Follow the Money

Wednesday, Dec. 13, 2006 | The San Diego Union-Tribune blames the labor representatives for the pension deficit because they voted to allow the mayor and City Council to underfund the pension system. This blame is used to justify reducing the pensions of the workers.

In fact, the city and county of San Diego are simply following the lead of corporate raiders like Carl Ichan: a “hostile takeover,” a raid on pension funds, and then a bankruptcy that leaves employees without promised benefits.

Pension funds are one of the largest “pots of money” and are, therefore, the preferred target for raids. In this case the city raided the fund by underfunding, now they want to default on their debt to the city retirees.

The other huge question is “Who benefited from this underfunding?” Follow the money! The initial impetus was expanding the convention center to attract the Republican Convention. By not paying their pension obligation, the city was able to convince the taxpayers that Chargers “seat guarantee” and a new Petco Park Baseball Stadium for the Padres were painless expenditures.

So, perhaps the Chargers, the Padres, and the San Diego County Republican Party would be the proper targets of legal action to get remuneration for the taxpayers.

Another way to look at the situation might be to acknowledge the sales pitch of the politicians. The money spent on such things attracts business and contributes to the economy of the city of San Diego, to the benefit of all citizens. In this viewpoint one might say the money diverted from the underfunding of the pension fund was put into “public service” and has provided infrastructure that has benefited all the citizens of the city. In this view one might look at this pension underfunding as a loan, upon which the city is now attempting to avoid repaying.

The salient point is that the money from the pension underfunding was invested in projects that benefited the taxpayers of this city. In this sense the taxpayers were never “cheated” out of anything, and they now owe the city employees for the loan taken out by their representatives, the mayor and City Council, when they underfunded the pension fund.