After Colorado's State Treasurer Walker Stapleton was arrested for driving under the influence, his honesty and integrity were called into question. In this article, I examine the circumstances of Treasurer Stapleton's DUI arrest and ask if a pattern of personal failings relating to "honesty and integrity" have spilled over into his participation in the Colorado PERA pension reform debate.
Reform of the Colorado PERA pension system is one of our Treasurer's favorite political topics. Perhaps, similar to Rhode Island's State Treasurer, Stapleton believes that public pension contract breach is the route to higher political office (not working out as planned for Treasurer Gina Raimondo in Rhode Island.) Or, given the decline of defined benefit pension plans in the private sector, perhaps our State Treasurer hopes to exploit "PERA pension envy" for personal political gain. Whatever his motives, or political goals, I encourage our Treasurer to engage in a fair, open and fully-informed discussion of pension reform options for the Colorado PERA system . . . to participate in the PERA reform debate with "honesty and integrity." I also encourage him to advocate prospective PERA pension reforms in conformance with the Contract Clause of the Colorado Constitution, similar to prospective reforms made available to Colorado county governments in SB12-149.
In this article, I examine published materials germane to the "honesty and integrity" of our State Treasurer, and consider whether a recent article written by Treasurer Stapleton regarding Colorado education finance and public pension obligations does not again call into question our Treasurer's forthrightness.
The Colorado PERA pension system has significant unfunded pension liabilities. These liabilities have accumulated due to the failure of the Colorado Legislature to pay its full pension bill for the last decade. Colorado PERA pension liabilities are a contractual obligation of Colorado PERA-affiliated employers, a legal debt obligation of Colorado state and local governments. Our State Treasurer should not ignore the fact that the decline in the funded ratio of the Colorado PERA pension system is the result of the failure of the Colorado Legislature to pay its pension bills for a decade.
Colorado's Treasurer Stapleton has expressed concern regarding Colorado PERA's unfunded liabilities, but why is our State Treasurer so concerned about this one particular form of Colorado state and local government debt, public pension debt? Why do we not see our State Treasurer concerned about all other Colorado governmental debt, all outstanding bonds issued by Colorado state and local governments? What is so special about our public pension debt obligations?
Why do we see our State Treasurer focus on Colorado's public pension debt obligations that will come due over the next 70 years? Why does he leave the impression that PERA unfunded liabilities due over the next 70 years are somehow due immediately? A current financial "crisis," a "shortfall"? Why have we never heard our Treasurer note that Colorado's financial support for public pension obligations consumes less than three percent of all Colorado state and local governmental expenditures? A level far below the national average for the states? Does this key information not comport with his political agenda? Would it not be more "honest" for our State Treasurer to acknowledge this fact?
Why does our State Treasurer see the PERA pension debt service that will be paid by Colorado taxpayers in coming decades as onerous, yet he lacks any corresponding concern for the "burden" of all other Colorado state and local government debt (bonds) on taxpayers that will come due over the next 70 years?
Colorado has not "banked" the three percent of future state and local governmental expenditures that will be required to support future Colorado PERA pension obligations and that is a "crisis" in the mind of our State Treasurer. Yet, Colorado has not banked the 97 percent of state and local governmental expenditures that will be required to support all other public sector programs for the next 70 years and that IS NOT a "crisis" in the mind of our Treasurer. We see our State Treasurer ranting about Colorado PERA public pension debt in particular because this serves a political agenda.
WHAT DO THE CIRCUMSTANCES OF COLORADO TREASURER WALKER STAPLETON'S DUI ARREST TELL US ABOUT HIS "HONESTY AND INTEGRITY"?
Ellen Dumm writes in a Huffington Post article:
"Colorado's treasurer accounts for $20 billion and manages a $6 billion investment pool of public funds annually. Integrity, responsibility and good decision making are critical to this job. So are honesty and transparency." It is important that the person serving as Colorado's Treasurer act with integrity, and honesty.
Here are a few excerpts from her Huffington Post article:
"In June 1999, GOP candidate state Treasurer Walker Stapleton was charged with DUI and leaving the scene of the accident in San Francisco where two women were injured."
