Pension Scandal: What really happened and the Results

Supervisor John Weishan has emerged as a break out leader on the Milwaukee County Board of Supervisors. He’s speaking out on the recently filed lawsuit against the actuarial firm that recommended the flawed pension plan to Milwaukee County, on Journal Communications tabloid-style coverage of the scandal, and County Executive Scott Walker‘s self-serving bashing of Democrats to serve his own needs.

“Journal Communications saw this as an opportunity to go after the democratic establishment in Milwaukee County — they’re a republican newspaper so facts be damned” said Weishan. “They conjured it up. Had (Charlie) Sykes and the Journal-Sentinel not beat up on the issue for months, lied and distorted the facts, this wouldn’t have gained ground.”

Don’t sugar coat it John. Tell us how you really feel.

The fact is that the Journal-Sentinel, suffering from decreasing circulation, was looking for a way to increase their numbers. Since covering the news isn’t something they were willing to tackle, tabloid-style journalism was their next step.

The lawsuit lays out the facts. Mercer (the actuarial firm that did the analysis of the pension plan) did not do their professional due diligence when it comes to providing accurate and competent financial recommendations — the recommendations that the county paid big bucks to get. Their recommendation was fraught with unrealistic revenue projections and their analysis lacked any connection with the fiscal reality of what they were recommending. In one recently uncovered document, Mercer actuaries went so far as to say that if the county followed their recommendations, they would never have to backfill the pension fund with tax dollars. They even went so far as to guarantee the county would conservatively make 13% per year.

Gary Dobbert, the pension plan architects is not blameless — perhaps clueless is a better description.

To understand the issue you have to look back to the year 2000. At that time the county was having a human resources crisis. Coming off of an economic boom during the Clinton years, unemployment was extremely low. Much of the county work force was set to retire and Dobbert expressed deep concerns that core service needs would not be met when the retirement rush started. Attending a seminar, Dobbert got the idea of offering an incentive to county employees to stay longer in the anticipation that the economic boom would eventually fizzle and it would once again be easier to find quality employees as unemployment rates increased.

At least Dobbert was right about one thing — the economy did fizzle under the not so watchful eye of George W. Bush.

Confusing a backdrop with another human resources technique to retain employees, a drop, Dobbert saw a way to keep quality veteran employees longer while at the same time not having to increase their pay which would have required additional tax dollars. The pension fund, which had experienced impressive growth due to wise investment decisions, would pay for any pension enhancements Dobbert said, and it was those enhancements that could encourage the retention of employees past their eligible retirement age. County Board leaders, myself included, inquired as to why we couldn’t just use the excess in the pension fund to reduce taxes. It’s illegal was the simple response.

Dobbert was convincing when he said it was the only way to retain employees past the crisis period. The implication was that voters would take their revenge on Supervisors who didn’t support the pension plan because that was the only way to maintain the workforce. The ironies here are nearly too great to imagine since the County Exec at the time, Tom Ament, was pressured to step aside (which he did after recall petitions were filed) and seven Supervisors were recalled for voting for the very plan they thought would save tax dollars. I was one of the seven.

It continues to baffle me that even six years after the vote, the public continues to be buffaloed into thinking that it was Ament and the board that were looking for big payouts even though every single person who was recalled had already waived the backdrop benefit prior to recall petitions even being circulated. It was the Journal-Sentinel, and WTMJ (both owned by Journal Communications) talk radio show host Charlie Sykes who lambasted elected leaders daily for voting for a plan they claimed was a clear case of not doing their homework. Never in any of their coverage, did Journal Communications publicize any damning sentence that Supervisors should have read that the pension plan proposal was anything but good for the county.

Weishan’s comments about Journal Communications going after the democratic establishment is exactly what this as all about. I had once been the Chairman of the (Milwaukee County) Northshore / Eastside unit of the Democratic Party and I chose not to run for re-election to that post so I could pursue a seat on the County Board back in 1996. I made no effort to hide my democratic loyalties. My wife and I had been involved in Democratic politics for years and she was even listed on every Clinton yard sign in the State of Wisconsin since she was the Treasurer of the Democratic Party of Wisconsin. (Yes I’m proud of her — she’s a helluva woman.)

Another Supervisor who faced recall, LeAnn Launstein, was my first campaign manager and it was at a party event that I met Launstein. Linda Ryan, Kathy Arcizewski, Penny Podell, Karen Ordinans and Dave Jasenski — all democrats and all forced to go through the Journal Communications inspired recalls. County Executive Tom Ament — a self-described tight-fisted liberal Democrat also fell to the Republican media machine.

So Weishan nails it when he points out that this was all about partisanship.

Elected officials often get accused of meddling and micromanaging. Had the board and the Exec decided not to go with the recommendations of staff and the recommendations of the professionals who were paid to make those recommendations, they would have been accused of micromanaging. None of the eight that left office in 2002 were micromanagers. All eight were leaders on the County Board.

For nearly six months the Journal-Sentinel ran headlines bashing County leaders and hyping the pension scandal. Weishan points out that “they saw this as a stepping stone… as an opportunity and they went for it. They’re not going to turn around now and say ‘look, the county board didn’t do wrong’. They’ll never say the real people who caused the problem were Dobbert and Mercer actuaries or that if they had given Ament all the information and told the truth, this would have never happened.”

