[Mid-October 2005 special pension issue of Substance, Page One] By Theresa D. Daniels

The centerpiece of Chicago Teachers Union (CTU) President Marilyn Stewart’s propaganda for keeping her caucus, the UPC (United Progressive Caucus), in power is what more and more teachers are calling “ the Big Lie” that her administration spins about the danger of the Chicago teachers pension fund merging with the Illinois teachers’ pension fund, a less solvent fund.

Union chiefs are using this version of history to promote their endorsed UPC candidates for the upcoming pension fund election. They imply that the other candidates — and former President Lynch’s PACT caucus — are in favor of a merger. It is a fact of history that they are not, as a review of the history and interviews show. It is also a fact of history that in 1990 it was the UPC union leadership which allowed a raid of the Chicago teachers pension fund. At that time, property taxes for three years went to the Board of Education instead of the pension fund. This amounted to a gift to the city and not a loan (as the money was never repaid). In 1993, the UPC leadership again considered a similar deal, but they said that the money would have to be repaid and with interest. This plan fell through only because the Republican senate refused to change a law that would have made this plan possible.

This same UPC now wants to have complete power over the pension fund again. They want union members to vote for their “endorsed” candidates while ignoring their record. Attempting to create panic among teachers with mailing after mailing which say that their opponents want to merge these pension funds, the UPC and its cohorts have spent with each mailing roughly $40,000 of union dues or pension fund money.

The first such letter, called by many “The Big Lie” letter, was dated November 13, 2003. It was issued by UPC pension trustees, who then controlled the presidency of the fund. Many other trustees were unaware of the scare-tactic wording of this letter until after it was mailed.

They mailed this letter to all active teachers’ homes, for their own political purposes, just as union members were to vote on the second contract proposed by the Deborah Lynch administration. The Union sued those trustees for not doing their fiduciary responsibility and for wasting money. Regarding this matter, Lynch said: “It was the UPC trustees trying to interfere in our Union’s collective bargaining process which the UPC tried to undermine at every step of the way.”

The court suit was withdrawn when the pension board trustees met on November 18, 2003, and voted to retract the letter.

The Lynch administration responded immediately against any merger. On March 6, 2003, the Board of Education “floated a proposal” (the Board’s words) for the pensions to merge. According to Lynch, she convened the CTU Pension Insurance Committee, which unanimously adopted a motion to recommend to the CTU Executive Board and to the House of Delegates opposition to any merger. The CTU Political-Legislative Committee did the same. Lynch contacted the Board of Education to express strong opposition to any such plan. The Board backed off and said it wasn’t interested in a merger, but only in additional funding. At the April, 2003, House of Delegates meeting, the House approved both motions in opposition to the merger. Legislative Lobbyist Jackie Gallagher was put on the alert in case the Board brought the matter to Springfield anyway. From the first discussion of merger, Lynch covered all bases on the issue and demonstrated opposition to any merger.

More than two years later, the UPC leaders and UPC members keep repeating the lie that Lynch’s PACT caucus (Pro-Active Chicago Teachers and other School Employees) want this pension merger. They also claims that a line in the contract allows for this merger , even though they know that the opposite is true. They were there, and on the Board of Trustees, when these events took place.

Maria Rodriguez, a UPC member, was president of the Board of Trustees at the time of the 2003 events. Rodriguez is now running for re-election as trustee. She continues to promote the merger myth. Ironically, when she first ran for the office, she was supported by Lou Pyster (then CTUDirector of Research and staff liaison to the Pension Fund) in a democratic move to have all caucuses represented fully. Pyster’s recommendation led to PACT support for Rodriguez the first time she ran.

Rodriguez is now working full-time for the Union as a field representative with salary and perks undisclosed. Despite a vote of the House of Delegates, the UPC leadership has refused to honor their promise of financial “transparency” refusing to publish the value of the contracts of the CTU staff. The UPC clearly doesn’t want the union’s members knowing how much the officers and staff are paid. In early October, the union lawyers demanded that any information about salary and benefits for union employees that comes out as part of a lawsuit filed by former union staff members be kept under a “Protective Order.” In letters to the plaintiffs, CTU attorneys said that they wanted the protective order so that the information won’t be published in Substance. (The case — “Schmidt et al v. Chicago Teachers Union” — is presently in Cook County Circuit Court. Documents in the case become public record, which is what union attorneys want to avoid with the protective order).

A question asked by delegates is why information about the pay and benefits of union staff hasn’t been published in the Chicago Union Teacher. The House of Delegates voted in December 2004 that all union hiring over $100,000 be reported to the House. The total value of the pay and benefits of every union field rep and every other staff person hired since Marilyn Stewart took office in August 2004 is greater than $100,000 per year.

