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Plunder: How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation

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How's your government treating you lately? I thought so. Unjust wars. Torture. Inflation. Wild spending. Record deficits. Record debt. Bankruptcy. Police brutality. Officious officials. Depression.

It's time to get even. Or at least get an explanation.

That's just what you get in Steven Greenhut's shocking Plunder!: How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation. Although it covers government at all levels, it mainly focuses on state and local governments' assaults on citizens' pocketbooks and liberties.

Greenhut is familiar to LRC readers as the deputy editorial page editor and columnist for The Orange County Register from 1998 to 2009. He was my colleague there for eight of those years. He is the best journalist of local and state government in America, digging into the roots of corruption, largesse, and repression that have grown so alarmingly in recent years.

This fall he left The Register to head the new Investigative Journalism Center and News Bureau at the Pacific Research Institute in Sacramento.

You won't find a better writer, so this is an easy read of 240 pages - plus some resources in back to continue the fight. But you'll find yourself stopping every few pages to open a window, stick your head out, and scream, like Howard Beale in Network, "I'm mad as hell and I'm not taking this any more!"

Although the central ("federal") government's oppression is increasingly pervasive and poisonous, most of us still deal more often with local or state authorities. Most of us also have a favorable opinion of a great school teacher, a fireman who brought down a child's cat from a tree, or a cop who helped change a flat tire on a car. And most of us have local government workers as our neighbors and friends. Government is so big now, it's hard not to.

But in just the past three decades, government has far outstripped any rational limit on its size. As Greenhut reports, as recently as the 1970s (and I can confirm this from memory), government workers usually were paid a salary slightly less than private-sector counterparts. But they got great benefits, a decent pension, and sterling job security.

Since then, government pay and benefits have ballooned like Gov. Schwarzenegger when he used to inject himself with steroids. An example: The local firefighters' union in Orange County "gets annoyed when anyone refers to" their average annual pay and compensation of $[...], Greenhut writes. "Officials there confirm its accuracy, but complain that it unfairly angers taxpayers because the number includes the cost to the county for every benefit that firefighters receive."

Poor babies. Imagine buying a new car for $[...]. When you pull out your checkbook, the salesman says, "Actually, it's $[...]. We have to ad in pension and other benefits for the auto workers."

And though firefighting is an essential job, Greenhut notes that in most communities volunteer fire departments do the job.

*Dangerous jobs?*

But aren't public safety jobs among the most dangerous in America? Not really. Here's the list of most dangerous jobs, as complied by the Bureau of Labor Statistics:

1. Fishing-related workers.
2. Logging workers
3. Pilots and flight-related workers
4. Iron and steel workers
5. Taxi cab drivers
6. Construction workers
7. Farmers and ranchers
8. Roofers
9. Electrical power workers
10. Truck drivers and sales-related drivers
11. Garbage collectors
12. Law enforcement

Moreover, people going into these jobs know they might be dangerous. That's their choice. An Alaska crab fisherman, whose fatality rate on the job is 90 times that of the average worker, knows he could drown. Yet he chooses to do the job anyway.

A widely quoted 1999 article by Thomas Aveni of the Police Policy Council claims that the job so stressful that police officers, on average, live to be only 53-66 years of age. "If that were so," quips Greenhut, "there would be no unfunded liability problem because of pension benefits."

In fact, policemen and firemen live about as long as everybody else. Greenhut quotes a study by the Oregon Public Employees Retirement System on the age-60 life expectancies for the system's workers (the years they can expect to live after 60):

* Police and fire males: 22.6.
* General and service males: 23.4.
* Police and fire females: 25.7.
* General service females: 25.7.

*Pension tsunami*

These facts have not prevented the recent trend - caused by overwhelming union power over politicians - of pension spiking. Not just police and fire, but many other government retirees get "3 percent at 50." Greenhut explains: "So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that for the rest of her life. The taxpayer typically makes the complete retirement contribution throughout the officer's years of work."

