Guessing Pensions: San Jose's Fuzzy Math

Number 25906
Subject Financial Investigations
Source NBC Bay Area
Year 2012
Publication Date 2/8/12, 2/9/12, 2/10/12, 2/23/12, 8/21/12
Summary This year-long investigation exposes the Mayor of San Jose’s repeated use of an exaggerated pension projection to sell a fiscal emergency to voters and negotiate reform with unions. NBC Bay Area uncovered, for nearly a year Mayor Chuck Reed used $650 million as the future projection for city retirement costs. NBC Bay Area reviewed thousands of internal city emails and public documents and uncovered there was no calculation to back up the number. The figure was used to induce deep concessions from union members. NBC Bay Area followed the paper trail and found numerous instances where the number was used in negotiations and instances where the Mayor quoted that projection in national and local newspapers, magazines, speeches and press releases, touting the exaggerated figure as representative of the city’s dire need for pension reform, to avoid fiscal meltdown. As a result of our investigation, The city’s retirement services director abruptly retired. Mayor Reed stopped using the false projection, and a State audit confirmed what NBC Bay Area uncovered. This is part one of more than a dozen reports, focusing on multiple ethics complaints against Mayor Reed and other city officials, a Securities and Exchange Commission investigation, as well as the developments in the State audit.
Category Contest Entry
Keywords pension projection; Securities and Exchange Commission; Chuck Reed; unions
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