Gagging on the gag order and the pension crisis

Christopher Curran
Posted 4/2/15

This past week at Twin River Casino Event Center, retired state workers cast a vote of approval on the latest proposed pension settlement offer. Those actually voting were a tiny sample of all the …

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Gagging on the gag order and the pension crisis

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This past week at Twin River Casino Event Center, retired state workers cast a vote of approval on the latest proposed pension settlement offer. Those actually voting were a tiny sample of all the state workers involved. Whether this ballot result will be thwarted by a successive vote from a smaller component union group is not commonly known. The last compromise settlement was derailed by one particular police union.

Therein lay the problem. Because Superior Court Judge Sarah Taft-Carter had imposed a gag order, supposedly to insure the integrity of the mediation process, the fourth estate and their readers, the concerned citizens of Rhode Island, are left in the darkness.

Thus, this absence of sunlight leaves us lacking crucial information which would help those directly connected to the pension system make good choices. Also, since the settlement of this issue will strongly affect the taxpayer’s future, all of us should have access to any pertinent information. This situation begs the question of the validity of imposing gag orders in the first place. Simply, are gag orders anti-constitutional?

As a result, many are questioning all aspects of this reform. How did we arrive at this juncture? Could reform have been handled differently? Why was dramatic reform necessary in the first place? Most distressing to pensioners, is the latest compromise the best deal that can be negotiated, and are enough workers’ voices being heard from? Whatever the answer to those questions may be, everyone knows that until the case is settled, the state cannot go forward and start to take steps toward renewal.

Pensioner and citizen alike would benefit from the full light of disclosure. Without it, anxiety and apprehension will continue to rise. All any of us can do is take stock of what we know and press those in authority to learn what we do not.

The saga of pension reform starts with Gina Raimondo’s examination of the Employees’ Retirement System of Rhode Island (ERSRI) in 2010. In that year, a total of 51,325 members consisting of inactive members, retirees and beneficiaries were in ERSRI. This is an astonishing number comparatively to other states, considering the population of Rhode Island is about a million people. The mere ratio depicts the conspicuous potential for an easily overburdened system. After General Treasurer Raimondo assumed her office in January 2011, she discovered that the system was only 48.4 percent funded. A public or private pension scheme is considered reasonably solvent only when it is at least 80 percent funded. Consequently, she produced a comprehensive report in order to convince the legislature and the public how dire the circumstances truly were. This famous, or perhaps infamous, paper was named “Truth in Numbers.”

Raimondo uncovered many unsustainable factors in her research. First, she found that the taxpayer-funded contribution to ERSRI would double in the years 2010 to 2013, from $303 million to $615 million. Second, the Ocean State’s pension costs were set to increase to $1.3 billion by 2028, from $765 million in 2015. Third, employee contributions to the fund were much too low. Fourth, the retirement age qualification was much too early in one’s lifespan. All in all, the system was simply unsustainable. Change was necessary and inevitable.

As a result, General Treasurer Raimondo, in concert with Gov. Linclon Chafee, House Speaker Gordon Fox and Senate President Theresa Paiva-Weed, crafted the Rhode Island Retirement Security Act of 2011. The proposal was overwhelmingly approved in the legislature and was signed into law by Chafee.

Raimondo was lauded countrywide as an adroit magician who fearlessly took on the unions and won. She became a darling of many state and municipal leaders all over the nation who had similar pension funding problems. She became known to key political fundraisers and operatives as someone to watch. Arguably, Gina Raimondo would not have been able to secure the campaign funds for her successful run for governor if she had not been heralded for her pension reform success.

However, to pensioners and future pensioners in the ERSRI, the new law was much more personal. Whether or not the retirement schemes were overly generous, they were promises made to workers that were now reneged upon. One must have empathy for someone who has worked 20, 25 or 30 years toward a goal and now has had the rug pulled out from under them. Certainly, had these workers known their retirement packages would be drastically changed, they would have planned differently for their golden years.

Sadly, politicians were more concerned with union support to get them through the next election cycle. So they recklessly indulged the demands of union representatives whose only goal was to secure as much money and benefits to their members for the least amount of required work possible. Those officials were well aware of the incapability of this retirement system and funding scheme to sustain payments long term. Nevertheless, they forged deals that would eventually lead to a financial state of critical mass and the state budget eventually imploding.

After the imposition of the new law, the unions filed suit against the state for breach of contract. However, there was an essential question to be determined. Were the agreements statutory or contractual? If deemed contractual, the General Assembly could not adjust them by passing a law. If determined statutory, the legislature could change them at will and could change them in the future as needs required.

The issue eventually ended up before Superior Court Judge Sarah Taft Carter. Rather than making a straightforward ruling on the nature of the agreements, the judge decided a jury trial was warranted. Then she added another dimension to the whole dilemma by imposing a gag order. By doing so, she excluded the public from absolutely essential information on a matter that will affect all our lives for years to come. Since openness is the very basis for any free society, this gag order is counterintuitive to that standard.

One could make an argument for the imposition of a gag order in a high profile criminal case where the jury is not sequestered. The possibility of a juror’s opinion being tainted by sensational press stories is too dangerous not to impose a gag order. However, this is not the case with civil matters, and certainly not with this pension case, which affects so many.

The lack of sunlight concerning the goings-on in the pension negotiation compromise has confounded the press. No one is sure if component union groups will stymie the approval of the latest compromise proposal. That is what happened last year in a past incarnation of a compromise agreement. Members who have not continued to pay a $6 monthly union fee cannot even vote on the current compromise. Those members who neglect to show up after receiving an email do not get an opportunity to vote. As we all are aware, some people do not regularly check their email accounts. Apparently, no formal letter was sent by mail to members in this crucial situation.

There is an obvious lack of transparency evident in this process, and it is due to the gag order. Press access would have informed the public much more fully. Understandably, by law, to impose the gag order has been established by precedent to be constitutional. However, to institute the order in this circumstance is adverse to the spirit of the First Amendment, thus the imposition of this gag order is truly anti-constitutional.

All in all, the unfortunate status of the state pension system is due to a mixture of over-demanding union representatives and neglectful, opportunistic politicians. The workers, who paid their dues and made weekly contributions and expected a certain degree of comfort in their retirement, are being short-changed. It is inevitable and unavoidable. There simply is not enough money to fulfill the original promises. Rhode Islanders already bear the burden of being one of the highest taxed states in our nation. The public cannot endure any more escalation of taxes in order to make up the pension deficits.

The reform law that passed four years ago saves the state $4 billion dollars over 20 years. The most recent modifications suggested as a compromise might be as fair as can be offered.

We need to put this matter behind us as a state and as a community in the fairest way possible. To do so requires full knowledge of the process and the shining sunlight of complete information. No settlement reached in the darkness of limited truth can be truly fair and equitable. Judge Carter, please remove the gag order.

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