And pay is, indeed, generous. "If he earned a slightly above-average California police salary of $[...] a year (base, not counting overtime, which is not calculated in the retirement formula), he would receive $[...] a year until he dies."

In his mid-50s, the retired officer commonly would take another job - often in government, with another tax-funded pension.

Taxpayers are on the hook for 100 percent of the pensions - no matter how bad the economy gets. And taxpayers are stuck paying for bad investments. The California Public Employees Retirement System (CalPERS) stupidly invested heavily in the recent real estate boom.

Greenhut writes, "The bubble burst and CalPERS lost 103 percent of the value of its housing investments in one fiscal year. Here's the kicker: CalPERS not only blew its investments on some shady deals, it borrowed money to leverage those deals. So it has to pay back the borrowed cash as well."

The replenishment money comes, of course, from taxpayers - the same taxpayers who took hits on their houses, 401(k)s, and other investments during the current bust, but can't get reimbursed.

The pension abuse now is breaking the backs of the budgets of many cities and states. The California city of Vallejo went bankrupt after 75 percent of its budget went to police and fire benefits and salaries. California's ongoing budget crisis of the past 10 years - if honest numbers are used, it hasn't balanced a budget since 2000 - is the direct result of outrageous public employee pay and benefits.

*Abuse of power*

Even worse than the extravagant pay is the abuse of power by union-protected government authorities. Greenhut cites the case of teacher Carlos Polanco, who was accused by the Los Angeles Unified School District of "immoral and unprofessional conduct" for making fun, in front of his class, of a student who had just returned after a suicide attempt.

Greenhut: "That's horrifying and a good reason to fire this cruel man, who obviously has little concern for the safety of his students and lacks common decency. The school board voted to fire him, but that's just the first part in the Rube Goldberg-like maze of the firing process in a district that...fires far fewer than 1 teacher per 1,000 a year. No wonder. The union-dominated Commission on Professional Competence overruled the Polanco firing. The commission found technical reasons why it could not rule on the unprofessional behavior accusations - the notice of dismissal wasn't provided by the proper deadline. And then the commission unanimously found that Polanco's behavior was not immoral because `it was not established that Javier was ever suicidal, that he ever intended to harm himself, or that he in fact had ever been hospitalized'."

Then there are the abuses by the guys with guns. Police now commonly are protected from even the most reasonable scrutiny of their activities. Due to state laws and court rulings, Greenhut observes, "I've found that in covering cases of alleged excessive force, or when police are involved in deadly shootings, that it is no longer possible to find out if the officer has a history of abusive or violent behavior.... And even a watered-down bill that would have restored some level of open records to the process was shut down thanks to the unified efforts of Republican and Democratic legislators. Police unions used the most heavy-handed and dishonest tactics to stop the legislation."

He provides a horrifying example: "After Huntington Beach officers Shawn Randell and Read Parker fired 15 shots at Ashley MacDonald in September, killing the distraught teen as she held a pocketknife in a nearly empty city park, I expressed shock in print: You mean two male officers could come up with no better way to subdue a young girl than to shoot her to death? In response, the usual suspects (the police chief, the police union, unthinking defenders of anything that police do) argued that I should not rush to judgment. I should not draw a conclusion before the official investigation, handled by the Sheriff's Department, is completed and the results released, they argued.

"So I went back to an incident in Huntington Beach 2½ years ago in which Steven Hills, a distraught man who, according to police, had called 911 and made threatening statements, was shot by police 29 times and killed. The report of the investigation is done. Plenty of time has passed. Since the HBPD tells me that I shouldn't rush to judgment on the MacDonald case, but wait until the report is complete, I thought it only fair to look at the report about Hills. Well, the police department and the Sheriff's Department won't release that report. It is exempt from the public records act. That's quite a scam: Shut up until the investigation is done, but once it's done, it's none of your business."

