
67 In re Delphi Corp., et al., Chapter 11 Case no. 05-44481, Declaration of Keith Williams, court docket #3045, 4 (available at
DelphiDocket.com).
68 In re Delphi, Declaration and expert report of Michael L. Wachter, docket #3046, 20.
69 Monica Langley and Jeffrey McCracken, “Collision Course: Showdown on Auto-Labor Costs Looms as Delphi Goes to Court,”
Wall Street Journal, Mar. 31, 2006.
70 In re Delphi, Affidavit of Robert S. Miller, Jr., docket #0007, 26, 49.
71 In re Delphi, Declaration and expert report of Wachter, 20.
72 The workers would get a so-called cash balance plan, a newer form of pension also referred to as a hybrid because it combines aspects of defined benefit plans with those of defined contribution plans.
73 “Why GM’s Plan Won’t Work,”
Business Week, May 9, 2005.
74 General Motors,
2005 Annual Report, 126. The precise figure for 2005 was $6.7 billion in benefits to U.S. pensioners, and $900 million to pensioners in overseas units.
75 General Motors,
2005 Annual Report, 5.
76 Ron French, “Stranglehold: How General Motors and the nation are losing an epic battle to tame the health care beast,”
Detroit News, Sept. 28, 2006.
77 General Motors,
2005 Annual Report, 5.
78 Carol Loomis, “The Tragedy of General Motors,”
Fortune, Feb. 6, 2006.
79 John Casesa, author interview.
80 David Cole, author interview.
81 Harvey Miller (no relation to Steve Miller), author interview.
83 In re Delphi, Declaration of Steven Gebbia, docket #3042, esp. 16-18; Tom Walsh and Jason Robertson, “Unions Irate Over Delphi’s New Offer,”
Detroit Free Press, Oct. 22, 2005.
84 Steve Miller, author interview.
85 Langley and McCracken, “Delphi Goes to Court.”
86 See Miller’s speech to Kellogg School of Management, Nov. 7, 2005. Miller said he took the Delphi job without asking about his compensation, “and now that my salary has been cut to just one dollar a year, I guess I should have paid more attention.”
87 Steve Miller, Harvey Miller, author interviews.
88 Lowenstein, “The End of Pensions.”
89 In re Delphi, Transcript of Hearing Held on May 9, 2006, docket #3984, also Transcript of Hearing Held on May 24, 2006, docket #4136, esp. p. 145; Affidavit of Miller, 12.
90 In re Delphi, May 9 hearing transcript, 95-97.
91 In re Delphi, Declaration of Roger Struckman, docket #3779 (italics added).
92 Jeffrey McCracken, “Shifting Down: A Middle Class Made by Detroit Is Now Threatened by Its Slump,”
Wall Street Journal, Nov. 14, 2005.
93 Provided by Miller; employee’s name withheld by author.
94 General Motors,
2005 Annual Report, 130.
95 At year end 2005, GM had the following retiree obligations: U.S. pension benefits, $89.1 billion; non-U.S. pension benefits, $20.6 billion; other (primarily health) U.S. retiree benefits, $81.2 billion; non-U.S. benefits, $3.8 billion. General Motors,
2005 Annual Report, 126.
96 Jim Millstein, author interview.
98 Millstein, Girsky, author interviews.
99 General Motors,
2005 Annual Report, 50.
100 GM Form 10-Q, filed with U.S. SEC May 10, 2006 (period: Mar. 31, 2006); see exhibit 10.1, Memorandum of Understanding, Oct. 29, 2005, and especially Attachment E: Health Care Reform Letter.
101 Steve Miller, author interview.
102 Steve Miller, author interview, and Langley and McCracken, “Collision Course.”
103 Casesa, author interview.
104 GM corporate communications.
105 Christopher Cooper and John McKinnon, “Bush Plays Down Bailout Prospects for GM and Ford,”
Wall Street Journal, Jan. 26, 2006.
106 Jerry York, author interview.
107 General Motors,
2005 Annual Report, 3, 5.
3 • AN ENTITLED CLASS
1 “New York City Retirement Systems,” tables prepared by New York City Office of the Actuary.
2 Martin McLaughlin, author interview.
3 The average income for workers ages sixteen to sixty-four in the New York metro area in 2005 was $46,000; the median was $30,000 (George Borjas). Transit figures: MTA New York City Transit “Labor Negotiations Briefing Book,” December 2005, Appendix N. Among the individual job categories, in 2004, bus operators earned an average of $62,551; bus maintainers, $68,152; train operators, $62,438. Other categories, such as conductors and cleaners, earned less.
4 Peter Kalikow, author interview.
5 Report of the Police Pension Fund of the City of New York 1913, 21-26. The history of the police fund is also summarized in Robert Tilove,
Public Employee Pension Funds (New York: Columbia University Press, 1976), 262.
6 Report of Police Pension Fund, 16, 26.
7 Ibid., 17. The police contribution in 2005 was just over $1 billion.
9 See the account of the strike in Robert Sobel,
Coolidge: An American Enigma (Washington, DC: Regnery Publishing, 1998), as well as in Donald R. McCoy,
Calvin Coolidge: The Quiet President (New York: Macmillan, 1967).
10 Joshua B. Freeman,
In Transit: The Transport Workers Union in New York City, 1933-1966 (New York: Oxford University Press, 1989), 5. Mark H. Maier,
City Unions: Managing Discontent in New York City (New Brunswick, NJ: Rutgers University Press, 1987), 12-13.
