Voice For Liberty

Category: Politics

  • State pension cronyism

    State pension cronyism

    A new report details the way state pension funds harm workers and taxpayers through cronyism.

    Updated to accurately reflect the time period of the targeted investments.

    American Legislative Exchange Council (ALEC) has released a report detailing the various ways state employee pension funds are harmed by cronyism. The report may be read at Keeping the Promise: Getting Politics Out of Pensions.

    The problem, ALEC reports, is: “Unfortunately, many lawmakers and pension plan officials have other priorities besides doing what is best for workers. They see the billions of pension fund dollars they manage as an opportunity to advance their own agendas. Rather than investing to earn the best return for workers, they use pension funds in a misguided attempt to boost their local economies, provide kickbacks to their political supporters, reward industries they like, punish those they don’t and bully corporations into silence and behaving as they see fit.”

    One form of pension fund cronyism is Economically Targeted Investments (ETIs). These are local investments “that have been selected for their economic or social benefits in addition to the investment return to the employee benefit plan.” Kansas has its own experience with this type of cronyism. During the first half of the 1980s KPERS, the Kansas Public Employee Retirement System, made numerous targeted investments that led to large losses. One newspaper article reported: 1

    It all seemed so easy to many economic development planners.

    In an era of hard-to-get money for business start-ups and small business expansion, why not tap into the state’s healthy $3 billion-plus retirement funds as a source for seed capital?

    After all, it is there. And much of the profits earned by the Kansas Public Employees Retirement Systems have come from out-of-state investments.

    For many Kansas legislators, the lure of using KPERS money for economic development was tempting. So KPERS, under considerable legislative pressure, agreed to target nearly 10 percent of its fund for business expansions in Kansas.

    But three years after that decision, it is clear that KPERS money is not a panacea for economic development.

    Here is one particularly egregious example of how KPERS did business.2 In this case, the chair of KPERS benefited personally from KPERS investment decisions, and in a brazen manner:

    Take, for example, the $7.8 million investment in Emblem Graphic Systems, a company based in Kansas City and Denver that manufactured specialty package labels. According to court documents:

    KPERS Chairman Mike Russell was on the Emblem board of directors and had personally guaranteed $200,000 in loans to the company.

    Shortly before KPERS invested $5.3 million in Emblem in 1985, Russell resigned from his Emblem seat. The KPERS loan, however, was used to relieve Russell of his obligation to cover the earlier loans totaling $200,000.

    KPERS continued to invest in the company until 1988, At one point, KPERS even paid $273,305 to itself to pay back the money it had lent Emblem when the company was sold. KPERS got back only $1.76 million of the $7.8 million it had lent the company.

    Russell, however, was able to make a profit on his 3,000 shares in Emblem when the company bought him out for $48,330 — using KPERS money.

    KPERS is suing, among others, Russell, the lawyers who approved the transactions, and Kenneth Koger, who managed the Emblem investment and about 70 percent of the investments in question.

    Russell was not available for comment.

    In 1992, Russell pleaded no contest to one felony count of aiding and abetting securities fraud regarding a different KPERS investment.3

    In September 1991 the loss to KPERS was given as $92 million. 4 Lawsuits continued until 2003.

    The governor of Kansas during the time of the targeted KPERS investments was John Carlin (1979 to 1987).

    —
    Notes

    1. S. Gossett/The Wichita Eagle, F 1989, ‘Disappointing returns the percentage of the KPERS fund given over to new business ventures has been reduced in light of big losses’, Wichita Eagle, The (KS), 16 Oct, p. 7D, (online NewsBank). ↩
    2. Hobson, G 1996, ‘Full Accountability’, Wichita Eagle, The (KS), 22 Sep, p. 1A, (online NewsBank). ↩
    3. Press, A 1992, ‘Former KPERS Chief Sentenced To Probation For Securities Fraud’, Wichita Eagle, The (KS), 25 Jun, p. 4D, (online NewsBank).} ↩
    4. “After six years of investing in small- and medium-sized companies in Kansas, the state pension fund has 87 investments that are worth $231 million less than the fund paid for them, analysts told the fund’s trustees Friday. Considering that KPERS has collected about $139 million from those companies, however, the fund has lost $92 million in cash on its so-called ‘direct placement’ program, according to estimates by the staff of the Kansas Public Employees Retirement System.” Cross/The Wichita Eagle, J 1991, ‘Kpers Losses Put At $92 Million Lawyer Predicts ‘Monumental’ Suit’, Wichita Eagle, The (KS), 14 Sep, p. 2D, (online NewsBank). ↩
  • From Pachyderm: 2016 general election analysis

