Skip to comments.Daley Pension Debacle: Where Did $54 Million Go?
Posted on 12/07/2018 11:27:47 AM PST by PBRCat
If there ever was any hope that five Chicago city workers pension funds would make any money by investing $68 million with then-Mayor Richard M. Daleys nephew and one of his key political supporters, it didnt last long. Only months after the deals were made a dozen years ago, problems began to emerge.
The nephew, Robert G. Vanecko, and his partner Allison S. Davis, a developer who gave campaign money to Daley and was appointed by the mayor to the Chicago Plan Commission, started investing in a series of property deals that, by the time the last of them are unwound by the end of December, will have cost the city workers pension funds 80 percent of the $68 million they put in $54 million in all.
Vanecko and Davis set up a company, DV Urban Realty Partners, and bought an apartment building that was riddled with code violations.
They invested in a vacant building that housed the Chicago Defender, even as City Hall inspectors threatened to tear it down unless repairs were made.
They put city employees pension money into an old warehouse so poisoned with arsenic and lead that the pension funds had to help pay $2.6 million for cleanup just to be able to unload it at a huge loss.
They lent millions of dollars to developers who personally guaranteed to repay the money but never did, costing the pension funds more than $5.6 million.
DV Urban broke a contract to buy a building in the South Loop, a decision that cost the pension funds another $4 million.
And somehow they lost more than $11 million on the deal that built a busy Marianos supermarket in the North Side neighborhood of East Lake View, a location that has 90,000 people living within a one-mile radius.
(Excerpt) Read more at chicago.suntimes.com ...
They would have made more money if they had invested their money with Donald Trump. LOL
This is reported as about “a dozen years ago” in the article. For the last thirty years, such risky investments of union or public employee money was considered clearly criminal in most of the county.
I know. I sat as an employer side trustee on a union pension fund.
It was clearly stated by the legal counsel to the fund that the entire method of managing these funds was set up to make the fund as safely growing as possible and thereby also protect trustees as well as beneficiaries. This was in a town where mob connections to such funds and unions in the past was well known and documented as previously abused.
For this to occur, the judicial and political fix was in place. It was intentional allowed theft at the expense of the public and the out-state taxpayers who the burden would fall back on in case of near default. The down-state Illinois farmers and small earners paid the tab for the Chicago Combine criminal behavior for the last hundred years due to Democrats and crooked Republicans.
In the case of the fund I helped manage, it had four different investment method goals. Then they paid a separate Trust Lawyer to audit the four firms behavior in managing each fourth for a five year stint. After five years competing proposals would be examined, vetted and analyzed. Every individual pension earner would have his start of payments discussed, examined and voted on by all Trustees. His documentation for eligibility preserved by the funds legal team, not the union, was examined first hand prior to a vote.
One fourth was in equities with blue chip value. Another fourth was in mid-cap contrarian equities in hopes of preserving value in a market turn. A third fourth was in T-bills and vehicles with that level of security. The last fourth was in Industrial and Corporate Bonds with very high levels of rating levels required. The funds were pitted in documentation against each other with the goal not being overall percent, but adherence to the requirements for each brackets performance goal outlines. If a fund owned an investment that was underperforming and at anytime was found to be more than 2.5% of that quarter of the fund, the investment manager was heavily pounded to get back in line with requirements even for good performing investment that grew to pass that limit as protection against any other investment that might have a loss.
For this to occur in a city as sophisticated legally and financially as Chicago was willful theft
Well, somebody has to pay for the Escalades and condos in Kauai for the Democrat bosses, and it aint gonna be the Democrat bosses.
Democrats. They do no wrong. Nothing to see here, move along.
Just raise taxes. Much less risk and much faster.
Leo Bloom: You raised $2,000 more than you needed to produce your last play.
Max Bialystock: So what? What did it get me? *I’m wearing a CARDBOARD BELT*!
Leo Bloom: Well, that’s where you made your mistake: you didn’t go all the way. You see, if you were a truly bold criminal, you could’ve raised a million.
Max Bialystock: But the play cost me only $60,000 to produce!
Leo Bloom: And how long did it run?
Max Bialystock: One night.
Leo Bloom: You see? You see what I’m trying to tell you? You could’ve raise a million dollars, put on your $60 thousand flop, and kept the rest.
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