11 James J. McGinley, S.J.,
Labor Relations in the New York Rapid Transit Systems 1904-1944 (New York: King’s Crown Press, 1949), 202.
12 Freeman,
In Transit, 13.
13 McGinley,
Labor Relations in Rapid Transit, 213.
American Brake Shoe and Foundry Co. v. Interborough Rapid Rapid Transit Co., On petition for withdrawal and rescission of pension plan, June 25, 1936, Mack, Circuit Judge, In Equity, 70-364, U.S. District Court, southern district [the judge’s decision contains numerous details of the 1916 IRT pension plan], 1-15.
14 L. H. Whittemore,
The Story of Mike Quill: The Man Who Ran the Subways (New York: Holt, Rinehart and Winston, 1968), 25; McGinley,
Labor Relationsin Rapid Transit, 200; Freeman,
In Transit, 15.
15 McGinley,
Labor Relations in Rapid Transit, 171, 213-14, 485;
American Brake Shoe v. IRT, Mack’s decision, 2-3.
16 Whittemore,
Mike Quill, 16, 19; Freeman,
In Transit, 45-46, 50-51, 55. I am indebted to these two works for the early history of the TWU, as well as for the profile of Quill.
17 McGinley,
Labor Relations in Rapid Transit, 214-15, 484.
18 Freeman,
In Transit, 77.
19 American Brake Shoe v. IRT, Mack’s decision, 8; McGinley,
Labor Relations in Rapid Transit, 215.
20 Whittemore,
Mike Quill, 3-9, 27, 37-38; Freeman,
In Transit, 55-56.
21 Whittemore,
Mike Quill, 86.
22 Quoted in Whittemore,
Mike Quill, 21.
23 Freeman,
In Transit, 70-71, 132-37, 354.
24 Ibid., 151-54, 196, 276.
25 Whittemore,
Mike Quill, 47-49; Freeman,
In Transit, 90, 95-97.
26 Whittemore,
Mike Quill, 51.
27 Interborough Pension Board, “Amount of Monthly Payroll Payments and Contributions,” July 13, 1953, Transport Workers Union of America Collection, Robert F. Wagner Labor Archives, Tamiment Library, New York University (hereafter TWU Collection), box 1, folder 13.
28 Whittemore,
Mike Quill, 56; Freeman,
In Transit, 113-14, 121-22; McGinley,
Labor Relations in Rapid Transit, 216.
29 Maier,
City Unions, 11; Freeman,
In Transit, 217.
30 Whittemore,
Mike Quill, 104-5; Maier,
City Unions, 19.
31 Freeman,
In Transit, 197-98.
33 Jonathan Schwartz, author interview.
34 McGinley,
Labor Relations in Rapid Transit, 219.
35 Minutes of TWU board, June 27, 1941, box 1, folder 11, TWU Collection.
36 Dearing,
Industrial Pensions, 27-28.
37 Whittemore,
Mike Quill, 136, 143, 161; Freeman,
In Transit, 291, 301-2, 303.
38 Maier,
City Unions, 34.
39 Whittemore,
Mike Quill, 126.
40 Maier,
City Unions, 32.
41 Raymond D. Horton,
Municipal Labor Relations in New York City: Lessons of the Lindsay-Wagner Years (New York: Praeger, 1973), 21-23.
42 Maier,
City Unions, 34.
43 Tilove,
Public Employee Pension Funds, 281.
44 Whittemore,
Mike Quill, 229.
45 Charles R. Morris,
The Cost of Good Intentions (New York: W.W. Norton, 1980), 89.
46 Maier,
City Unions, 48.
47 Freeman,
In Transit, 326.
48 Richard B. Freeman, “Unionism Comes to the Public Sector,”
Journal of EconomicLiterature 24, no. 1 (Mar. 1986): 41, 47.
49 Horton,
Municipal Labor Relations, 49.
50 Testimony of Hillis, May 8, 1972, box 39, folder 1, Woodcock Collection, Reuther Library.
51 Robert A. Caro,
The Power Broker (New York: Alfred A. Knopf, 1974), 735.
52 There is a good history of pension changes in New York City during the ’60s in Morris,
Cost of Good Intentions, see esp. 99-101.
53 “Summary—Pension Changes in New York City,” typed report, TWU Collection.
54 Tilove,
Public Employee Pension Funds, 283.
55 Richard Freeman, “Unionism Comes to the Public Sector,” 43; Horton,
MunicipalLabor Relations, 51.
56 Joshua Freeman,
In Transit (1st ed. 1989; Philadelphia: Temple University Press, 2001), 338.
57 Freeman,
In Transit (1st. ed.), 333.
58 Whittemore,
Mike Quill, 248.
59 Maier,
City Unions, 40.
60 Letter of Oct. 31, 1963, box 25, folder 10, TWU Collection.
61 Horton,
Municipal Labor Relations, 68.
62 Thomas R. Brooks, “Lindsay, Quill & the Transit Strike,”
Commentary, March 1966.
63 Horton,
Municipal Labor Relations, 72.
64 Ken Auletta,
The Streets Were Paved with Gold (1st ed. 1975; New York: Vintage, 1980), 59.
65 Theodore Kheel, author interview, and Brooks, “Lindsay, Quill.”
66 Kheel, author interview.
68 Whittemore,
Mike Quill, 284.
69 Murray Schumach, “Union Chief Irate,”
New York Times, Jan. 5, 1966.
70 Vincent J. Cannato,
The Ungovernable City: John Lindsay and His Struggle to Save New York (New York: Perseus, 2001), 87.
