Public pensions peddle influence

By Jim Provance

Blade Columbus Bureau Chief

COLUMBUS

Ohio’s five public-pension systems have at their disposal a combined annual budget of more than $2 million to influence those who write laws affecting their bottom line.

But that’s a pittance compared to the power the funds can and have unleashed with keyboard strokes or postage stamps that can send e-mails and newsletters to hundreds of thousands of active members and retirees who, in turn, fire off their own e-mails, letters and phone calls to lawmakers.

State Sen. Jon Husted, a Republican from Kettering, understood that power two years ago when, as speaker of the Ohio House, he threw his support behind a bill to mandate that the retirement systems divest themselves of all investments tied to Iran, accused of arming terrorists, and to war-torn Sudan.

Lawmakers were inundated with e-mail, phone calls and letters after the pension funds, which typically resist linking investments to political winds, complained that forcing them to sell off such investments could hurt the value of the portfolios that help to underwrite members’ benefits.

“The people we’re trying to protect, the troops stationed in Iraq and Afghanistan, don’t have lobbyists working for them,” Husted said. “Public officials look out for them. The only people we get feedback from are the people out there in the pension funds who were being misinformed about our true intentions. It’s one-way communication.”

In the end, a compromise was reached in which the funds agreed to gradually sell off such investments to ease the impact on their portfolios. But Husted predicted that those e-mails and phone calls will prove to be a precursor to what lawmakers will face when it comes to making the even tougher decisions ahead to ensure the long-term viability of the pension funds.

Those proposals include a requirement to work longer to qualify for a pension, reduced benefits and cost-of-living adjustments, and increased contributions from public employers and employees.

A number of associations and nonprofit group s representing retirees affected by the various pension funds have been created to affect legislation and, in some cases, to elect their own representatives to pension boards.

For example, the Police & Fire Retirees of Ohio’s political action committee has so far this year contributed $11,400 to legislative candidates, including $300 to Rep. Todd Book, a Democrat from McDermott, who chairs the Ohio Retirement Oversight Council, and $550 to council member Rep. Lynn Wachtmann, a Napoleon Republican.

The State Teachers Retirement System has a budget of $393,188 for its in-house government relations budget, but there are two associations, the Ohio Retirement Teachers Association and Concerned Ohio Retired Educators Inc., that lobby lawmakers and work to influence the STRS board.

The Public Employees Retirees of Ohio Inc. and School Employee Retirees of Ohio Inc. also work on issues related to their pension funds.

The backlash to the attempt to borrow money from PERS to shore up Ohio’s budget also demonstrated how the funds’ relationship to labor unions can play to their benefit. The Ohio Civil Service Employees Association, for instance, rallied with PERS to prevent the borrowing.

“Obviously, our ability to communicate electronically with active members interested in political issues is important, and pension issues are a top priority…,” said Sue Taylor, president of the Ohio Federation of Teachers. ‘‘It seems to me that, for the public employees of the state of Ohio who are responsible for educating the next generation, the citizens of Ohio would want them to have some degree of security.”

So far this year, a legislative and statewide election year, the federation’s political action committee has contributed more than $30,000 to Democrats who control the governor’s office and the Ohio House, according to reports filed with the secretary of state’s office.

The Ohio Education Association’s fund has contributed more than $97,000, mostly to Democrats, and OSCEA has given nearly $86,000.

Most lobbying is done by the retirement systems’ in-house staffers, who draw salaries and pensions like any other system employee. Their combined annual budget of nearly $2.3 million for “government relations” includes salaries of officers required to register with the state, regardless of how much of their time is spent lobbying.

The funds routinely inform members and retirees of legislative issues that might affect the funds’ bottom lines, which, in turn, might translate into those members contacting their representatives, senators and governor.

“I am not aware of any concerted effect. That doesn’t mean it didn’t occur. We would see our role as getting information out to our members.” said Dan Weiss, executive director of the Ohio Highway Patrol Retirement System. He is the fund’s sole registered lobbyist and his $110,000 annual salary represents the small fund’s only expenditure related to lobbying.

PERS, with assets of $59 billion at the end of 2008, has a “government relations” budget of $1.1 million this year, counting in-house salaries. Five staff members are registered as lobbyists with the Legislative Inspector General’s Office, although spokesman Julie Graham-Price stressed that no pension fund money is used to wine and dine lawmakers or to contribute to their campaigns.

“Back about five years ago, Senate Bill 133 added many restrictions on what could be offered,” she said. “They couldn’t offer a Coke to legislators. .”

Dave Graham, spokesman for the Ohio Police & Fire Pension Fund, said his group pays $80,000 a year to the outside Columbus lobbying firm Government Solutions.

“We’re a $10.5 billion fund,” he said. “That $80,000 covers the entire government relations budget. They are our eyes and ears over at the Statehouse.”