I’m going to post this without comment for you all to read, digest, and discuss, because it seems like something worth discussing.
Few county officials were more adroit at milking the taxpayers than Tom Zablocki. Zablocki served as county clerk for 20 years, from 1968 to 1988. During his last term, two investigations by the old Milwaukee Journal, in 1986 and 1988, found he worked between 4 and 5 hours a day. Much of his time was spent working on his stamp-collecting hobby. He was also accused of spending time on the job conducting private real estate and legal business.
The voters, not surprisingly, didn’t look kindly on this and he lost his bid for reelection. But the wily Zablocki, who still had friends in the courthouse, later found another way to milk the taxpayers.
In the early 1990s, Milwaukee County officials approved a “buy-back” plan that allowed workers to go back in time and pay for pension contributions they hadn’t made in order to beef up their pensions. Many employees converted seasonal or part-time county stints in college and even high school into additional pension credits by paying pension contributions they had declined to make as young workers.
Zablocki apparently hadn’t made contributions to his pension. But in 2000, he managed to get hired to work for the county as a “program coordinator.” At the time the late F. Thomas Ament was County Executive and the courthouse was rife with cronyism: giving Zablocki another chance meant he could build a much better pension. (Zablocki and Ament both started in county government the same year and served together for 20 years.)
Zablocki used the buyback program to pay for pension contributions during his 20 years as county clerk, and worked as the program coordinator until June 2004 and then retired a wealthy man at age 64. He had only worked 24 years for the county, and hadn’t worked very hard, but was awarded a lump-sum “backdrop” payment of $375,322 in addition to an annual pension payment of $29,309. By now he’s collected at least $640,000 from the taxpayers.
But as it turned out, Zablocki, the consummate courthouse insider, made a mistake. County pension officials determined in 2007 that Zablocki’s buyback of his years as an elected official missed a deadline set in a county ordinance, and his payment was therefore too large under IRS rules. This was one of the revelations that came out in a mini-pension scandal unearthed by Milwaukee Journal Sentinel reporter David Umhoefer, who revealed the existence of the buy-back program.
Some 200 or so buybacks were found to be in violation because employees wrongly bought back pension time using money transferred from their deferred compensation savings account; because the buyback payment exceeded 25 percent of the employee’s annual salary; or because the buyback was made too late.
In reaction, county board members quickly took action. They passed a unanimous resolution in 2007 “encouraging the Milwaukee County Pension Board “to cease any prospective payment of a pension benefit related to a buy in or buy back that has been determined to be in violation of Milwaukee County Ordinance or Federal law and… vigorously pursue recovery of any payments made” to these employees.
Nine of those county supervisors are still serving: Mark Borkowski, Gerry Broderick, Marina Dimitrijevic, Willie Johnson, Jr., Patricia Jursik, Michael Mayo, James (Luigi) Schmitt, John Weishan and Peggy Romo West.
But none of them, apparently ever did anything to assure that the resolution was enforced. “I know I didn’t,” supervisor Borkowski admitted to me last April. “I don’t believe any of my colleagues did.” Nor did the administration of then-County Executive Scott Walker do anything about the problem.
Umhoefer’s story won a Pulitzer Prize. Yet the Journal Sentinel never followed up on the story to make sure the illegal buybacks ended. This is the paper that was asleep when the massive pension scam of 2000-2001 was passed (and reported by yours truly), and now the paper had fallen asleep on its own prize-winning story.
So things stood until last year when the administration of County Executive Chris Abele discovered the situation and was immediately alarmed. Abele’s staff sent letters to some 200 county retirees warning that their monthly pension payments will be reviewed and could be lowered. Abele initially wanted to go after the retirees to collect some $26 million in overpayments and interest that these people illegally collected. But he has since offered a compromise, suggesting the county forego collecting the past overpayment and only take action to see that future overpayments — with an estimated value of $10 million — are not paid.
But board members are outraged that he would dare suggest this. Board chair Dimitrijevic told the Journal Sentinel that Abele’s plan, even with its alterations, is “immoral” She went on to say, “It seems unfair that an employer who made mistakes, now comes back and harms the security of older adults who served the public.”
Needless to say, that’s a direct contradiction to the resolution Dimitrijevic supported in 2007. As for the morality here, what about all the county employees who couldn’t benefit from this legally questionable buy-back option — the height of county cronyism — and therefore have lower pension payments? Is this fair to them?