71 Kheel, author interview.
72 Horton,
Municipal Labor Relations, 81.
73 Freeman,
In Transit (1st ed.), 335.
74 Morris,
Cost of Good Intentions, 103.
75 Auletta,
Streets Were Paved with Gold, 47, 150, 155.
77 Schwartz, author interview.
79 "T.W.U.’s 20-Year, Half-Pay Transit Authority Pension Plan,” TWU Collection.
80 Transcript of WNBC-TV’s
Searchlight, Jan. 11, 1970, panel interview with John J. Gilhooley, TWU Collection.
81 Schwartz, author interview.
84 Ibid. The only dollop of sanity in the variable supplement was that the stock market had to recoup any prior losses before pensioners were eligible for a bonus. In other words, if the market index fell from 1,000 to 900, supplements would not kick in until it again rose above 1,000.
85 Auletta,
Streets Were Paved with Gold, see esp. 32, 289.
86 Horton,
Municipal Labor Relations, 76.
87 Freeman,
In Transit (2001 ed.), 338.
88 Tilove,
Public Employee Pension Funds, 272. The figures assume the workers were married. Social Security payments were less for single workers, but even in those cases total retirement income was greater than 100 percent of final pay.
90 David K. Shipler, “City Pension Costs Snowballing,”
New York Times. Mar. 15, 1971.
91 Schwartz, author interview. A total of sixty-one motormen retired that year on a “final salary” of at least $25,000. Shipler, “City Pension Costs Snowballing.”
92 Tilove,
Public Employee Pension Funds, 285.
93 Freeman,
In Transit (2001 ed.), 339.
94 Ibid., 339; Auletta,
Streets Were Paved with Gold, 146. The drop in ridership occurred roughly from 1969 to 1977.
95 Shipler, “City Pension Costs Snowballing”; Alfonzo A. Narvaez, “City Unsure of Savings in Pension Bill,”
New York Times, July 29, 1973.
96 Maier,
City Unions, 87.
97 Barry Feinstein, author interview.
99 Quoted in Tilove,
Public Employee Pension Funds, 280.
100 Feinstein, author interview; Tilove,
Public Employee Pension Funds, 280; Maier,
City Unions, 88.
101 Feinstein, author interview; Schwartz, author interview.
102 M. A. Farber, “Uniform State Pension Plan Proposed,”
New York Times, Jan. 31, 1973.
104 Farber, “Uniform State Pension Plan Proposed.”
105 “Doing and Undoing,”
New York Times (unsigned editorial), Apr. 24, 1973.
106 TWU notices, Feb. 9, 1973, TWU Collection; M. A. Farber, “Coalition of 15 Public-Employe Unions Decries Rockefeller’s Bill on Pensions,”
New York Times, May 16, 1973; William E. Farrell, “State Pact with Employees Called Blow to Proposal for Uniform Pension Plan,”
New York Times, Apr. 14, 1973.
107 Farrell, “State Pact with Employees Called Blow”; Francis X. Clines, “Panel Chides Governor on Pension Reform,”
New York Times, May 9, 1973; Farrell, “Albany Sets Back Pension Reforms for This Session,”
New York Times, May 23, 1973.
108 Schwartz, author interview.
109 In addition to the change cited in the text, the service requirement was raised from twenty years to twenty-five years. Schwartz, author interview; Alfonso A. Narvaez, “Kinzel Assails Panel’s Pension Plan As an Endorsement of the Status Quo; Change in Age,”
New York Times, July 20, 1973.
110 Louis M. Kohlmeier, “Pension Fund Risks for Public Employees,”
New York Times, Mar. 28, 1976.
111 Edward Ranzal, “City Needs $100 Million for Tomorrow’s Debts,”
New York Times, Sept. 4, 1975, and John Darnton, “Trustees of City Pensions Wary of More City Bonds,”
New York Times, Oct. 2, 1975.
112 Richard Ravitch, author interview; Schwartz, author interview; Linda Greenhouse, “A Night of Anxiety on Brink of Default,” and Steven R. Weisman, “$150-Million Pact,” both in
New York Times, Oct. 18. 1975; “Saved Again from the Jaws of Default,”
Time, Oct. 27, 1975.
113 Kohlmeier, “Pension Fund Risks for Public Employees.” The funds agreed to invest an additional $2.5 billion in bonds in the future, representing a total commitment of close to half their assets.
114 Auletta,
Streets Were Paved with Gold, 206.
4 • ON STRIKE!
1 Ed Koch, author interview. See also Josh Barbanel, “Bill to Increase State Pensions Nearing a Vote,”
New York Times, June 13, 1983, and Michael Oreskes, “Mayor Attacks Bill to Improve State Pensions,”
New York Times, June 15, 1983.
2 Koch, author interview; Feinstein, author interview.
3 Ravitch, author interview.
4 Freeman,
In Transit (2001 ed.), 339, 341, 343; Ravitch, author interview.
5 Ravitch, author interview; James Lardner, “A Reporter at Large: Painting the Elephant,”
New Yorker, June 25, 1984; and Freeman,
In Transit (2001 ed.), 341.
6 Ravitch, author interview. See also Lardner, “A Reporter at Large”; Richard J. Meislin, “Koch Is Angered By Carey’s Move to Support Pact,”
New York Times, Apr. 2, 1980; Damon Stetson, “Talks are Curtailed,”
New York Times, Apr. 4, 1980.
7 Freeman,
In Transit (2001 ed.), 342.
8 Lardner, “A Reporter at Large.”
9 Freeman,
In Transit (2001 ed.), 340.
