"Knowledge will forever govern ignorance

 and a people who mean to be their own governors

 must arm themselves with the power which knowledge gives."

Thursday, May 31, 2007

Federal Authorities Launch Civil and Criminal investigations Into NJ Pension Funding

Federal criminal investigators and the Securities and Exchange Commission are looking into New Jersey's pension system after a report found the state diverted billions of dollars from it for other purposes, such as state aid to Abbott school districts.

Abbott districts have been spending at some of the highest levels in the State, and well beyond non-Abbott districts, with no discernable correlation to improved achievement.

Of the 25 highest spending K-12 districts, 17 are Abbott districts. Moreover, the three highest spending K-12 districts in the State are Abbott districts.

The Abbott districts have not been required to exercise the fiscal discipline that the State and other school districts must undergo; instead they have been allowed to balance their budget through virtually unlimited supplemental funding requests.
The SEC, which regulates stock and bond markets, will try to determine whether state officials misrepresented the impact of pension-fund maneuvers in documents provided to investors and the U.S. Attorney's Office is looking into any criminal violations. Investigations into the state’s mismanagement of the grossly under-funded pension system could take years.

The shortfall developed since 2001, as the collapse of the stock market drained $22 billion from the funds. Lawmakers compounded the problem by using accounting gimmicks to skip required annual payments into the funds and to cover billions of dollars in additional costs from increased retirement benefits they granted to public employees.
The state of New Jersey’s Division of Law employs 530 attorneys, but apparently none with the expertise to represent the state in these federal civil and criminal investigations. The New Jersey Treasury Department has hired a law firm, Fried, Frank, Harris, Shriver and Jacobson, to defend the state.

David Wald, spokesman for state Attorney General Stuart Rabner, said he didn't know immediately how much money has been spent on the outside law firm, but said its lawyers will get $495 per hour, with associates paid $180 per hour.
So, let’s review how New Jersey taxpayers got into this mess.

  • As the state admitted to the New Jersey Supreme Court, the Abbott school districts have spent billions upon billions of taxpayer money without the slightest bit of fiscal discipline and with no discernable improvement in student achievement.

    To help fund the Abbot districts’ virtually unlimited funding requests, the state diverted billions from state pension contributions to satisfy these insatiable demands.

    The additional Abbott funding was used to increase pay, benefits and the number of jobs in these school districts, which further exacerbated the state’s pension funding liability.

    To curry favor with the state’s public employees, pension benefits were increased in 2001 and were “paid” for with accounting gimmicks, further compounding the state’s pension funding crisis.

    Facing federal investigations into the state’s pension funding debacle, taxpayers will foot the tab for outside council to defend the politicians and state employees who got us into this mess. The 530 lawyers on the state’s payroll and in the pension system aren’t up to the job.
Is it any wonder why New Jersey’s broke?

Labels: , , ,


At 6:34 PM, Anonymous Anonymous said...

State employees cannot under any circumstance authorize the movement of pension monies to other accounts unless ordered by treasury.
State employees cannot make that kind of decision, it is strictly the doing the politicians. Stop indicting state employees for the sins of the politicians. Most state employees are also tax payers

At 2:19 AM, Anonymous Anonymous said...

The critcism of the state employees is, I think, largely targeted at state employee unions. They are the ones who
*Pressure politicians into paying out untenable benefits.
*Make it so an untenable number of employees are hired.
*Make it impossible to fire incompetent employees, some of whom have undoubtedly contributed to the gross waste in Abbott districts.
Most public employees are stand up people but the people who represent them aren't.

At 11:32 AM, Blogger Dino P. Crocetti said...

There was a time when I thought a Federal Probe meant something. Seems like a long time ago.

Probes never seem to go anywhere and I get so tired of holding out hope that something good will come out them. Nine times out of ten, they just become a faded memory.

Well, here's hoping....again.

At 9:16 AM, Anonymous Buy Inderal LA said...

Hey,I think this concept is amazing.I never read such kind of stuff..Fantastic information.

At 8:13 AM, Anonymous Toby said...

Quite worthwhile information, thank you for the article.
here | here | site

At 5:45 AM, Anonymous Childrens Bedroom said...

Hi there,
A real impressive post! I am in fact pleased to glance at this blog’s posts which contain plenty of useful data.

At 8:39 AM, Anonymous sofa slipcovers said...

Do you have more great articles like this one? I appreciate the incredible dedication seen in this piece.


Post a Comment

<< Home

 Contact Us

  • Email Us
  • Blog Roll Us!



  • Atom Feed
  • Bloglines
  • Feedburner
  • Feedster
  • Add to Google
  • Add to My MSN
  • Add to My Yahoo
  • News Is Free

    Recent Posts

  • Senate Immigration Reform Bill Gets a Thumbs Down ...
  • Are You Aware Hillary Clinton Failed the Bar Exam?...
  • U.S. Greenhouse Gas Emissions Decline, Economy Gro...
  • Why Did Corzine Give Katz More Than $6 million?
  • Congress Takes Taxpayers for A Ride
  • New Jersey’s Top High Schools
  • Making Matters Worse: The Immigration Reform Act o...
  • Secure Borders, Economic Opportunity and Immigrati...
  • The Whole Thing Is Crazy
  • The Federal Government Knew For 16 Years