"He blamed the victims. (The reality is that he accepted a plea bargain down to a DUI, with three-year probation, twice weekly AA meetings and court-ordered community work.)"
"That charge was amended several days later, to charges of running a flashing light and hitting a cab in the intersection, causing injuries and leaving the scene."
"One of the victims, Ginger Vasquez of Santa Monica, CA, was alone in the backseat of the cab that was hit by Stapleton. She describes the vehicle spinning after the impact and seeing Stapleton's car driving away."
"After Stapleton's car stopped down a steep hill, she says, two cabs boxed in his vehicle to prevent him driving any farther. She has never talked to Stapleton and did not know his name until recently. She does not know the other woman injured in the accident. Stapleton never approached the cab to find out if everyone was all right. Most importantly, she has no motive to lie about events that night."
"Stapleton, who has an obvious motive not to tell the whole truth, continues to shift the blame and will not produce police reports (unavailable to the public) of the accident."
(My comment: Have complete police reports relating to the incident been released by our State Treasurer?)
"Ironically, Stapleton was born into one of the country's wealthiest, best-connected families, sharing a family tree with the Bushes. He attended prep school in Connecticut and expensive colleges and universities. The truth is that Stapleton has never had to find a real job outside his wealthy family's umbrella."
Link to Huffington Post article:
"Stapleton smelled of alcohol as he allegedly walked away from the scene of an accident in San Francisco, making 'loud and belligerent' noises and ignoring officers, writes The Denver Post . . ."
"After his arrest, Stapleton pleaded guilty to drunken-driving after a taxi hit his Jeep Cherokee, damaging it, and forcing him to pull over a block away–which Stapleton disputes. The report claims he continued to drive away even after police attempted to stop him with lights and sirens, and that he only stopped after his Jeep could no longer continue. He was sentenced to community service. The Colorado Independent is critical of the Post's article, saying it fails to answer some questions, such as, 'Was anyone hurt in the accident?' Court documents examined by the Independent list two victims, but the Post, citing California police, writes that 'no pedestrians' were injured in the collision."
From the Denver Post:
"Stapleton, now 36, was arrested in the early hours of June 20, 1999, in San Francisco on complaints of driving under the influence and hit-and-run. He later pleaded guilty only to drunken driving, for which he was sentenced to community service."
"When police arrived, they asked if he had been drinking, and he admitted he had, prompting officers to arrest him, Stapleton said."
"According to the report, witnesses said that after the two vehicles collided at the intersection of Bush and Jones streets, Stapleton continued to drive away. Police caught up with his Jeep down the street."
"'We then attempted to stop the vehicle with lights and siren,' the report said. The car 'then failed to pull over and continued southbound on Jones St. (The Jeep) having been damaged by the collision, could no longer continue and came to rest.'"
"A strong odor of alcohol beverage could be detected emanating from Stapleton's breath and clothing. He spontaneously stated, 'I had the yellow light, he ran the light.'"
"'He was unsteady on his feet, and loud and belligerent.'"
The records indicate that a plea of no contest was entered. Walker Stapleton placed his initials after the following on the Superior Court of California, County of San Francisco, "Waiver of Rights/Plea Form":
"Charges: I understand that I am accused of violating Vehicle Code section 2352(a), driving under the influence (DUI) of an alcoholic beverage and/or drugs."
"No Contest Plea: I understand that if I plead no contest, the Court will make a finding that I am guilty and the effect in this case is the same as a guilty plea."
"Probation Revocation: I understand that if I violate any of the terms or conditions of probation or conditional release (see 22a-o below), a Judge after a hearing but without a jury trial, may revoke my probation or conditional release and order me to serve out my suspended sentence in jail."
"Costs of Restitution and Public Agency Response: I understand that in addition to the fine imposed, I may also be ordered to make restitution to the victim(s), if any, and to pay the expenses incurred by a public agency that responded to any incident caused by my vehicle at the time of my arrest."
"Jail: I understand that the maximum penalty for a first offense is 6 months in the county jail, a mandatory minimum sentence of 96 hours, a fine of $1,000 plus penalty assessments, and suspension of my driving privilege for 6 months. I understand that if I plead guilty (or no contest), 1 year in the county jail will be suspended, . . ."