10 Ravitch, author interview. For a fuller and excellent account of Ravitch’s effort to rebuild the subways, see Lardner, “A Reporter at Large.”
11 Neysa Pranger, author interview.
12 Michael Oreskes, “A Transit Strike? Union Chief Says ‘No Way,’ ” and “Tentative Accord Reached with City Transit Workers,”
New York Times, Mar. 18, 1985, and June 28, 1985.
13 E. J. McMahon and Fred Siegel, “Gotham’s Fiscal Crisis: Lessons Unlearned,”
Public Interest no. 158 (Winter 2005), 96-110.
14 Freeman,
In Transit (2001 ed.), 343.
15 Alan Finder, “Transit Union Head to Seek Strike Approval,”
New York Times, Apr. 15, 1992.
16 Schwartz, author interview.
18 Steven Greenhouse, “Transit Workers’ Chief Quits After Protest,”
New York Times, Jan. 20, 1996; Freeman,
In Transit (2001 ed.), 343-44.
19 Gene Russianoff, author interview.
20 Lowenstein, “The End of Pensions.”
21 “Why New York’s Going Broke,”
New York Daily News, Sept. 7, 2004.
22 Eric Lipton, “Mayor Eases Reins on City’s Spending as Economy Booms,”
New York Times, July 13, 2000.
23 Robert C. North Jr., Adam Barsky, and Ed Watt, author interviews.
24 Pension contribution figures from the tables in “New York City Retirement Systems,” prepared by the New York City Actuary (hereafter NYC Actuary) City of New York, Independent Budget Office. The $16 million represents the Transit Authority’s contribution on behalf of all transit workers
except those employed by the Manhattan and Bronx Surface Transit Operating Authority (MaBSTOA), a subsidiary of the TA that operates formerly private bus lines. MaBSTOA workers belong to a separate pension plan, also funded by the TA. Assuming their pension expense amounted to an equivalent proportion of payroll, the total transit pension payment was roughly $20 million.
25 “Why New York’s Going Broke.”
26 Michael Cooper, “City Foots Bill as State Upgrades Pensions,”
New York Times, Aug. 22, 2006.
28 Ibid.; New York State Board of Elections.
29 Barsky, author interview.
30 E. J. McMahon, author interview.
32 Gary Dellaverson, author interview.
33 “Why New York’s Going Broke II,”
New York Daily News, Sept. 8, 2004; Bill Farrell, “Pensions Get Overdue Lift,”
New York Daily News, June 21, 2000.
34 Eric Lipton, “Giuliani Plan Would Curtail City Tax Cuts,”
New York Times, July 20, 2000.
35 Freeman,
In Transit (2001 ed.), 346.
36 Philip Kasinitz, author interview.
37 Tom Robbins, “Underground Rumblings: A Modern Militant Vies to Revive the Transit Union,”
Village Voice, Nov. 22-28, 2000; Pete Donohue, “What Make[s] Toussaint Tick,”
New York Daily News, Dec. 12, 2005.
38 Arthur Schwartz, author interview;
Roger Toussaint, Julio Rivera, Leroy Jardim, John Samuelsen and Jose Iglesias v. New York City Transit Authority, Local 100, Transit Workers Union, et al., 99 Civ. 2266, U.S. District Court, Eastern District of New York, Declaration of Roger Toussaint; see also Robbins, “Underground Rumblings.”
39 Nichole M. Christian, “Chief of Transport Workers Loses to Upstart in Landslide,”
New York Times, Dec. 14, 2000.
40 The sketch of Kalikow draws on two main sources: the author’s interview with Kalikow, and Craig Horowitz, “Underground Man,”
New York Magazine, Apr. 5, 2004.
41 See, for instance, Richard D. Hylton, “Sometimes Those Bare Necessities Include Yacht Docking,”
New York Times, Aug. 25, 1991.
42 Horowitz, “Underground Man.”
44 MTA. The figure is as of 2004.
45 Schaller Consulting, “Mode Shift in the 1990s: How Subway and Bus Ridership Outpaced the Auto in Market Share Gains in New York City,” Aug. 8, 2001, 20.
46 MTA 2006 Annual Report, “Capital Program Progress Table”; Russianoff, author interview; also Randy Kennedy, “M.T.A. Head Expected to Announce Resignation,”
New York Times, Jan. 24, 2001.
47 Russianoff, author interview; see also Robert Fitch, “New York’s Real Transit Crisis,”
Nation, Dec. 30, 2005 (Web only).
48 Kevin Flynn and Charles V. Bagli, “2 M.T.A. Officials Fired in December in Bribery Inquiry,”
New York Times, Apr. 17, 2003.
49 Eric Lipton, “Big Donors’ Dealings with State Give Pataki Big Advantage,”
New York Times, Oct. 11, 2002.
50 See, for instance, Sewell Chan, “Transit Chief Shows Signs of Political Independence,”
New York Times, Feb. 26, 2005. Chan said Kalikow “once . . . was better known as a Republican donor and heir to a real estate fortune” but had developed into “a forceful advocate” for mass transit.
51 Kalikow, author interview.
53 “Why New York’s Going Broke II.”
54 From 2001 to 2007 the payroll rose at a rate of 2.5 percent a year, just covering the rise in the cost of living. “Financial Plan Summary, Fiscal Years 2006- 2010,” Mayor Bloomberg, Jan. 31, 2006, 10.
55 McMahon, author interview. The tax hike became effective in 2003.
56 North, author interview.
57 Steven Greenhouse, “The Transit Settlement: The Deal,” and “The Transit Settlement: The Talks,”
New York Times, Dec. 17 and 18, 2002.