*What should be done?*

The ongoing Depression is finally making Americans wonder why they stand in unemployment lines while government workers enjoy lavish pay, perks, and benefits. And cases of brutality are making many wonder why police and prosecutors have been given such excessive powers.

Greenhut calls, first, for outlawing public employee unions: "There is absolutely no public good served by it, especially in a world of civil service protections. In fact, such unionization is a relatively recent phenomenon," dating only to the 1960s.

Would that violate government employees' rights to influence their own government? Hardly - because they are the government. A government union sits on both sides of the negotiating table, representing the employees who get the benefits on one side - and, on the other side, influencing the politicians who use tax money to pay the benefits.

Greenhut ads, "Legislatures should impose tighter restrictions on union political contributions. States should also pass paycheck protection measures that allow union members to withhold dues payments that are used for political purposes."

During the last government-caused Great Depression, the one in the 1930s, citizens revolted against government excesses. It's well past time for another revolt. Plunder! provides the facts, the outrage, and the ammunition.

Get it. Read it. Use it.

Steven Greenhut has identified one of the key problems with our political system - the power of public employee unions to control and manipulate the legislators who are beholden to them.
Usually the unions donate most of the money and provide the foot soldiers for election campaigns - and thereby "own" the legislators.

The legislators in turn give juicy contracts to the union members. This sort of thing was supposed to have gone out of style with corruption and ethics rules, but is alive and well.

Notice that autoworker unions donated over $ 40 million and countless hours of campaigning in three key midwestern states that provided a margin for victory for Barack Obama. Their payback?
Billions of dollars of Federal (ie your and my tax dollars) subsidies supposedly to the automakers - but in reality simply a way to preserve the wages and benefits of the those who had helped him get elected.

Chicago-style politics at its worst.

This insightful book clearly explains why and how California got into the fiscal mess it is mired in. It describes inordinate power of Public Employee unions: their money, organization and aggressiveness and their control over the State Legislature. It is contemporary and specific. Have your blood pressure medication close at hand as you read, because it will incense you (unless you are a member of a public employee union). It may spur also you to action, as it did me.

I had a fairly decent understanding of the ticking fiscal time bomb created by pension obligations to public employees before reading this very informative book. What I didn't know was the shocking scope of the problem and the flagrant greed of the unions at the public's expense. I knew the public employee unions were powerful and had great influence. I was shocked at just how much influence they have and how they use it with total disregard for the public. This book not only deals with the problem at the local and state level but there are some very scary statistics about the scope of the problem for the Federal entitlement programs of Social Security, Medicare and prescription drugs as well. The statistics on the growth of government and the rise in unfunded liabilities for public employee pensions are beyond alarming.

If you wonder why this problem is all the sudden showing up and is so big (e.g. why hasn't this come out before on center stage?#... think Bernard Madoff. He ran his Ponzi scheme for many years without detection, but the financial crisis exposed him when more clients wanted to withdraw money than new investors could be found to contribute in order to cover the withdrawals. This is exactly what is happening with the Public Employee unions as the huge losses the pension funds have recently taken #and not properly recognized# combined with the dramatic raises in pension benefits over the last decade #often awarded retroactively# will have to be picked up by the tax payer. The tax payer is being asked to contribute more money they don't have to cover the lavish pensions. The pension funds such as CALPERS were able to take reckless risks, even borrowing money to invest knowing that if they lost the money #and they did) that the taxpayer would be on the hook. Read the book and find out how much we are on the hook for. It has already grown rapidly since this book was published just a couple of months ago. You won't want to believe it. Like Madoff the financial crisis and resulting losses has caused people to look closer at the problem and we are starting to see an incredible picture of greed and abuse that government officials allowed to happen at all levels. Greenhut's book does a fantastic job of pulling this all together and painting a very clear picture. You will understand the problem completely when you are done.