    From Pachyderm: 2016 general election analysis

    Voice for Liberty radio logo square 02 155x116From the Wichita Pachyderm Club this week: A panel discussion on the results of the 2016 general election. Panelists were:

    • Mark Kahrs, Member of Kansas House of Representatives and Kansas Republican National Committeeman
    • Clayton Barker, Executive Director, Kansas Republican Party
    • Mark Dugan, Dugan Consulting Group

    This audio presentation was recorded on November 11, 2016.

    Mark Dugan, Clay Barker, and Mark Kahrs
    Mark Dugan, Clay Barker, and Mark Kahrs
  • National economic statistics

    National economic statistics

    Gross Domestic Product and spending, in an interactive visualization.

    Click here to use the visualization. Data from Bureau of Economic Analysis, part of the United States Chamber of Commerce.

    Federal Government Revenue, Spending, and Deficit as Percent of GDP. Click for larger.
    Federal Government Revenue, Spending, and Deficit as Percent of GDP. Click for larger.
    Real Gross Domestic Product. Click for larger.
    Real Gross Domestic Product. Click for larger.
  • From Pachyderm: Alan Cobb from the Donald Trump campaign

    From Pachyderm: Alan Cobb from the Donald Trump campaign

    Voice for Liberty radio logo square 02 155x116From the Wichita Pachyderm Club: Alan Cobb, who is National Coalitions Director for the Trump/Pence presidential campaign. His topic was “Make America Great Again Presidential Campaign.” This is an audio presentation recorded on September 23, 2016.

  • From Pachyderm: Radio Host Joseph Ashby

    From Pachyderm: Radio Host Joseph Ashby

    Voice for Liberty radio logo square 02 155x116From the Wichita Pachyderm Club this week: Radio Host Joseph Ashby, host of The Joseph Ashby Show. His talk focused on the administration of Kansas Governor Sam Brownback. Bob Weeks provided the introduction. This is an audio presentation recorded on August 26, 2016.

    Shownotes

  • Wichita Metro Chamber of Commerce on the campaign trail

    Wichita Metro Chamber of Commerce on the campaign trail

    We want to believe that The Wichita Metro Chamber of Commerce and its PAC are a force for good. Why does the PAC need to be deceptive and untruthful?

    Wichita Chamber PAC mailing for David Dennis, excerpt

    In a mailing supporting David Dennis, the political arm of the Wichita Metro Chamber of Commerce makes this statement about Karl Peterjohn: “The current county commissioner has spent his life making money from the government sector. When not working for the government, he worked as a registered lobbyist.”

    If we look at reality, we find that the candidate who has been a government employee for his entire adult career, according to his bio, is Dennis. Working as a lobbyist is a private sector job, except for taxpayer-funded lobbyists. It’s not “making money from” the government sector. (Even if you disagree with lobbyists not “making money from” the government sector, Peterjohn has worked in private sector jobs that had nothing to do with government. There’s an outright lie from the Chamber.)

    Karl Peterjohn lobbying for taxpayers.
    Karl Peterjohn lobbying for taxpayers.
    As I’m sure the Chamber knows, Karl Peterjohn lobbied on behalf of Kansas taxpayers, working to keep taxes and spending low. The Wichita Chamber, on the other hand, wants more taxes. Voters may remember that the campaign to create a Wichita city sales tax was run by the Wichita Chamber.

    Why does the big-taxing Wichita Metro Chamber of Commerce and its PAC support David Dennis? The answer is they want more taxes from you. They must see Dennis as compliant with their desire for higher taxes.

