This entry by AFSCME Secretary-Treasurer Lee A. Saunders is cross-posted from Huffington Post and Firedoglake.

Last week, the U.S. Securities and Exchange Commission did something it has never done before. It charged the state of New Jersey with fraudulently misleading investors about the health of the state’s pension plan. From 2001 to 2007, the SEC charged, the state gave out false information about the state’s retirement funds. They cooked the books. Now investors, taxpayers and retirees are left to clean up the mess.

Robert Khuzami, Director of the SEC’s Division of Enforcement, said: “The State of New Jersey didn’t give its municipal investors a fair shake, withholding and misrepresenting pertinent information about its financial situation.

It is not just investors who are not getting a fair shake. Taxpayers and retirees are being abused as well. While the state failed to adequately invest in their retirement funds and misled investors, New Jersey’s public employees faithfully made their payments into the funds. Public employees in the Garden State contribute 5.5 percent of their compensation to their retirement fund, and earn an average annual benefit of $20,349.

Now the state’s policy of underfunding the retirement security of state employees has been exposed. As The Wall Street Journal noted this week: “The problems go back nearly 15 years, to when the then-relatively healthy state decided to borrow $2.8 billion and stick it in its pension funds in lieu of making contributions from tax revenues.”

The state compounded the problem by using accounting gimmicks, giving investors the false impression that everything was fine. And governors from both parties failed to make required payments into the funds. Earlier this year, for example, Governor Chris Christie failed to make the state’s required $3.1 billion payment.

No one should be surprised that New Jersey’s fraud against investors, retirees and taxpayers began with tax giveaways for the rich. Lost revenue from income tax cuts enacted from 1994 through 1996 – under GOP Governor Christine Todd Whitman – totaled $14 billion, and sales tax cuts totaled $10 billion. That’s more than enough to fill the hole in the state’s pension funds.

We have every right to be angry with irresponsible public officials in New Jersey. If anything, they got off the hook easy, with the SEC failing to name names or fine the officials who conducted the fraud. Sadly, other states have been just as irresponsible. Many have lost revenue by passing unwise tax cuts, then underfunded their pension plans and used accounting gimmicks to hide their inadequate investments. Investors, taxpayers and retirees all benefit when there is accountability and transparency in pension funds.

This message comes from AFSCME President Gerald W. McEntee and Secretary-Treasurer Lee A. Saunders.

Click here for a state-by-state breakdown of the impact this funding will have during the 2011 fiscal year.
(Courtesy FFIS Federal Funds Information for States)

Today, the U.S. Senate took a bold step forward in the effort to protect jobs and bolster America’s economic recovery. The Senate, by a 61 to 38 margin, overcame the filibuster opposing H.R. 1586, which provides significant aid to states and school districts.

This is an enormous step in the right direction for AFSCME members fighting to protect our jobs. And at the end of the day, all Democratic senators voted to protect those very jobs. And with two courageous exceptions, Olympia Snowe and Susan Collins of Maine, Republican senators voted to lay off thousands of public employees.

Over the last several months, AFSCME members like you have called, e-mailed, and faxed your senators — and recruited your friends and co-workers around the country to secure this victory.  You urged the Senate to do the right thing and avoid prolonging the economic crisis that confronts public service workers in every community in this country. And your voice — along with thousands of other AFSCME members — was heard in Washington, DC.

Because of your ongoing actions we were able to move this critically important bill forward. Under the leadership of Sen. Harry Reid and with the persistence of Senate Democrats and you, the Senate has thrown a lifeline to millions of Americans who are being hit hard by the worst economy since the Great Depression.

The Republican filibuster was our biggest obstacle. But, we still face a vote in the House and we will need your help to ensure victory there. As we look to the elections, Americans have a clear choice: Democrats who will do what it takes to save and create jobs and get our economy moving, or Republicans who are all too willing to watch the economy stall for their political gain.

Thanks again for all that you’ve done to help pass this critical bill and save more than 900,000 public and private sector jobs. We’ll be sure to keep you updated on what’s next.

A message from AFSCME’s new International Secretary-Treasurer Lee A. Saunders.

(Lea este mensaje en español del nuevo Secretario-Tesorero Internacional de AFSCME, Lee A. Saunders.)

Dear Sisters and Brothers:

Just over a week ago at the AFSCME Convention in Boston, I was humbled to be elected Secretary-Treasurer of our great union. I am enormously grateful for the support I received from President McEntee and so many brothers and sisters who played a part in my campaign.

I am writing today to assure you that I will do my very best every day to represent your interests, to stand up for our union and to fight for the public services that the members of AFSCME provide.

As the first contested election for a top officer’s spot in decades, the campaign for Secretary-Treasurer was spirited and energetic. But we all must understand that no matter where we started out, we’ve got to end up together — especially now, when so much is at stake for working families from one end of this country to the other.

Danny Donohue and I stood for election because we are both deeply committed to AFSCME members and deeply devoted to this union. I have known Danny for many years and worked closely with him in New York. As I told the delegates to the Convention, I will always appreciate his graceful call for unity as our campaigns came to an end.

In 2010, as we confront unprecedented state and local budget crises and attacks on public services, we must never forget the words from our constitution: “We are equally dedicated to exert ourselves, individually and collectively, to fulfill the promise of American life.”

Fulfilling the promise of American life requires us to move forward as one, finding the strength, the determination and the resilience to lift up all working families.

United, we must:

• confront and overcome the forces that have declared war on our jobs and our pensions and benefits;
• beat back privatization, because it not only robs us of jobs — it weakens vital public services;
• learn from the experience of our remarkable retirees and prepare new leaders to carry on the fight;
• continue our commitment to diversity — because diversity is at our core and gives us strength; and
• elect public officials who respect the services we provide and will stand with working families, come hell or high water.

My first lessons in union activism and solidarity came from my parents. My late father, who died a year ago this month, spent many years as a bus driver in Cleveland and was a dedicated member of the Amalgamated Transit Union. I still remember the early lessons he taught me about the true meaning of solidarity. My mother was a community activist who went back to college after raising me and my brother, and ultimately became a community college professor and member of the American Association of University Professors. It’s because of them that the first thing I did when I started working for the State of Ohio was to join the Ohio Civil Service Employees Association (OCSEA), an affiliate of AFSCME.

As a kid I would sometimes ride with my dad when he made his final bus run of the day. I’ll never forget the pride he took in his job. He treated every person who boarded that bus with respect — the same respect he commanded as a driver. That’s what our union is about: standing up for the dignity of all work and all working people.

As I begin my new responsibilities, I hope I can count on your help and your advice during the battles ahead. Working together, we can accomplish great things for our union, our members and the vital public services that make America happen.

In solidarity,

Lee A. Saunders
International Secretary-Treasurer