58 “Review of the Proposed Financial Plan and Capital Program for the Metropolitan Transportation Authority,” Report 7-2005, Oct. 2004, New York State Comptroller, Alan G. Hevesi, 1.
59 Richard Perez-Pena, “M.T.A.’s Fiscal Predicament Is a Crisis That Many Saw Coming,”
New York Times, Oct. 25, 2004.
60 “Financial Outlook for the Metropolitan Transportation Authority,” Hevesi, NYS Comptroller, Report I-2006, May 2005, and also Hevesi’s Report 7-2005, 12, 30. The increase in the MTA’s reliance on bond sales for capital programs is striking; during the late 1980s, 2.5 percent of the MTA capital budget was financed with debt, in the ’90s, 40 percent, and from 2000 to 2004, 60 percent.
61 MTA 2006 Annual Report. MTA federal grants equaled, on an average annual basis, $630 million from 1992 to 1999 and $1.1 billion from 2000 to 2005. Inflation somewhat eroded the value of later grants.
62 Joyce Purnick, “Metro Matters; Transit Chief Has the Style of His Boss,”
New York Times, Apr. 24, 2003.
63 Sewell Chan, “Transit Chief Shows Signs of Political Independence,”
New York Times, Feb. 26, 2005.
64 MTA, NYC Transit Briefing Book; Dellaverson, author interview.
65 George Borjas; Nicole Gelinas, "Off the Rails” (op-ed),
New York Times, Dec. 13, 2005.
66 NYC Actuary; MTA, NYC Transit Briefing Book; Steven Greenhouse and Sewell Chan, “In Talks over Transit Pact, Different Chips, Same Poker,”
New York Times, Dec. 11, 2005; and Dellaverson, author interview. The pension figures for transit include the entire workforce, including MaBSTOA.
67 Feinstein and Kalikow, author interviews.
69 NYC Actuary. The actuary forecast a total pension bill for 2009 of $6.65 billion.
70 NYCERS. General employees contributed $632 million to NYCERS in 2000 and only $310 million in 2005.
71 Independent Budget Office; NYC “January 2006 Financial Plan,” 61.
72 McMahon, author interview.
73 “The Case for Redesigning Retirement Benefits for New York’s Public Employees,” Citizens Budget Commission, Apr. 29, 2005.
74 NYCERS, Annual Financial Report, June 30, 2005, author’s analysis of “Service Retirement Experience/Table of Average Retirement Allowance by Age and Years of Service,” 194. Autoworkers’ thirty-and-out pensions were $2,875 a month, or $34,500 annually, as of Oct. 2004.
75 Lowenstein, “The End of Pensions.”
76 Bloomberg’s budget message in January 2006 would state, “Pension reform is necessary in order for New York City to gain control over escalating costs.” January 2006 Financial Plan, Fiscal Years 2006-2010, Michael Bloomberg, Mayor, Jan. 31, 2006, 37.
77 Pocket Veto Message—No. 188 (veto of S3325A, introduced in Senate 2003); Veto Message—No. 256 (veto of S7531, introduced in Senate 2004).
78 Dellaverson, author interview.
79 Greenhouse and Chan, “In Talks over Transit Pact, Different Chips, Same Poker.”
80 Dellaverson, author interview.
81 Greenhouse and Chan, “Different Chips, Same Poker.”
82 Donohue, “What Make[s] Toussaint Tick,”
New York Daily News, Dec. 12, 2005.
83 Steven Greenhouse, “City Seeks Stiff Fines for Workers and Transit Union If They Strike,”
New York Times, Dec. 14, 2005. The Quill quote is from Robbins, “Underground Rumblings,”
Village Voice, Nov. 22-28, 2000.
84 “Subway Grinches” (editorial),
Wall Street Journal, Dec. 15, 2005.
86 Pete Donohue, “Wheels Turn as Deadline Passes,”
New York Daily News, Dec. 19, 2005.
87 The account of the bargaining draws on interviews with Kalikow, Dellaverson, Basil Paterson, and others, as well as on the extensive coverage that appeared in the New York press.
88 “Last Stand at the MTA-TWU Corral . . . Maybe,”
Gothamist.com, Dec. 16, 2005; Steven Greenhouse and Sewell Chan, “Transit Talks Pass Deadline For a Strike,”
New York Times, Dec. 16, 2005.
89 Kalikow, author interview.
91 Newspaper coverage of the talks was extensive. One of the best pieces was Pete Donohue and Paul H. B. Shin, “Hopes Rose & Sank as the Clock Ticked,”
New York Daily News, Dec. 17, 2005.
92 Pete Donohue and David Saltonstall, “MTA & Union Not Talking,”
New York Daily News, Dec. 17, 2005.
93 Sewell Chan and Steven Greenhouse, "N.Y. Transit Union Rejects Offer and Calls a Limited Strike,”
New York Times, Dec. 16, 2005; Greenhouse, “Workers and the M.T.A. Stick to Lines in the Sand,
New York Times, Dec. 17, 2005.
94 Donohue, “Wheels Turn.”
96 Paterson, author interview.
97 Harry Harrington, “ ‘No Contract, No Work’—The 2005 New York City transit strike,” Industrial Workers of the World,
www.iww.org/en/ node/2010, Feb. 3, 2006.
98 “The Daily News Says Throw Roger from the Train!” (editorial),
New York Daily News, Dec. 21, 2005.