  • November 2004
  • December 2004
  • January 2005
  • February 2005
  • March 2005
  • April 2005
  • May 2005
  • June 2005
  • July 2005
  • August 2005
  • September 2005
  • October 2005
  • November 2005
  • December 2005
  • January 2006
  • February 2006
  • March 2006
  • April 2006
  • May 2006
  • June 2006
  • July 2006
  • August 2006
  • September 2006
  • October 2006
  • November 2006
  • December 2006
  • January 2007
  • February 2007
  • March 2007
  • April 2007
  • May 2007
  • June 2007
  • August 2007
  • September 2007
  • October 2007
  • November 2007
  • December 2007
  • January 2008
  • February 2008
  • April 2008
  • November 2008
  • January 2009
  • August 2009
  • September 2009
  • February 2012

    Online Journals

  • National Review

  • Opinion Journal

  • Real Clear Politics

  • Weekly Standard

  • Blog Roll

  • A Blog For All
  • Althouse
  • Ankle Biting Pundits
  • Barista of Bloomfield Avenue
  • Betsy's Page
  • Blue Crab Boulevard
  • Blogs For Condi
  • Bob the Corgi
  • Brainster's Blog
  • BuzzMachine
  • Captain's Quarter's
  • Cinnaman
  • Coalition of the Swilling
  • CWA-NJ
  • Dino's Forum
  • Daily Mail
  • Don Surber
  • DynamoBuzz
  • eCache
  • Exit 4
  • Fausta's Blog
  • GOP Bloggers
  • Instapundit
  • Joe's Journal
  • Kate Spot
  • Kausfiles.com
  • Little Green Footballs
  • Michelle Malkin
  • More Mnmouth Musings
  • Parkway Rest Stop
  • Patrick Ruffini
  • Polipundit
  • Power Line
  • Right Wing News
  • Roger L. Simon
  • The Blue State Conservatives
  • Riehl World View
  • Red Jersey
  • Right, Wing-Nut!
  • Sid in the City
  • Tiger Hawk
  • The Truth Laid Bear
  • Tim Blair
  • Wizbang

  • Sid in the City

    Majority Accountability Project


    New Jersey Blogs


  • 11th and Washington

  • A Blog For All
  • A Planet Where Apes Evolved From Man?!?
  • Armies of Liberation
  • Atlantic Highland Muse
  • Attack of the 15.24 Mete

  • Barista of Bloomfield Avenue
  • BeLow Me
  • Big Windbag
  • Blanton's and Ashton's
  • Blue State Conservatives
  • Burning Feathers
  • BuzzMachine

  • Clifton Blogs
  • Coalition of the Swilling
  • Cobweb Studios
  • CoffeeGrounds
  • Constitutional Conservative
  • Confessions of a Jersey Goddess
  • Corzine Watch
  • Crazy Jackie
  • Cresting Acrocorinthus
  • Cripes, Suzette!

  • Daniella's Misadventures
  • Did I Say That Out Loud
  • Dojo Mojo
  • Dossy's Blog
  • Down the Shore
  • DynamoBuzz

  • eCache
  • Enlighten-NewJersey
  • Eye On Hoboken
  • Exit 4
  • Exit Zero
  • Extreme-Psychosis

  • Fausta's Blog
  • Fausti's Book Quest
  • Fractals of Change
  • Frenchtown NJ Blog

  • GiggleChick
  • Gregg Gethard's Amazing Personal Journey
  • goethe re scape

  • Hoboken Rock City

  • IamBillPower
  • If this is paradise, I wish I had a lawn-mower
  • Imaginary Therapy
  • Inadmissible Evidence

  • Jersey Beat
  • Jersey Perspective
  • Jersey Side
  • Jersey Style
  • Jersey Writers
  • Joe's Journal

  • Karl's Corner
  • Kate Spot

  • Laughing At The Pieces
  • Likelihood of Confusion
  • Liss Is More

  • Mamacita
  • Mary's Lame Attempt at Fame
  • Media in Trouble
  • Michael Carroll
  • Mister Snitch!
  • MucknMire
  • My Life as a Rabid Blog
  • My New Jersey

  • New Jersey Eminent Domain Law
  • NJ Conservative
  • NJ Fiscal Folly
  • New Jersey For Change
  • New Jersey Weblogs
  • NJ Spoken Word
  • Northeast Corridor

  • Parkway Rest Stop
  • Philly2Hoboken.com
  • Poetic Leanings
  • Poor Impulse Control
  • Professor Kim's News Notes
  • Property Tax NJ

  • Rain Angel
  • Riehl World View

  • Shamrocketship
  • Shipwrecks
  • SloppyDawg
  • Sluggo Needs a Nap
  • SmadaNeK
  • Static Silence

  • Tami,The One True
  • Tammany on the Hudson
  • Tequila Shots For The Soul
  • The Art of Getting By
  • The Center of New Jersey Life
  • The Daily Fry
  • The Duc Pond
  • The Jersey Shore Real Estate Bubble
  • The Joy of Soup
  • The Mark(ings) of Zorro
  • The New Wisdom
  • The Nightfly
  • The Opinion Mill
  • The Pink Panther
  • The Political Dogs
  • The Rix Mix
  • This Full House
  • Tiger Hawk
  • Tomato Nation
  • Toxiclabrat
  • Twisty

  • Unbillable Hours
  • Usdin.Net

  • Where Is The Remote
  • Wine Goddess

  • Xpatriated Texan

  • Links

  • NJ Governor
  • NJ Legislature
  • Bob Menendez Information

  • Blog Rings

  • Blog Explosion
  • Blog Directory
  • Blogsnow
  • Blogwise
  • Blogstreet
  • Blogshares
  • Blogarama
  • Blog Digger
  • Daypop
  • Globe of Blogs
  • Blog Search Engine

  • Ecosystem Status

  • Who Links Here