Monday, March 28, 2011

Former Boston Archdiocescan Chancellor David Smith Asks Attorney General and Secretary of State to Investigate, Pension Victims' Abuse Group Forming

Earlier today, former Boston Chancellor David Smith (2001-2006) asked Attorney General Martha Coakley, Secretary of State Bill Galvin and the IRS to investigate the Archdiocescan pension plan.

Terry Donilon's personality is starting to shine:

Terrence C. Donilon, a spokesman for the archdiocese, reacted angrily to Smith's criticisms.

"It's outrageous -- when David Smith was chancellor, we were running annual deficits and we are now running a balanced budget,'' Donilon said. "If he wants to get into a give and take about his performance as chancellor, which included serving as a trustee of the plan, I'm sure a lot of people would like to do that. But we have prepared a good plan to address the lay pension plan for the future."

Lots of expertise in modeling Christ at 66 Brooks Drive.

I hope this didn't lure these humble and repentant men away from planning ceremonial lamentations and washing of the feet to circulate nastygrams.

A balanced budget?

Who do they think they're working for, Congress?

Let's cut to the chase: When Smith handed it over, the pension was more than fully funded:

The church's pension plan, which was more than fully funded in 2007

They have a good plan.

Here it is:

They're paying 10 Chancery cronies 3 million dollars and 'balancing the budget' by ripping off employees of their pensions. Employees who spent years taking low salaries because they wanted to serve Christ's Church and His people.

Do they think this is something to crow about?

Nobody is impressed that the growing circle of friends of Jack Connors making 300,000
+ is "balancing the budget" by robbing people of their pensions.

The Globe repeated the independent advice they got from a pension specialist who said it's a terrible idea unless hospice is at your house and you're dying:

The move is intended to allow the church to reduce its liability and wind down the fund earlier. But a pension specialist interviewed by the Globe last year said the deal is a bad one for employees, unless they have been diagnosed with a terminal illness and know they won't be around to accept the monthly payments when they retire.

There's evidently some virtue in deceiving people so they can voluntarily screw employees out of their pension rather than mandating it:

Donilon said the lump sum offer was voluntary.

"The options were presented to people, and it's been done with a good deal of thought and professional input, and with the sole purpose of serving the beneficiaries to the best of our abilities," he said.

There was a good deal of "thought" and professional input all right.

When they told the employees to grab their money and run - because the faster the wizards spend it, the greater the likelihood of bankrupting the pension - they "thought" more people would take the money if they forgot to tell them their pension plan was guaranteed.

Here's the devastating statement from David Smith.

I am here today because almost 10,000 people, most of whom worked for years at low wages in service to the Catholic Church in Boston, have their retirement pensions endangered by a reckless attempt by the Archdiocese to shirk their financial commitments by changing the previous “defined benefit” plan with guaranteed benefits to a “take your share of whatever happens to be left” offering. Conflicted trustees are doing this through coercion and deceit, and by withholding information needed to evaluate their offer.....

Curiously, absent from their presentations on funded status is any reference to the obligations of the Trustees to invoice the participating institutions as needed to meet Plan liabilities, the liquidity of many of the participating employers or the obligation of these employers to fund the Plan as directed by the Trustees. For example, paragraph 19.3 of the pension plan says:

“Each employer shall periodically make contributions which … are sufficient on an actuarial basis approved by the plan’s actuary to fund the costs of the plan arising with respect to the participants…”...

In summary we have:

Shifting of funds set aside for by one corporation to benefit another
Conflicts of interest
Selective offers
Breach of promise to fund liabilities of closed parishes
Material non-disclosure
10,000 or so victims of pension abuse
The tax status of the beneficiaries at risk

The Secretary of the Commonwealth and/or the Attorney General share responsibility to address these breaches of public trust and to protect the best interests of these citizens of the Commonwealth. I urge them to take control of this plan away from those with conflicts of interest who have broken the trust of the beneficiaries and have acted wrongly, and to appoint an independent trustee to correct this situation and protect the 10,000 people at risk.

Please read Smith's statement in its entirety.

I'm sure the diocese was hoping to quickly settle with the Daughters of St. Paul so that their financial records would never be on the receiving end of a subpoena for discovery.

In this morning's post, I spoke about Cardinal O'Malley timing his letter gushing about Chancellor Jim McDonough to send the message he was setting his face like flint.

That letter may actually turn out to be a very embarrassing indictment of Cardinal O'Malley and his administration.

Smith also said he plans to meet today with a group he has provocatively dubbed "Boston Pension Abuse Victims.'

Like all people who abuse power and the people they are entrusted, they're full steam ahead on the road to their destruction. Sadly, they don't even know it.

Bon Voyage gentlemen.

Don't miss the excellent coverage of this story at BCI.

1 comment:

JBQ said...

It continues to appear that the Boston Archdiocese is in deep financial trouble. They appear to need the money in their trust from the Daughters of St. Paul. The entire cause is the sex abuse scandal. Cardinal O'Malley doesn't "appear to have a clue" on how to handle it. If John Geoghan wasn't murdered in prison and a technicality didn't throw out lawsuits, just think how even worse it would be.