    Wichita and U.S. job growth. Click for larger.
    Wichita and U.S. job growth. Click for larger.
    Wichita and U.S. personal income growth. Click for larger.
    Wichita and U.S. personal income growth. Click for larger.
    Wichita and U.S. GDP growth. Click for larger.
    Wichita and U.S. GDP growth. Click for larger.
    It’s not only this. Another mailer says Peterjohn opposed building the Intrust Bank Arena. An accurate statement is Peterjohn opposed raising taxes to fund the arena. Many others held the same belief, as the vote for the arena tax was close, with 48 percent voting no tax for the arena. By the way, that tax was a sales tax, the type that falls disproportionately on low-income families.

    We want to believe that our Chamber of Commerce is a force for good. Why does the Chamber need to be deceptive? Why does it lie to voters?

    It would be one thing if the Wichita Chamber was a positive force for the Wichita-area economy. But the Chamber and its subsidiaries have been managing economic development for a long time. Nearby is a chart of job growth data from the Bureau of Labor Statistics. Wichita job growth hasn’t always lagged behind the United States. But Wichita is now behind, and as the Wichita Chamber has taken more responsibility for managing our local economy, the gap between Wichita and the country is growing. Wichita is falling behind.

    Wichita and United States Job Growth 2016-07

  • Roger Marshall campaign setting new standards

    Roger Marshall campaign setting new standards

    Attacks on Tim Huelskamp reveal the worst in political campaigning.

    When the campaign of Roger Marshall accuses Tim Huelskamp of being in favor of abortion, you know his campaign is spiraling out of control. Either that, or the Marshall campaign is deliberately lying about a politician’s record.

    Beyond this issue, the Marshall campaign and its surrogates are making arguments that simply have no basis in reality. An example is one radio ad, placed by an independent spending group, that uses the term “Washing-Tim.” The ad tries to persuade voters that Huelskamp has sold out to the Washington establishment. That is a true whopper, as Huelskamp has been anything but an establishment crony.

    As an example, Huelskamp opposed the reauthorization of the Export-Import Bank last year. This is an issue that draws a bright line, with progressive Democrats and left-wing Republicans on one side, and free-market, limited government conservatives on the other. The issue truly and precisely sorts politicians into two groups, and Huelskamp is on the right side of this issue. Which is to say, the non-establishment side. Yet, we get “Washing-Tim” from Marshall supporters.

    Part of the problem is that officeholders in legislatures, both state and federal, must often vote on bills that contain hundreds of provisions. This bundling of so many often disparate issues into one vote allows unscrupulous campaigns to label someone as a supporter of an issue. That’s what the Marshall campaign and its surrogates are doing.

    Mark Holden, a top leader of groups that support free-market causes including Americans for Prosperity, told The Hill this:

    I don’t know who is behind [the ESAFund], I’ve heard different rumors about it, but Mr. Singer and the Ricketts family have been good partners of ours in the past and in the present as well. I totally am mystified by Ending Spending and their point of view. I just wonder who could be better [than Huelskamp] on the issues that a group like Ending Spending, I mean their whole name … who could be better on these issues than Tim Huelskamp? If you believe in fiscal responsibility, fiscal conservatism, the proper role of government, particularly on these economic issues that I’m talking about and that our network is focused on; we don’t know of anyone who’s better than Tim Huelskamp.

    Huelskamp’s free-market bona fides are buttressed by his lifetime ratings with groups that focus on fiscal conservatism. Club for Growth rates Huelskamp at 100 percent lifetime. Americans for Prosperity scores him at 98 percent.

    During election season, especially in close campaigns, we’re accustomed to seeing campaigns paint opponents in unflattering light. The Roger Marshall campaign and its surrogates, however, may be establishing a new standard for deceptive behavior and outright lies.

  • Say no to Kansas taxpayer-funded campaigning

    Say no to Kansas taxpayer-funded campaigning

    Kansas taxpayers should know their tax dollars are helping staff campaigns for political office.

    As reported by the Wichita Eagle, it is perfectly allowable for some Kansas state government employees to work on political campaigns.1

    Can you spot the taxpayer-paid state employees on the campaign trail? The Wichita Eagle says there are two. (Click for larger)
    Can you spot the taxpayer-paid state employees on the campaign trail? The Wichita Eagle says there are two. (Click for larger)
    Not all Kansas state government employees can work on campaigns while being paid by taxpayers. Only personal staff members of elected officials can. But this can be quite a large number of people. The Eagle reports that Governor Sam Brownback has 21 personal staff members.