How is this relevant to the pension fund election? In the past, the policy was that if you were a staff person, you didn’t run for teacher trustee again. Two other trustees — Linda Porter, Union treasurer, and Connee Fitch-Blank, Quest Center — are also both Union employees and “teacher” trustees. In 2001, Nate Dickson had been serving as a trustee while teaching at Dunbar Vocational High School. Dickson became a CTU field rep, and he resigned from the pension board. Today, Porter, Fitch-Blanks, and Rodriguez all work for the CTU and are all “teacher” trustees.

Critics note that two other UPC-endorsed candidates — Lois Nelson and Mary Hanson — have no experience. According to Union committee members, they have not served on the Pension Insurance Committee. Campaign literature claims they have been “watchdogs,” but they have only attended one pension fund meeting, according to members. John O’Brill, also a UPC member, was active in committees during the Lynch administration and before.

“Insidious personal attacks on incumbent trustees are political attacks,” Deborah Lynch told Substance. “The incumbents Finnegan, Murphy, and Knazze should be re-elected. It’s unfortunate that the UPC leaders care more about putting their hacks into those positions over experienced trustees. These hacks had never attended a CTU Pension Insurance Committee activity.”

In the union newspaper — now under UPC control — “the dissidents,” are being lumped together in the UPC effort to keep the union’s members scared and confused until after the October 28 vote. UPC tries to imply that PACT is behind the initiative for teachers to join the Illinois Education Association (IEA). In reality, the IEA is being promoted by CEEC (Chicago Educational Employees Caucus), another caucus.

“President Stewart said some of the individuals supporting candidates other than those endorsed by the CTU have advocated merger of the two funds in the past,” the union newspaper reports in a front page article in its October issue. “She said some of those supporters also are among the dissidents seeking to affiliate with the IEA.” [Empasis added]. The Stewart quote (“some of...” “some of...”) avoids clarity, but does its slanderous job. For the record, leaders of PACT and the four canididates have all told Substance that they oppose the disaffiliation from the CTU. Lies about merging the funds

On January 15, 2004, Patricia Knazze became president of the pension fund. On February 27, 2004, the Pension Board met to discuss the health care rebate issue to raise the cap to $65 million so that retirees could have a 70 percent rebate on their medical insurance.

The Board of Education had agreed to support HB 1269 for the cap increase if amendment 1174, which said the State of Illinois would provide funding for the pension fund, were also supported. It was agreed that if the State didn’t come up with enough money to keep the fund funded at 90 percent, the Board would have to make up the difference. The Board is now doing so.

Written in the minutes for this Pension Fund meeting was what was agreed to by our trustees: “Nothing in this act shall be constructed, interpreted, or otherwise viewed to imply any authorization, and/or desire, and/or an intent, to merge or in any other way to combine the Public School Teachers’ Pension Retirement Fund of Chicago with any other pension fund.” The Board of Education accepted this, according to Lou Pyster, because they knew that otherwise they would be raising the specter of retired teachers living on dog food. The rebate used to be 85 percent, but the downturn in the market and the acceleration of retirements have taken their toll, according to incumbent Trustee Rose Mary Finnegan.

The rebate had been 85 percent, but the downturn in the market and the acceleration of retirements have taken their toll, according to Rose Mary Finnegan. Voting Yes on this agreement — so that the retirees could get at least 70 percent of their health care rebated — were Patricia Knazze, who was joined by teacher trustees Rose Mary Finnegan, Earnestine Murphy, and Connee Fitch-Blanks. Joining them were retiree trustees James Ward and Walter Pilditch. Trustee Gene Saffold, one of two school board members of the fund, also voted Yes. Retiree trustee Carol Nolan was not present.

Voting No were prinicipal trustee Terry Katsulis and teacher trustees Linda Porter and Maria Rodriguez. Many trustees and observers say that Rodriguez and Porter did not go along with the deal because the UPC had decided to use the issue politically and blame the Lynch administration if anything went wrong.

Maria Rodriguez now takes credit in her campaign literature for the fund being at 108 percent funding liability level during her presidency, while she says it is currently at 86 percent. A number of long-term observers of the fund point out that the short-term gains during those months came mainly from the performance of the stock markets, not from any activity on Rodriguez’s part. Neither of the numbers (the “108 percent” claim or the “86 percent” charge) has been documented. Like many things now being said in the heat of electon time spin, it is simply repeated over and over.

Was the House of Delegates misled?

At the September, 2005, House of Delegates meeting, when the motion to endorse the UPC candidates came up, a UPC member immediately called for the question, thereby stifling discussion and debate.

Al Korach, retiree delegate and former pension trustee, spoke against the endorsements and in favor of the incumbents. He reiterated what had been said about how solvent our pension fund was and how there had been no scandals. Why, then, are the incumbents being dumped? he asked. Didn’t the union value the competence and experience of Ernestine Murphy, Pat Knazze, and Rose Mary Finnegan?

