Barack Obama learned about politics in Chicago, a city controlled by the Democratic Party machine of the Daley family. In recent weeks, sweetheart deals between Mayor Daley’s office and several union bosses have come to light. Those deals have made the unions bosses enormously wealthy.
Obama wants to raise taxes on the wealthiest 1% of Americans. Ironically, the Daley machine and Obama are determined to make union leaders part of that 1% as quickly as possible, at the expense of taxpayers and ordinary, rank-and-file union members.
Through loopholes created by Democratic Party lawmakers, union leaders have received six-figure “double dip” pensions from the city while receiving equally huge salaries from their union positions. Meanwhile, governments and pension plans at all levels stumble toward insolvency and default, and ordinary taxpayers and union members struggle with financial hardship. Obama learned about union deals from the Daley machine, and his “jobs bill” is just another way to reward unions for their support.
Between father Richard J. and son Richard M., the Daleys served in the mayor’s office for more than half a century and attracted no less than seven separate federal corruption investigations. The Daleys have always been suspected of “fixing” the 1960 election for John F. Kennedy, delivering the Illinois Electoral College votes by the narrowest of margins.
The younger Daley’s brother, William, was Al Gore’s campaign chairman during the 2000 presidential race, personally traveling to Florida for the recount, and now serves as Obama’s chief of staff. And the newly anointed heir to the Chicago throne is none other than Rahm Emanuel, Obama’s previous chief of staff. Obama’s links to the Daleys and their power are well documented.
What makes the Daleys powerful is their partnership with labor unions. Union bosses provide the campaign contributions, the volunteers, and the votes that are the lifeblood of most Democrats’ political campaigns. In return, like so many other Democratic Party supporters such as Solyndra’s investors, union bosses are given access to huge amounts of money from taxpayers.
At the lower levels of the Chicago machine, faithful operatives of the Democratic machine are rewarded with jobs on the city payroll. The departments of streets and sanitation, code enforcement, and other city services are packed with loyal Daley supporters.
All city workers were of course organized by the unions, paying a portion of their city salaries as union dues. Much of the dues money, in turn, was passed on to Democratic politicians in the form of campaign contributions. The workers walked the precincts to get out the vote for the Democrats and, on Election Day, they often took a day off to maximize the GOTV effort.
As their years of loyal service turned into decades, and tens of thousands of Chicago Republicans sold their homes and moved to the suburbs, Democratic control of the city and county became cast in reinforced concrete. Any disputes became purely intramural in nature: one faction of the Democratic Party against another. And the most loyal Daley supporters moved up through the ranks, in city government and the unions.
Over the years, Democratic lawmakers created loopholes that made it possible for union leaders to work as little as one day in their civil-servant capacities, and then take extended leaves of absence in order to work for their unions — secure in the knowledge that their city pensions would be calculated on the basis of their far higher union salaries. As a state senator, Barack Obama voted in favor of these loopholes.
The first of these loopholes was created by Democratic state legislators in the mid-1990s, and word got around quickly and quietly. Almost immediately, the union leaders in Chicago began taking extended leaves of absence from their city jobs to work full-time for the unions.
Earlier, far more common sweetheart deals with union supporters involved taking a city job, working 20 years to qualify for a pension, then retiring and getting rehired for a different city job, collecting both a salary and a pension. After 40 years, two pensions plus Social Security, and whatever other nest eggs the loyal Democratic Party supporter could acquire, make a very comfortable retirement package.
But even that wasn’t good enough for the union bosses, and so these pension loopholes were created. The most extreme example of the union leaders’ sweetheart deals was given to Dennis Gannon, president of the Chicago Federation of Labor. Starting in 1973, he worked for 17 years as an equipment operator and manager, then took a leave of absence to serve as a union business agent.
When going on a leave of absence, of course there’s a form to fill out. Conveniently, the expiration date on Gannon’s form wasn’t filled in by anyone at Streets and Sanitation. He could have stayed on a leave of absence until retirement.
But Gannon and his cronies found an even more lucrative way to exploit the city pension fund. He resigned from the city job, received a refund of all contributions to the pension fund, was then rehired for a single day, then went on another leave of absence to work for the union again.