This should be required reading for anyone who votes. Wait until you see where your tax dollars are actually going and why government is in a desperate situation across the board. A wave of bankruptices at the local government level is the likely outcome if the Unions are not successful in their current effort to pass laws that would keep these bankruptices from happening without their approval. It is scary stuff. Greenhut offers solutions but I am not optimistic the Unions will give up anything given their history until the money is gone and there is nothing to "plunder" any longer.

PLUNDER exposes many things that I found in over 30 years of public school teaching. Teachers, police, firefighters, and other public employees benefit from the myths that they are self-effacing public servants that they are underpaid. When reforms of compensation, termination practices, accountability measures, retirement benefits, or other extraordinary benefits are proposed, the myths are publicized and voters are fooled. When the myths wear thin, Potemkin reforms are proposed and adopted with much fanfare. Quietly and quickly, out of sight of the public, these reforms are gutted and business as usual continues. This was true of the new math in the 60s, behaviorial objectives in the 70s, and the current Race to the Top. One of the most outrageous things I observed in public schools is how little money and how little concern went to and for the children. People don't wake up because education is "free." The only true reform is full school choice.

Let me start by saying that I work with Steve Greenhut over at [...], a non-partisan journalism center in Sacramento, California. He's a good colleague, sure, but he's also a great journalist.

Anyway, Greenhut's a long-time editorial writer and editor who's written a hell of a polemic screed against the public employee unions who all but control state government. Think of the book as a really, but very clearly written and quite readable, op-ed piece. It's quite compelling and full of evidence that's all meticulously sourced.

Of course, it's also a very depressing book. Greenhut makes a good case that the State of California's budget traumas won't end until state employee pensions get a thorough going-over -- an unlikely event, given the power employee unions hold over state officials.

For anyone who wants a detailed and satisfying look at a seldom-report aspect of state government, Greenhut's book is the place to go.

Mr. Greenhut's book detail the same reason Europe PIIGS public debts deficits facing. Remember the baby boomer? if they are born 1946 they are 64 years old this year 2010. So there will be more public employees eligible for pension and retirement benefits in the coming years, if you are 65 wake up early and go to work today spent 8+ hours in the school/office/field in your golden years... will make you $0.00 more than you stay at home/having a good time with your grand children/Golf course/Caribbean cruise/Travel around the world/...

May be some will feel bore at home and choose to work but it doesn't make a lot of sense in general for a lot of people. Most people will stop working and the states need to hire somebody to replace his/her post, paying say 70% of salary of the retiree and now the states budget need to pay 1.7 times salary for 1 person to work, repeat this in couple generations we have the mess in Europe, US and Canada


Those who cries "we don't want socialism" indeed we are already in it at the day public employees form union. They sit in the both sides of negotiation table while the tax payer sitting outside of the room. Buffett once said to stop sinking into a hole the first thing is stop digging. We need to first stop the pension and medicare for life for public employees and facing it out immediately in a scale out manner just learn it from IBM,GE... and use 401K. Let the members plan their retirement themselves. 2. Print more money to subsidize the unfunded current pension fund and cause (huge) inflation at the meantime not increase the tax - this in fact is to even it out for everybody to share the burden of past couple generations irresponsible act. Our national debts is not sustainable and we have to solve it one way or the other - someone gotta pay. Japanese and Chinese probably will not be happy if US going this route, but...

This is an excellent book! It really lays out the Factual details of how the pension promises in California and other states will bankrupt us. Steven thank you for writing an excellent book...

Greenhut's book is right on target. His facts are correct and well researched. He is right that the public employee unions are bankrupting cities, counties, states and even the country.

Retiring on more than $100,000 in pension from a "public servant" job is unconscionable. Few in the private sector even come close to half that.

This book should be required reading for every voter. I highly recommend this well written, well researched, truthful and factual book. It is the real horror story of our time.

This is the book the government worker unions don't want you to read. The average person has no idea how they are destroying this country. Plunder lays it all out in black and white.