Five Million Dollar Man: Shady Chicago Loophole Gives Outrageous Taxpayer-Funded Pension Perks to Union Leader Dennis Gannon, Who Was Rehired by City for One Day (video)
Posted By Vicki McClure Davidson on September 23, 2011
Union leaders in Chicago are reaping outlandish pensions because of shady loophole in law
Former president of the Chicago Federation of Labor Dennis Gannon is reaping millions thanks to the labors of taxpaying Chicago citizens with an annual pension of $158,000 — this is the highest of any retired union leader and is reportedly five times greater than what a typical retired city worker receives in pension.
Gannon stands to receive $5 million in city pension funds during his lifetime — he was rehired in 1994 for one day, then allowed to go on an indefinite leave of absence.
Gannon isn’t the only former union leader who is making a bundle because of the lucrative loophole. Tom Cross, Republican leader of the state House, will be introducing a bill to repeal the 1991 law that allows such windfalls to union leaders. Democrat Senate President Dennis Cullerton agreed the law seems “flawed.” Ya think?
So much for the unions looking out for the “little guy.”
Legalized corruption… It’s the Chicago way. It’s the union way.
For regular folks, the Illinois seasonally adjusted unemployment rate for August increased to 9.9 percent, according to data released last week by the U.S. Bureau of Labor Statistics and IDES. The unemployment rate in the Chicago metropolitan area rose to 10.4 percent in August from 9.7 percent a year earlier.
Fox Chicago: Obama’s Chicago Union Leaders Grab Millions in Tax Payer Funded Pension Loophole
From Chicago Tribune, One-day rehiring nets former Chicago labor leader a $158,000 city pension:
Most city workers spend decades in public service to build up modest pensions. But for former labor leader Dennis Gannon, the keys to securing a public pension were one day on the city payroll and some help from the Daley administration.
And his city pension is more than modest. It’s the highest of any retired union leader: $158,000. That’s roughly five times greater than what the typical retired city worker receives.
In fact, his pension is so high that it exceeds federal limits and required the city pension fund to file special paperwork with the Internal Revenue Service to give it to him.
Gannon’s inflated pension is a prime example of how government officials and labor leaders have manipulated city pension funds at the expense of union workers and taxpayers. Like other labor leaders, he was able to take a long leave from a city job to work for a union and then receive a city pension based on a high union salary.
But in a new twist, a Tribune/WGN-TV investigation has found that Gannon is eligible for the lucrative pension deal only because City Hall rehired the former Streets and Sanitation Department worker for a single day in 1994, then granted him an indefinite leave of absence.
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State law allowed Gannon to retire from the city in 2004, the year he turned 50; since then, he has received about $1 million from his city pension. He stands to collect approximately $5 million during his lifetime, according to an analysis based on the fund’s actuarial assumptions.
Until last year, that pension came on top of Gannon’s union salary, which had grown to more than $240,000. He now draws the pension while working for a hedge fund, Grosvenor Capital Management, that does work with public pensions, including the Teachers Retirement System of Illinois. The firm also was one of Mayor Rahm Emanuel’s largest campaign contributors.
Gannon declined to be interviewed for this story but issued a statement through a spokesman for the Illinois Sports Facilities Authority, where he is a board member.
From Beaufort Observer, The Chicago Way: Union leaders draw hefty pensions from the City:
They have a special way of doing business in Chicago.
Here’s an example: Dennis Gannon used to work for the City of Chicago in the Streets and Sanitation department. He started in 1973 when he was 19 years old. He started at $6.95 per hour operating a steam roller (no, we’re not making this up). For 17 years he worked his way up in Streets and Sanitation. In 1990 he was granted a leave of absence to work with the union. Then in 1993, he resigned from the city job he was on leave from and withdrew his pension contributions.
Now it gets good. On June 20, 1994 Gannon was rehired by Streets and Sanitation. For one day. He then was granted another leave of absence to work for….yep, you guessed it. The union.
With a law passed in 1997 Gannon, et. al. was eligible for credit for time served while on leave. Thus, in 2004 he retired from the City with 33 years of service credited for all the time he was “on leave.” At the time he was making $240,000 a year with the union and also received $130,000 from the Chicago pension fund for his first year of “retirement.” Since then he has collected about $1 million from the pension fund and stands to pull down $5 million if he lives to an average age and more if he lives longer.
Gannon now works for Grosvenor Capital Management which helps manage…you guessed it, the Teacher’s Retirement System of Illinois. That firm was one of the major contributors to Mayor Rahm Emanuel’s campaign.
From MSNBC, Report: Ex-labor chief’s 1-day rehire nets $158,000 city pension:
A retired Chicago labor leader secured a $158,000 public pension — roughly five times greater than what a typical retired public-service worker in the Windy City receives — after being rehired for just one day of active duty on the city payroll, local news reports said.
According to The Chicago Tribune, Dennis Gannon stands to collect approximately $5 million in city pension funds during his lifetime. He now draws the pension while working for a hedge fund, the Tribune reported.
The Republican leader of the state House, Tom Cross, said he will introduce a bill to repeal the 1991 law that allows the windfall. Senate President Dennis Cullerton, a Democrat, agreed the law seems flawed.
Gannon, former president of the Chicago Federation of Labor, was able to take a long leave from a city job to work for a union and then receive a city pension based on a high union salary. That arrangement is allowed under a state law signed by Gov. Jim Thompson on his last day in office in 1991, according to an investigation by the Tribune and WGN-TV.
The change has enabled a couple dozen labor leaders to become potential millionaires.
What is different in Gannon’s case is that he became eligible for the especially lucrative pension deal only because the city rehired the former Streets and Sanitation Department worker for one day in 1994, before granting him an indefinite leave of absence, according to the investigation. He retired from the city job in 2004 at age 50.
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Terrance Stefanski, who oversees Chicago’s municipal pension fund, confirmed to the newspaper that pension laws were followed in Gannon’s case.
“Once the city rehired him and he went on a leave of absence to work for the union, he was eligible under the law,” Stefanski told the Tribune.
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