Since his formal retirement in 2004, Gannon has collected a city pension of $158,000 a year. It’s so high that it exceeds federal limits, and the city dutifully filed the necessary paperwork for an IRS exemption. So far, Gannon has collected over $1 million. Until 2010, this pension was in addition to his CFL president’s salary, which was over $240,000. Now with Grosvenor Capital Management, Gannon manages the Illinois teachers’ retirement fund and other public pensions funds.
It may not be a coincidence that the teachers’ retirement fund was the subject of several corruption trials, leading to the conviction of political fixer Tony Rezko, among others. (The federal trial of one of Rezko’s co-conspirators, Bill Cellini, started early this month.) Rezko’s bundling of contributions for the campaigns of Obama and Rod Blagojevich, and his arrangement of a sweet real estate deal for Barack and Michelle Obama, are also well known.
Rezko and Blagojevich picked board members for the retirement fund’s board of trustees and another Illinois state board, so that they could steer billions of taxpayer dollars to investments that benefited the friends and families of Illinois Democrats. Gannon, by collecting huge commissions on retirement fund investments, is only one of these beneficiaries.
Blago is one of the machine’s beneficiaries, having married the daughter of one of Daley’s ward bosses. Obama is another beneficiary, having married the daughter of another ward boss.
Another union “double dipper” in the pension funds is Liberato “Al” Naimoli. In 1985, working a city job that paid $15,000 a year, he took a leave of absence that lasted 25 years. Rising to the president’s office of Cement Workers Local 76, Naimoli finally retired from his city job in 2005 with a pension of $158,000 a year, based on his inflated union salary.
Like Gannon, Naimoli’s pension is so huge that it violated IRS regulations and required special permission, duly filed for by the city. Like Gannon, Naimoli is also eligible to receive a huge pension from the union, even though he signed a city pension application in 2009 stating that he wasn’t enrolled in a union plan.
Another sweetheart pension deal was given to Thomas Villanova, an official of the International Brotherhood of Electrical Workers Local 134. Villanova went on a leave of absence in 1995 from a city job that paid $40,000 a year, then formally retired in 2008. But due to the unique state law created for their union allies by Democratic lawmakers, his $108,000 city pension was calculated based on his union salary.
Villanova also kept his union position. In order to qualify for the city pension, Villanova signed a pension application stating that he wasn’t participating in any other pension plan. This wasn’t true. Villanova was signed up for another pension through the union. This was uncovered last year, when the double-dipping by Villanova and three other Local 134 officials was exposed.
In the real world, they would have been permanently disqualified from collecting city pensions. But in the Chicago machine, there’s always a way to put up some nice wallpaper over these little blemishes. All four kept their city pensions after signing affidavits — sworn statements, whose falsehood could be punished with prison sentences for perjury — promising not to collect their union pensions.
Then their lawyer tried to transfer about $200,000 from one union pension fund to another, with the obvious purpose of providing Villanova with a different union pension. In the fantasy-is-reality world of Chicago Democrats and union bosses, nobody ever pays for crimes like this except taxpayers and rank-and-file union members.
One of the other three men involved, Tim Foley, served as business manager of Local 134. Like Villanova, he took a 13-year leave of absence from a $47,000 city job in 1995 to work as a union executive. Like Villanova, he formally retired from the city in 2008 and collected a $105,000 pension based on his union salary.
Like Villanova, Foley was caught contributing to a union pension fund, and signed an affidavit promising to disclaim the union pension. As he did for Villanova, the union officials’ attorney moved roughly $300,000 in rank-and-file union members’ dues to another pension fund on behalf of Foley. On October 2, under increasing media scrutiny, Foley resigned from his position with the union.
These enormous pensions have been enabled by cooperative Democratic Party politicians in the city of Chicago and in Illinois state government, and their many friends throughout the administrative maze. From an expiration date being left blank on a leave of absence application, to being rehired and then taking a leave of absence after just one day, to calculating the pension based on a huge union salary rather than much smaller city earnings (and smaller pension fund contributions), every step of the way was made easier by the Democratic machine.