Karen Kreinik, delegate from Columbus School, has called for adjournments of meetings and for quorums at moments favorable to the UPC leaders. Kreinik spoke in favor of the UPC endorsements. She said words — to the effect  — “What do you mean there have been no scandals? These incumbent trustees sued other trustees. Union members suing other union members… I don’t want my union dues being misused this way.” A quick question call and vote followed.

According to the incumbents, no trustees were ever involved in the court suit. The CTU sued based on the fiduciary irresponsibility of the trustees involved in the November 2003 ‘Big Lie’ letter. But there was no chance to explain this to the House in September 2005. When Ernestine Murphy took a microphone after Kreinik finished her speech, she tried to make a point of information asking, “What scandal?” The mike was taken from her, and the House was never able to hear the facts of the case. Murphy is secretary of the pension fund’s trustees and has more than two decades’ union membership, but she was silenced by the floor tactics of the UPC and the vote rushed through with the usual commotion.

Voting on October 28 for experience...

Jacquelyn Price Ward served as CTU Recording Secretary during the administration of Deborah Lynch and is now (again) an elected delegate in the House. Ward was instrumental in crafting the language for the retiree health care offset legislation which brought the threshold from $40 million to $65 million in the acclaimed agreement that got the retirees what they needed The agreement also stated that the pension fund would not be merged with any downstate pension fund. According to former President Lynch, Ward was also highly effective in getting the Pension Enhancement Plan (PEP), which six thousand members are going to take advantage of. Former Vice President Howard Heath also secured a letter from Governor Rod Blagojavich that Chicago’s pension fund would be excluded from the governor’s blue-ribbon panel study of public pensions. The results of this study have now caused a delay of pension payments to downstate pension funds.

“Not bad”, many say, for a team that Stewart likes to characterize as inexperienced. The record shows that the ‘experienced’ UPC brought union members the pension fund raid of the early 1990s, two percent raises for a decade (they criticized Lynch’s four percent raise), the loss of city-wide seniority, and the downsizing of medical insurance — among other things. Much of that the UPC gave away even before the downturn of the stock markets and the acceleration of the number of retirements.

Pension Fund President Patricia Knazze echoed the sentiments of all four of the PACT candidates. In an interview with this reporter, Knazze went on record to say that they are all unequivocally opposed to any merger of our pension fund and believe in a strong Chicago teachers pension fund.

President Knazze said that she has been a union activist for over thirty years and has been a trustee of the teachers pension fund for nine years. She’s worked under all union administrations. “It doesn’t matter if you’re now for Lynch or for Stewart, or for one or the other in the past,” Knazze said. “What matters is that our pension fund stays separate and independent from partisan politics and union cronyism.”

Knazze continued: “I resent President Marilyn Stewart’s attempts to link my candidacy and that of others in some way with any move to affiliate with IEA/NEA or with a takeover of the pension fund. I also resent the character assassination of union members in the UPC literature. Neither our pension fund — nor any trustee — has ever been under investigation, nor are they now.”

Knazze stated that since she became president in January, 2004, the pension trustees have been able to complete agendas for each meeting in an atmosphere of collegiality and cooperation not only with the trustees, but with the staff as well. She contrasts this with the fourteen months prior under the presidency of Maria Rodriguez.

This is the second election for two of the candidates. Finnegan and Knazze were both elected in a mailed ballot election in October, 2004, despite being denied then, as now, the endorsement of the UPC chiefs. Through microphone shenanigans, they were even denied a minute to speak in behalf of their candidacy. The October 2004 election was overturned when a court suit was filed by UPC initiative. (An expensive court case is on the record here, but it was paid for with union money because the UPC wanted it!). The election was overturned on a narrow technicality: The mail ballot used was not construed by the judge to be in keeping with the by-laws of the pension fund which stated that a place for voting had to be designated. Finnegan and Knazze are now running for the remaining two years of the terms to which they have been elected.

Union dues are paying for a UPC advertisement in the Union paper for the candidates the union leadership rammed through the September House of Delegates for endorsement. Union newspaper ads and articles repeat the distortions that have characterized the UPC campaigns against the incumbents for the past several weeks.

Ernestine Murphy is running for a three-year term. “Nobody — but nobody — has ever advocated for the merger of our pension fund with the TRS [the Illinois “Teacher Retirement System”, as the downstate fund is called]. Nobody: not the Union, not the trustees, not the CPS Board, not any politician—nobody,” Murphy told Substance. All of the incumbent candidates, along with Jacquelyn Price Ward, expressed their dismay to Substance that the union’s members were receiving such a one-sided version of events based on the questionable House vote to endorse the UPC candidates.

“Integrity and the truth are the issues October 28,” Knazze told Substance.?