By: Mark Glennon*
Last week, the main political action committee supporting Pat Quinn used by public unions, particularly teachers’ unions, signaled an ugly turning point.
The Illinois Freedom PAC released a piece titled Pay to Play Insiders Reward One of Their Own: Rauner. It blasted Rauner because he had a fundraiser hosted by a former Illinois teachers pension trustee, Jim Bruner, who voted to invest in Rauner’s old firm, GTCR.
Bruner, according to the piece, “along with convicted political fixer Stu Levine voted to give Rauner’s GTCR $50 million in state pension business in 2003.” Levine was also a trustee at the time. You will recall that the unions and Quinn have been claiming Levine clouted the GTCR investment into TRS because Levine was on the payroll of one of GTCR’s portfolio companies.
Well, guess who also voted just like Mr. Levine and Mr. Bruner? All of the teachers’ union representatives on the board of trustees. It was unanimous. In fact, the motion to make that initial $50 million investment was made by Cinda Klickna, President of the Illinois Education Association, and seconded by Sharon Leggett, another IEA official. As pension trustees they are fiduciaries, having a high legal standard of diligence in selecting investments. All part of a pay-to-play scam, are they? Or did they all think investing with crooks is smart? (It’s not.)
One columnist who caught this was Rich Miller, hardly a Rauner fan, who wrote,”This is truly getting ridiculous.”
It’s a turning point not just just because it’s a low in hypocrisy, but because it signaled renewed emphasis on the “vulture capitalism” line against Rauner and his old profession, and because Quinn and his supporters now indeed are ready to say even the ridiculous. That renewed emphasis became more apparent this week. Rauner’s running mate, Paul Vallas, used the vulture capitalism line and Quinn’s people are now going through everything GTCR and Rauner ever invested in, and pinning any wrongdoing on Rauner.
Rauner’s investments even implicate him in the Adrian Petersen stuff! Quinn told us this on Twitter yesterday:
Bruce Rauner, part owner of the Steelers, sidestepped questions about the NFL’s domestic violence scandals.
— Quinn for Illinois (@QuinnForIL) September 18, 2014
But it’s on the investments by GTCR and vulture capitalism where the emphasis has turned. The industry is all about looting companies, layoffs, pay-to-play, outsourcing, etc., we’re told.
Even if that weren’t bunk, the hypocrisy would be brazen. Keep in mind that pensions are the largest source of funding for the private equity industry and the primary beneficiary of the profit it generates. The teachers’ pension is Illinois’ biggest and, like most of the bigger Illinois public pensions, it’s controlled by public unions, which have de facto majority control over their boards of trustees. That’s thanks to a deal struck between Governor Thompson and all Illinois governors since then who bartered union endorsements for pension control. Ultimately, it’s therefore Quinn and the public unions who select those investments, and they are slamming their own investments.
Illinois pensions made a killing off GTCR and similar firms, which is why they still invest in them time after time. William Atwood, who heads the Illinois State Board of Investment, says its investments with GTCR have generated annual returns of 17.2% since 1984. That’s exceptional in the financial world. The particular fund in which the teachers’ pension invested $50 million has done even better than that, with an IRR of 24%, over twice the average return of funds started that year.
Saddest of all, it’s teachers’ unions unions primarily behind the hypocrisy — and deceit. It started in the primary where they funded an anti-Rauner PAC they called the “Republican Fund for Progress and Jobs.” They dropped that after the real GOP demanded they cease and desist. Today, Illinois Freedom PAC is their political messenger of choice for items like that Bruner/Rauner piece. Its Chairperson and Treasurer, Jean Ann Luft, is on the board of the Illinois Education Association.
Many teachers complain about being scapegoated over pension and school problems. I don’t think they have been, but every teacher in Illinois should be held accountable for the hypocrisy, misconduct and extremism of the union leadership they elect.
And I’m directing this to you, my relatives and friends who are Illinois teachers. Start complaining. Act. Throw them out. None of you put up with hypocrisy and deceit like this in your personal lives so don’t accept it in your unions.
All of you who I know are moderates, some Democrat and some Republican, yet you allow leftists like Randi Weingarten, Cinda Klickna, and Karen Lewis to represent you. They fundamentally don’t believe in the economic system you’re supposed to be teaching our kids to function in. They’ve disgraced not just your union but your profession.
Get rid of them. If you can’t, at least stand up and scream your dissent.
*Mark Glennon is founder of WirePoints