Pat Quinn, the new Democratic governor of Illinois who rose to power after Rod Blagojevich was impeached and removed from office, was supposed to be the squeaky clean outsider who never soiled his hands with the corruption and filth of union politics. But an investigation has recently revealed that during the 2010 primary season, Quinn made a deal with the largest public employees’ union, the American Federation of State, County and Municipal Employees.
If AFSCME would endorse Quinn for the governor’s office, Quinn promised that he wouldn’t cut a single AFSCME job for the next two years. This was an enormous concession, since Illinois state government was already billions of dollars in the red. AFSCME endorsed Quinn. This endorsement carried him through tough battles in the primary and in the general election.
And now that Quinn is safely ensconced in the governor’s mansion, we learn that he’s just as dirty as the Daleys. This deal with AFSCME is costing the state billions, at a time when it faces the worst budget shortfalls in its history. It would have been nice to be able to lay off a few thousand state employees for a few months, just to give the state some breathing room.
How did Quinn and the Democrat-controlled state legislature keep the state afloat?
With an enormous increase in the state income tax. How did you think they did it?
At the county level, in a manner that echoed the Daley dynasty in the city of Chicago, Todd Stroger virtually inherited the county chairman’s position after the death of his father, John. Several of Todd Stroger’s family members, friends and political cronies were then packed into county government with six-figure salaries.
To pay these salaries and keep the county from hemorrhaging red ink, hundreds of ordinary employees who didn’t have the clout were laid off, including nurses at county health care facilities. The quality of care for patients was impacted. This was especially ironic, coming from a Democratic Party that has promised to improve health care, but the money saved still wasn’t enough to cover those huge administrative salaries.
How did Stroger and the Democrat-controlled county board keep the county afloat?
With an enormous increase in county sales and property taxes. Are you surprised?
The new county chairwoman, Toni Preckwinkle, has promised reform. But she’s a Democrat, and the unions have proven difficult to tame. Few Democrats survive for long in Illinois politics without making some sort of deal with the unions, as Quinn proved — and as Stroger found out the hard way. (You didn’t think those laid-off nurses were non-union, did you?) Any Democrat who doesn’t make a deal with them soon finds himself challenged in the next primary, by a more union-friendly Democrat who plays hardball.
This is the political culture that spawned Barack Obama. Ever since he graduated from law school, he has been immersed in this culture of partnership, and its sweetheart deals with union bosses, political cronies, and fixers like Tony Rezko, and bare-knuckles beatings for anybody who gets in the way. Claiming that Obama emerged from this culture without corruption would be like claiming that he spent his entire adult life living in a bordello, but he’s still a virgin.
Obama’s relationship with the unions deserves greater scrutiny. Pat Quinn proved that every Democrat gets his hands dirty. Obama’s new “jobs bill” contains a lot of pork for the unions that got him elected, since “infrastructure” is a code word for “union jobs.”
Part of the “jobs bill” is designated for state, county and municipal governments, particularly where Democrats like Quinn have made promises to unions that are proving difficult to keep. It’s educational to examine the fine print of any Obama proposal that is purported to help repair the economy and create jobs, as the Solyndra and LightSquared cases have clearly demonstrated.
The mainstream media have completely abdicated their responsibility to examine Obama’s background, and his links to the nest of corruption that is the Chicago Democratic machine. National news media have shown a distinct lack of curiosity about Obama’s ties to the unions, the Chicago machine, Tony Rezko and Rod Blagojevich, who were well-served by Obama when he was a state senator.
In a refreshing exception to this trend, The Chicago Tribune and WGN-TV have relentlessly investigated the links between the Daley clan, the Chicago machine, the union bosses and their sweetheart pension deals. Tribune political columnist John Kass has a special nickname for Rezko: Obama’s “real estate fairy.”
Much investigative work remains to be done. The Tribune reports that over three dozen union leaders are getting these sweetheart deals. And the lenses of their investigative microscopes need to be directed higher in the Democratic Party.
All the way to the White House.
Jim Davis is a freelance writer and IT specialist working for a major Chicago law firm. He has been observing corrupt Chicago politicians (from a safe distance in the suburbs) for nearly half a century.