"Probation: I will be placed on FORMAL SUPERVISED PROBATION for 3 years and I will have to pay probation costs of up to $40 per month. These probation costs are not a condition of my probation, but failure to pay may result in my civil liability. My probation has the following initialed terms and conditions:"
"I must obey all laws."
"2 AA mtgs./week progress rept. 6 months"
Link to Colorado Treasurer Walker Stapleton's court records:
From the Denver Post:
“They asked if I’d been drinking, and I said I had been drinking,” Stapleton said, adding he was charged with a DUI and a hit-and-run charge.
"The hit-and-run charge was dropped later after he explained how the accident occurred, Stapleton said. He was sentenced to community service, which included 'a fantastic period of time that involved me cleaning up garbage in the Tenderloin district of San Francisco' and working at a nursing home."
"Most of you know that he comes from a rich and powerful Colorado family (hence, the old Stapleton Airport, etc), and that he used millions from his family trust to buy a whole bunch of premium land and had expensive properties developed. That allowed him to call himself a 'developer/businessman' instead of a trust-fund baby."
"But, I’ll bet none of you knew, until the Denver Post printed it today, that Walker Stapleton has a third job: that of Gentleman Farmer. Yes, in Colorado alone, Farmer Stapleton owns 180 acres of primo real estate near Castle Rock, worth millions right now, which will be worth tons more, after he’s done speculating and decides to actually develop it. No, no crops are actually grown on the land. A cow or two were most certainly plopped down on the fenced property to eat the weeds for a day or two and were then removed, never to return."
"But the 'rent-a-cow' thingy was enough to allow Walker Stapleton to have this pre-development acreage classified as 'agricultural', and so he paid exactly $116 in property taxes last year."
"Add the $336 million lost to Gentleman Farmers last year, to the $300 million we needlessly donated to the obscenely rich oil companies, to the $300+ million in welfare checks for the equally rich mega-agricorps, to the $8.8 million un-earned bonus to Wal-Mart, (the world's largest retailer) and then you can plainly see why we have a $1 billion budget shortfall (in 2011.)"
(My comment: The State of Colorado can afford to lose millions in tax revenues to "Gentlemen Farmers," but cannot afford to honor state contracts?)
TREASURER STAPLETON'S MOST RECENT COLORADO PERA PENSION RANT.
So, what is the connection between Colorado Treasurer Walker Stapleton's DUI arrest and his latest rant regarding the Colorado PERA pension system? In my opinion, Treasurer Stapleton's personal failings relating to "honesty and integrity" are spilling over into the Colorado PERA pension reform debate.
Now that we have increased our knowledge of Colorado Treasurer Walker Stapleton, we'll examine his recent article addressing Colorado education funding and the underfunding of the Colorado PERA pension system. The May 30, 2013 issue of the Colorado Springs Gazette Telegraph includes an article written by Colorado Treasurer Walker Stapleton addressing the Colorado education finance measure on the Fall 2013 ballot.
Here is a link to the article, a few excerpts and my comments:
Treasurer Walker Stapleton:
"This November, Colorado will be given the opportunity to vote for a more than $1 billion tax increase to fund Colorado education."
"But, as voters take a closer look, this tax increase, masked as education funding, is also another mechanism to keep our sinking public pension system afloat."
(My comment: Colorado's PERA public pension debt is independent of public school finance in the state. This debt of Colorado state and local governments would remain even if Colorado's K-12 education system were completely privatized, or eliminated for that matter. Also, Colorado PERA-affiliated employers hire workers in hundreds of professions other than teaching.
It is not entirely "honest" of our Treasurer to refer to the PERA pension system as "sinking" in light of recent double digit portfolio returns [to be augmented by a report of yet another double digit return in the coming weeks]. Further, our Treasurer had an opportunity here to note that the Colorado Legislature's historical failure to pay its pension bills has caused the financial pressure on PERA's trust funds. By fully disclosing this information in his article our Treasurer could act with "integrity.")
Treasurer Walker Stapleton:
"While PERA is currently $20 billion underfunded, its debt grows every year it does not achieve an 8 percent return on its portfolio. This 8 percent return is not an inflated conclusion simply contested along partisan lines."