    It’s not only the governor that has taxpayer-paid employees on the campaign trail. The Eagle also reports that a member of Senate President Susan Wagle‘s office has been on the campaign trail.

    That senate employee, along with an employee of the governor’s office, were spotted campaigning for Gene Suellentrop. His Facebook page seemed pleased with their participation, again according to Eagle reporting:

    Rep. Gene Suellentrop, R-Wichita, who is seeking the vacant seat in Senate District 27, posted a photo of himself and 10 campaign door walkers on Facebook last month with a message saying, “The Suellentrop for Senate crew! Coming soon to your door step.”

    The photo, posted on June 14, a Tuesday, includes Ashley Moretti, a member of Brownback’s staff, and Eric Turek, who works for Senate President Susan Wagle, R-Wichita.

    “Those two showed up late that afternoon on their own, I have not requested any help from any leadership,” Suellentrop said in an e-mail. “They were sure happy to get into a picture of our winning campaign.”

    The first question the taxpayers of Kansas ought to ask is this: If these taxpayer-paid staff members have time to work on political campaigns, who is doing the work of the people of Kansas in their absence? What tasks are postponed so that these staff members can work on campaigns?

    The answer to this question, I’m afraid, is that there are too many staff members.

    The second question we should ask is this: Why is this practice allowed? There is a ruling from the ethics commission that allows this use of personal staff. Which leads to the third question: Why hasn’t the legislature passed a law to prohibit this practice?

    The answer to that last question, I’m afraid, is that the ruling class protects its own. For example, there is an organization known as the National Republican Senatorial Committee. Its job is to re-elect Republican senate incumbents. It doesn’t say this, but that is what it does. This is representative of the attitude of the political class. Once most officeholders have been in office a few years, they comfortably transition to the political class. Thereafter, their most important job is their re-election campaign, followed closely by the campaigns of their cronies.

    This is why you see Brownback and Wagle lending taxpayer-funded staff to the Suellentrop campaign. Should he be elected to the Kansas Senate, well, how can’t he be grateful?

    Here’s what needs to happen.

    First, this process must stop. Even though it is allowable, it is not right. We need leaders that recognize this. (Both Republicans and Democrats are guilty.)

    Second. The trio of Suellentrop, Brownback, and Wagle need to reimburse Kansas taxpayers for the salaries of these staff for the time spent working on campaigns. (We should not blame the staff members. It’s the bosses and rule makers that are the problem.)

    Third. Brownback and Wagle need to send staff to work for Suellentrop’s Republican challenger to the same degree they worked on the Suellentrop campaign. Either that, or make a contribution of the same value of the campaign services these taxpayer-funded Kansas state government workers supplied. Any other candidate in a similar situation — that of having taxpayer funds used to campaign against them — should receive the same compensation.

    Now, some may be wondering how is this different from the governor endorsing senate candidates in 2012. It’s one matter for an officeholder to endorse a candidate. It’s an entirely different matter to send taxpayer-paid staff to work on campaigns. I hope that didn’t happen in 2012.

    Fourth. Apologies to Kansas taxpayers are in order, as is a quick legislative fix. And, a reduction in personal staff members, as — obviously — there are too many.

    Finally, thanks to the Eagle’s Bryan Lowry for this reporting.

    —
    Notes

    1. Lowry, Bryan. Taxpayer-funded campaign staff can knock at Kansans’ doors. Wichita Eagle, July 17, 2016. Available at www.kansas.com/news/politics-government/election/article90179637.html. ↩
  • Candidate forum: Kansas Senate and Sedgwick County Commission

    Candidate forum: Kansas Senate and Sedgwick County Commission

    The Sedgwick County Republican Party held a candidate forum. Invited were candidates for Kansas Senate, district 27, and Sedgwick County Commission, district 3. Candidates are:

    • In Senate district 27: Lori Graham and Gene Suellentrop
    • In Sedgwick County Commission district 3: David Dennis and Karl Peterjohn.

    This is an audio presentation recorded on July 14, 2016.