5 • FINEST CITY
1 The peak official figure, as of June 30, 2005, was $1.4 billion (SDCERS). However, KPMG, the city’s outside auditor, placed the deficit at approximately $1.7 billion (see the city attorney’s sixth interim report on the pension case, 13). Rick Roeder, the retirement system actuary, publicly endorsed this figure as accurate given certain (more conservative) actuarial assumptions. (See Philip LaVelle, “New board for pension has tough task ahead,”
San Diego Union-Tribune, Apr. 14, 2005.)
2 Jack Jacobs, author interview.
3 Murtaza H. Baxamusa, “Bottom Line: Solutions for San Diego’s Budget Crisis,” Center on Policy Initiatives, April 2005, 1.
4 Measured in 2000 dollars; Jennifer Sloan McCombs and Stephen J. Carroll, “Ultimate Test: Who Is Accountable for Education If Everybody Fails?”
Rand Review, Spring 2005.
5 Edward Fike, author interview.
6 Jack McGrory, author interview.
7 Arthur Levitt Jr., Lynn E. Turner, and Troy A. Dahlberg, “Report of the Audit Committee of the City of San Diego,” Aug. 8, 2006, 34-35 (hereafter Levitt).
8 Michael Aguirre, “Interim Report Number 3 Regarding Possible Abuse, Illegal Acts or Fraud by City of San Diego Officials,” 18. Aguirre, the city attorney, released seven so-called interim reports during 2005 (hereafter Aguirre I, II, III, etc). “State must return pension money,”
San Diego Union-Tribune, May 29, 1997.
9 Baxamusa, “Bottom Line,” 2.
10 Matt Potter, “Married Rich,”
SanDiegoReader.com, May 31, 2001; John Pat-rick Ford, “Scandal du Jour,”
Daily Transcript (San Diego), Oct. 20, 2005.
11 John Kaheny, author interview; Philip J. LaVelle, “Rates rise, but was work done? Sanders wants look at water, sewer books,”
San Diego Union-Tribune, Jan. 22, 2006.
12 Gerry Braun, “The smooth operator,”
San Diego Union-Tribune, Dec. 18, 2005.
13 The figures were variously collected from 1997 to 2003. Baxamusa, “Bottom Line,” 6, 9, 12-15.
14 Baxamusa, “Bottom Line,” 23-30.
15 McGrory, author interview.
16 Philip J. LaVelle, “Mayor’s retirement fund plan is opposed; City would suspend contributions,”
San Diego Union-Tribune, Apr. 16, 1994.
17 Kaheny, author interview.
18 McGrory, Gary Kaku, author interviews; Levitt, 35-36; Philip J. LaVelle, “City gets retirement pool break, $9.3 million ‘loan’ will avert cuts in police, fire departments,”
San Diego Union-Tribune, Mar. 25, 1995.
19 Braun, “The smooth operator.”
20 Susan Golding, “A City of Neighborhoods,” State of the City Address, Jan. 10, 1996.
21 John Thomson, author interview.
22 McGrory, author interview.
23 Aguirre VI, 24, 26-30.
24 Aguirre III, 9; Conny Jamison, author interview.
26 Aguirre VI, 38; Philip J. LaVelle, “City has a deal, but will pension trustees buy it?”
San Diego Union-Tribune, June 21, 1996.
27 There was much debate about the size of the balloon payment that would have been required. Many said it would have been $75 million.
28 Jamison, author interview.
29 Scott Peters, author interview.
31 Board of Administration v. Wilson, 52 Cal. App. 4th 1109, 1117-1122, 1131, 1135 (1997), cited in Aguirre III, 17-18.
32 Aguirre III, 8, 18-19.
33 Ernie Anderson, author interview.
34 Ronald W. Powell, "Stadium Site Search,”
San Diego Union-Tribune, Mar. 12, 2007.
35 See the author’s
Origins of the Crash: The Great Bubble and Its Undoing (New York: Penguin, 2004), 125.
36 “Murphy for mayor,”
San Diego Union-Tribune, Oct. 15, 2000.
37 Fike, author interview.
39 Philip J. LaVelle, “Stallings resigns,”
San Diego Union-Tribune, Jan. 30, 2001.
6 • PENSION PLOT
2 SDCERS; Levitt, 67-68; Andrew Donohue, “Six SD Officials Charged in Pension Scandal,”
Voice of San Diego (online, nonprofit newspaper; voiceofsandiego.org), May 17, 2005; Indictment,
United States of America v. Ronald Saathoff, Cathy Lexin, Teresa Webster, Lawrence Grissom, Loraine Chapin, U.S. District Court, Southern District of California, January 2004 Grand Jury, Criminal Case NO. 06CR0043BEN, filed Jan. 6, 2006, 14. See also E. Scott Reckard, Catherine Saillant, and Kathy M. Kristof, “San Diego Playing a Blame Game,”
Los Angeles Times, May 1, 2005.
3 Indictment,
U.S. v. Saathoff et al., 14-15.
4 Aguirre II, 26, 3-4, 10.
6 Kroll interview of Dennis Gibson, 5-6, attached to Levitt.
7 Aguirre II, 26-27. See also Matthew T. Hall, “Ballpark built despite city’s fiscal ills. Report delayed to protect bond sale, consultants find,”
San Diego Union-Tribune, Aug. 14, 2006.
9 Levitt, B-10; Aguirre II, 11-12; also Aguirre VII, 3.
10 Carl DeMaio, author interview.
12 Ray Huard, “City finances called sound, but new revenue is needed. Panel avoids saying how to raise the money,”
San Diego Union-Tribune, Feb. 28, 2002.