(My comment: Here our Treasurer fails to note that the average return assumption for private sector defined benefit plans in the U.S now exceeds 8 percent. Good enough for the private sector, not good enough for the public sector?
Also, Stapleton, in his article, does not mention the fact that many private sector employers make 401K contributions on behalf of their workers, in addition to Social Security. He makes no mention of the fact that Colorado PERA members are not eligible to participate in the Social Security system, and thus rely entirely on their contracted PERA pension benefits for retirement security. By omitting this information our State Treasurer is not acting with complete "honesty.")
Treasurer Walker Stapleton:
"We cannot allow more taxpayer money to be taken out of our children's classrooms in order to backfill obligations in a bankrupt retirement system."
(My comment: Here our Colorado Treasurer presents a "false choice," again displaying a lack of integrity. When the State of Colorado or Colorado local governments pay their debts, when these governments meet their contractual obligations, they are not "taking money out of children's classrooms" anymore than they are taking money out of law enforcement or road construction. When Colorado state and local governments meet the debt service on their bonds are they "taking money out of classrooms"? Stapleton presents an emotional appeal with the intent to deceive the reader.
Colorado PERA-affiliated employers are contractually obligated to pay deferred compensation to Colorado PERA retirees for work completed over the course of their careers. Rather than encouraging the Colorado Legislature to actually meet its Colorado PERA pension obligations by paying the full actuarially required contribution [ARC] our Treasurer assumes, in his article, that these obligations will be met by taking money from public school budgets, a false choice. Here we have the Washington Post condemning such tactics:
“It’s time to retire the false choice. As a rhetorical device, particularly as a political rhetorical device, the false choice has outlived its usefulness, if it ever had any. The phrase has become a trite substitute for serious thinking. It serves too often to obscure rather than to explain.”
Also, Walker Stapleton, as State Treasurer, should know that state governments are not eligible to file for "bankruptcy" under federal law.)
Treasurer Walker Stapleton:
"When I explained the funding shortfall to different stakeholders and legislators crafting this bill they told me that PERA was off the table."
(My comment: Here our Treasurer again laments the underfunding of the Colorado PERA pension system. Complete honesty demands that he inform the reader that the Colorado General Assembly is the author of this "shortfall."
Our State Treasurer refers to Colorado PERA unfunded liabilities as a "shortfall." Yet, these Colorado PERA unfunded liabilities will come due over the next seven decades, consuming approximately three percent of total Colorado state and local government financial resources. How is it that our Treasurer sees the failure of Colorado state and local governments to set aside an amount equivalent to three percent of their future revenues as a "shortfall," a pressing financial matter for Colorado PERA, but the failure of Colorado state and local governments to set aside an amount equal to 97 percent of their future revenues to meet all other future Colorado public expenditures is inconsequential, not a "shortfall"? Is it simply politically convenient for our State Treasurer to label certain revenues needed in the future, for a public program he does not support a "shortfall," while the remaining revenue needed for all other future state and local government expenditures is not a "shortfall"? If so, again this is not being "honest" with the reader.
In his Gazette Telegraph article, it appears that our State Treasurer intends to deceive the reader, withhold information critical to the debate from the reader to advance a political agenda (elimination of public defined benefit pension plans in the United States, see ALEC), and he presents a false choice to the reader. As Ellen Dumm wrote in the Huffington Post, it is important that the person serving as Colorado's Treasurer act with integrity, and honesty.
Colorado PERA active and retired members, many Colorado legislators supported the breach of Colorado PERA pension contracts in 2010 out of ignorance. Many state legislators did not have sufficient information to make an informed decision regarding SB10-001 in 2010, because Legislative Leadership at the time did not want them to have complete information. As with our State Treasurer's recent PERA article, Legislative Leadership intended that members be deceived and accordingly served up uninformed legislators to a pack of 27 lobbyists promoting Colorado PERA pension contract breach.
Leadership could have appointed an interim study committee to ensure that the members had complete information regarding Colorado contractual public pension rights. Legislative Leadership could have sent an interrogatory to the Colorado Supreme Court, but instead opted to squander millions of taxpayer dollars on protracted litigation. Do your part to support public pension contractual rights in Colorado, contribute at saveperacola.com, and "Friend" Save Pera Cola on Facebook.