But the question that should be on people’s minds now is whether they want to continue to follow their mistake of electing Republican Scott Walker into office as they did in 2002 and again in 2004 knowing that he was elected based on a lie. Walker rode the Democrat bashing wave, promoted hate for Democratic ideas and blamed them for the problems the county faced. Despite inflation, rising energy costs and health care costs, Walker has intentionally instituted policies of aggressive borrowing for operating expenses to achieve his goal of freezing taxes in the four years he has been in office. While complaining of not receiving as much money from the State, Walker has blamed Governor Jim Doyle for not giving Walker enough money. Ironies abound here since Doyle actually increased transportation funding so Walker could improve mass transit bus service in Milwaukee County. Walker responded by raising bus fares, cutting bus service and using the Doyle’s funds for other purposes.

Weishan doesn’t mince words about what has happened since the scandal first broke. He said, “Republicans saw this as an opportunity to rip county government apart. It’s the Grover Norquist thing; kill the beast and eliminate government.” The wide scale cutting of services and the constant and consistent announcements of County departments experiencing deficits goes far to prove Weishan’s point. In the past year both the Parks Department and the Department on Aging announced deficits. Parks Director Sue Black, who was told by Walker that she was to propose a budget that was even less than the previous year, is faced with a Walker ultimatum — fix the deficit or lose your job. It was just a few years ago that Walker told former Parks Director Sue Baldwin to close the pools to save money and when the public was outraged, Walker pointed the finger at Baldwin and fired her and her top management staff. In order to complete his ruse on the public and his scapegoating of Parks officials, Walker called the media before going into the Parks offices to make the firings. Baldwin and others didn’t even know they were being sacked until swarms of cameramen descended upon the Parks offices right on cue before Walker made his big entry.

Not coincidentally, Sue Baldwin is married to Lev Baldwin — the last real Democrat elected Sheriff in Milwaukee County. Walker has worked hard to ferret out Democrats in County government and has been fairly successful in firing them or downsizing them out of a job.

Now Walker has presented another budget that appears poised to implode this year and facing a looming 2007 budget that will create major budgetary structural problems in County Government since even a tax to the (state limited) max budget is not likely to cover rising costs, Walker and the board face a nearly insurmountable task. To pay for his tax freeze, Weishan points out that “what Walker wants to do is not bargain in good faith (with unions) — he wants his buddies in Madison to change the law so he can break union contracts. What he wants to do is destroy the parks so much that he can justify selling off prime public land to his developer buddies.”


Walker has been successful in one thing — raising money from Republicans. Weishan points out that Rick Graber, Chairman of the Republican party and a partner at the Reinhardt law firm “gave Walker $50,000 in the dead zone. Graber said he wants to do more business with the county. It’s all about enriching themselves.” The dead zone is the two weeks prior to an election where candidates don’t have to report who gave what until after the election.

Weishan isn’t one to mince words. On Journal Communications political lynching of good people, he said they did it “because they’re eager for sensationalism, they want you to be guilty. They wanted to say Ament was getting a wheelbarrow full of cash. They don’t want to say some guy with coke bottle glasses in a back room got his abacus numbers wrong. They had that opportunity at the Journal-Sentinel and their own accountants knew it wasn’t true yet they ran with the story anyway.”

Here’s the rub. Walker wishes to further his personal political ambitions yet continues to rail against Ament, when he honestly knows that Mercer is at fault.

“But this is all about suppressing the vote in Democratic strongholds” says Weishan. “As John Kerry spoke at Pere Marquette Park, Walker stood with a bullhorn and heckled Kerry. This is all about tearing down and destroying Milwaukee County. If Scott Walker was really intent on cleaning up the pension mess he would have engaged in honest labor negotiations three years ago and he would have vigorously pursued any lawsuit the years ago” added Weishan.

Weishan was the one who sent a letter to District Attorney E. Michael McCann who forwarded the letter to then Attorney General Jim Doyle requesting the investigation into Dobbert and his role in the pension scandal. It was that letter that eventually opened the door to convicting Dobbert and to the current lawsuit against Mercer.

It gets more complex. If Walker chooses to ignore reality and continues to rail against Ament and Supervisors who voted for the plan, he will be consistent, but at his on peril. The 2007 budget promises to be disastrous and 2008 will be even uglier.

Frustrated with local medias promotion of a Republican agenda, Weishan cited the recent prioritization of coverage in the Journal-Sentinel. “Instead of focusing on Tom Delay stepping down, they had a picture of a guy with a styrofoam beer keg on his head — the biggest corruption scandal in the last 50 years and sports fan from a small town franchise gets headlines; but we sue Mercer for $100 Million and it gets a small blurb and no follow up the next day. It wasn’t banner headlines like when they were crucifying us. This is the epitome of their coverage — they focus on a beer keg foam hat and the real story was a huge corruption story. A huge anti-war referendum passes right here in our own county and in numerous places around the sate and you would never know it from looking at the front page of the Journal-Sentinel.”

It’s refreshing to hear a local pol talk frankly.

Jim McGuigan is a former Milwaukee County Supervisor who served from 1996-2002.
Suggested Movie: Bonfire of the Vanities with Bruce Willis and Tom Hanks. Its classic about a down and out reporter latched onto a man of wealth and rode to the top. It speaks to how the media circus got created and facts were thrown out the window.



  1. Seth Zlotocha:

    Great post, Jim.

    Is this also appearing somewhere else? It’s important to get this info out there.

  2. Jim McGuigan:

    No Seth. No one else knows.

    It’s another Watchdog Milwaukee scoop just like the Ralph Ovadahl scoop and just like the sales tax scandal scoop. The first one has gotten some attention in the mainstream media but the second has not gotten even a whisper.

  3. Watchdog Milwaukee » If We Knew About CRG Then What We Know Now:

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