13 Aguirre II, 11, 26-29. The report said the latest (i.e., the June 30, 2001, funding ratio) was “not available.” However, it had been both available and known for fifteen days.
14 Transcript of Rules Committee meeting, Feb. 27, 2002.
15 Lamont Ewell, author interview.
19 Levitt, B-11; Reginald A. Vitek, letter to Sheila Leone, Mar. 5, 2003.
20 Transcript of Rules Committee meeting, March 20, 2002.
23 Richard H. Vortmann, letter to “Fellow Blue Ribbon Committee Members,” Apr. 29, 2002.
24 Kroll interview of Dennis Gibson, 7, attached to Levitt, and Richard Vortmann, author interview. See also Matt T. Hall, "S.D. panelist’s memo warned of fiscal woes,”
San Diego Union-Tribune, Feb. 3, 2005.
25 “Pension Violations” (editorial),
San Diego Union-Tribune, Jan. 13, 2005.
27 Aguirre II, 21 (emphasis added).
29 Letter of Diann Shipione, May 23, 2002; Douglas McCalla, author interview.
30 Over the five years to June 30, 2002, SDCERS’s investment performance was 7 percent a year. The California Public Employees’ Retirement System (CalPERS), the country’s biggest retirement system, said in its 2002 annual report that the average system earned 5.1 percent a year over that span, and that CalPERS earned 5.3 percent. Over the ten years ending June 2002, SDCERS’s return was 10.1 percent a year, compared to 9.3 percent for CalPERS.
31 Pat Shea, author interview; Matthew T. Hall, “Lawyer’s cure is bitter pill,”
San Diego Union-Tribune, June 30, 2005.
32 Vitek, letter to Leone.
34 Ann M. Smith, “Heroes or Villains? It Depends on Politics, Not Facts” (guest column),
Voice of San Diego, June 21, 2005.
35 Michael Aguirre, author interview.
36 See the author’s “The Next Wall Street Scandal,”
American Prospect, Jan. 16, 2006.
37 Herring’s response was by letter, as cited in Vitek, letter to Leone, and Andrew Donohue, “Concerns raised over city’s ability to finance employee retirement fund,”
Daily Transcript, Dec. 6, 2002.
39 Record 28, no. 2, Society of Actuaries, 1-12.
40 Indictment,
U.S. v. Saathoff et al., 8.
41 Indictment,
U.S. v. Saathoff et al., 8-9, 17. The quote is from Lexin.
43 Indictment,
U.S. v. Saathoff et al., 18.
44 Aguirre VII, 16; Andrew Donohue, “Internal E-mail: Pension Official Pressured Attorney to Change Opinion on Deal,”
Voice of San Diego, Oct. 7, 2005.
46 James Gleason, author interview.
47 Kelling, Northcross & Nobriga, “City of San Diego, Facilities Financing Study,” Aug. 28, 2002, see esp. 19, 54.
52 Vitek, letter to Leone; Levitt, 75-76.
53 Robert Blum, letter to Frederick W. Pierce IV (board president, SDCERS), Nov. 18, 2002.
56 Diann Shipione, letter to the Honorable Dick Murphy and Members of the City Council, Nov. 18, 2002.
57 Diann Shipione, April Boling, author interviews.
58 Donna Frye, author interview; Donohue, “Concerns raised over city’s ability to finance employee retirement fund.”
59 Levitt, B-17; Aguirre VII, 13.
60 Ray Huard, “Council OKs library financing proposal. $312 million to cover new main facility, upgradings,”
San Diego Union-Tribune, Nov. 19, 2002.
61 Indictment,
U.S. v. Saathoff et al., 19; Philip J. LaVelle, “City Pension Plan, Part Two of Two,”
San Diego Union-Tribune, June 21, 2004.
62 P. Lamont Ewell, letter to Honorable Mayor and City Council, Dec. 6, 2002.
64 Michael Conger, Gleason, author interviews.
7 • THE BILL COMES DUE
1 Conger, author interview.
2 Conger, Michael Leone, author interviews.
3 Michael Leone, Reginald A. Vitek, author interviews, and Vitek, letter to Leone.
5 Andrew Donohue, “City officials hear hard numbers on retirement fund,”
Daily Transcript, Feb. 12, 2003.
7 San Diego Union-Tribune, May 21, 2003.
8 Fike, author interview.
9 Eugene Mitchell, April Boling, and Carl Luna, author interviews.
10 Conger, author interview.
12 Shipione, author interview; Paul S. Maco and Richard C. Sauer, “Report on Investigation, The City of San Diego City Employees Retirement System and Related Disclosure Practices, 1996-2004,” [hereafer Vinson & Elkins], 112- 114;
City of San Diego v. Orrick, Herrington & Sutcliffe, California Superior Court, Case No. GIC 857632, “Orrick’s Notice of Filing Corrected Special Motion to Strike Complaint” (hereafter “Orrick’s Notice of Filing”), 5.
14 Shipione, author interview; “Orrick’s Notice of Filing,” 5.
15 Vitek, author interview; see also “Defendant SDCERS’ Memorandum of Points and Authorities in Opposition to Plaintiffs’ Motion for Attorneys Fees and Costs,”
Gleason & Wood v. SDCERS et al. (hereafter,“SDCERS’ Memorandum”), 12-13, 14, 34, 46.
16 Vitek, author interview.
17 Vitek, author interview. “SDCERS’ Memorandum,” 16, also refers to Herring’s “profanity-laced tirade.”
18 “SDCERS’ Memorandum,” 16.
19 Michael Leone, author interview.
20 Don Bauder, “City Lights: $20 Million In Unanswered Questions,” SanDiegoReader.com, June 16, 2005; Conger, author interview.
21 Conger, author interview.
22 Vitek, author interview; SDCERS.
25 Andrew Donohue, “The History of V&E: A Special Report,”
Voice of San Diego, Sept. 9, 2005.
26 Scott Lewis, “Extra goodies for retirees added even more to pension deficit, report finds,”
Daily Transcript, May 5, 2004.
27 Scott Lewis, “Mayor puts weight behind specific pension reforms,”
Daily Transcript, July 7, 2004.
28 Scott Lewis, “Pension reform proposals met with opposition; council delays decision,”
Daily Transcript, June 30, 2002.
29 Dolores Huerta, author interview.
30 Phillip J. LaVelle, "City Hall pension politics heat up. Plan to scrap board may prove tricky for Murphy,”
San Diego Union-Tribune, July 4, 2004; Scott Lewis, "Roberts, Murphy, county, city sling pension mud,”
Daily Transcript, June 9, 2004.
31 Scott Lewis, “Retirement board overhaul will be on ballot, but with poison pill?”
San Diego Transcript, July 21, 2004.
33 Matthew T. Hall, “Shea says bankruptcy is city’s best route to financial recovery,”
San Diego Union-Tribune, June 30, 2005.
34 John M. Broder, “Sunny San Diego Finds Itself Being Viewed as a Kind of Enron-by-the-Sea,”
New York Times, Sept. 7, 2004.
35 Vinson & Elkins, 8; see also Aguirre I, 1-6; Aguirre IV, 1-5.
37 Matthew T. Hall and Jonathan Heller, “Independent cash at record flow in S.D. mayor’s race,”
San Diego Union-Tribune, Oct. 27, 2004. See also the press release of the Performance Institute dated Oct. 13, 2004, “Proposition J Proponents Mislead Voters to Push ‘Blank Check’ Tax Increase.”
38 DeMaio, author interview. See also Performance Institute, “TOT Tax Increase Proposal is Flawed and Misguided,” news release, July 26, 2004, and “No on Prop J. Absent Reform, hotel tax hike is waste of money” (editorial),
San Diego Union-Tribune, Sept. 30, 2004.
39 Hall & Heller, “Independent cash at record flow.”
40 John Kern, author interview.
41 Frye, author interview; see also Karen Kucher, “No Hesitations. Donna Frye’s life of activism has included women’s issues, the environment and politics,”
San Diego Union-Tribune, Dec. 26, 2004.
42 San Diego Union-Tribune, Dec. 16, 2004.
44 Peters, author interview.
45 Phillip J. LaVelle, “Aguirre asserts control of pension legal affairs,”
San Diego Union-Tribune, Dec. 17, 2004.
46 Peters, author interview.
47 Aguirre, author interview.
48 Robert Abel, author interview.
49 Abel and Aguirre, author interviews.
51 Abel and Aguirre, author interviews.
52 “Pension board. Will the mischief never end?” (editorial),
San Diego Union-Tribune, Jan. 29, 2005.
53 Aguirre II, 9, 95-98 (esp. 97), 106-7. Aguirre specifically exempted members who were not on the council at the time of the alleged securities violations.
54 Philip J. LaVelle, "S.D. officials are angry over Aguirre report,”
San Diego Union-Tribune, Feb. 11, 2005.
55 Matthew T. Hall, “City pension board refuses to cooperate in deficit inquiry,”
San Diego Union-Tribune, Feb. 19, 2005, and “San Diego chaos. City is sinking dangerously in legal quagmire” (editorial),
San Diego Union-Tribune, March 11, 2005.
56 Aguirre III, see esp. 7, 22.
57 Fike, author interview.
58 Performance Institute, “Poll Shows Skyrocketing Public Approval for City Attorney Performance and Investigations,” news release, Feb. 22, 2005.
60 Greg Moran and Kelley Thornton, “Councilmen Guilty. Convictions,”
San Diego Union-Tribune, July 19, 2005.
61 The study was published by the Center on Policy Initiatives.
62 Tony Perry, “San Diego Mayoral Hopefuls: Read Our Lips,”
Los Angeles Times, June 20, 2005.
63 “Heck no. Frye pension plan heavy on taxes, short on solutions” (editorial),
San Diego Union-Tribune, Oct. 27, 2005.
64 Andrew Donohue, “Figures Detail Controversial Pension Benefit Purchased by Murphy, Several Council Members,”
Voice of San Diego, Apr. 22, 2005. A year later, in June 2006, SDCERS’s deficit had shrunk to a still-serious total of $1 billion, representing a funded ratio of just under 80 percent.
65 “City of San Diego Pension Comparison,” Office of Labor Relations, as of Mar. 30, 2005.
66 Evan McLaughlin, “How Officials’ Pensions Change If Benefits Judged Illegal,”
Voice of San Diego, Aug. 27, 2005; Caitlin Rother and Ray Huard, “City manager to step down,”
San Diego Union-Tribune, Mar. 17, 2004.
67 Braun, “The smooth operator.”
68 Evan McLaughlin, “Official Embroiled in Pension Crisis Retires,”
Voice of San Diego, Aug. 5, 2005.
69 Conger, author interview.
70 Andrew Donohue, “Pension Officials Fire Back at Aguirre; Pension Whistle-blower Squelches Attempts to Reinstate Her on Board,”
Voice of San Diego, July 14, 2005.