Caddo Commission: Stunning Self-Dealing

Originally Published: February 2, 2015

Last week I posted the first in a series of articles about Caddo Parish Commissioners’ unconstitutional participation in “CPERS,” the Caddo Parish Employees Retirement System. To understate the case, the article struck a nerve with Caddo taxpayers and other interests in Louisiana and elsewhere.

Before the article went out, the Caddo Parish Commissions’ production of related public documents via the Louisiana Public Records Act had ceased, many weeks into this work. Some withheld documents have since been released to us, revealing startling additional detail about the Commission’s design and conduct of CPERS.

C.B. Forgotston, government watchdog and advisor in this work, has notified all state legislators of the matter, as well as Louisiana’s Inspector General, key staff in the office of Attorney General Buddy Caldwell, and others. I have notified Caddo Parish Sheriff Steve Prator, who referred me to Caddo Parish District Attorney Charles Scott. I have also contacted the Louisiana Legislative Auditor and key Louisiana news media sources. Others have notified the Caddo Commission’s accounting firm.

I thank the Public Affairs Research Council of Louisiana (PAR) for its immediate and unsolicited word of support immediately following the publication of last week’s article. PAR was key in the 1996 state action to prohibit part-time elected officials from participating in any public retirement plan of any kind.

I have also met personally with the two Caddo Commissioners I spoke with for the first article, Mike Thibodeaux and John Escude. Upon hearing other pertinent facts and history, Thibodeaux, who was not elected to the Commission until 2008, then agreed that Commissioners are constitutionally barred from receiving such taxpayer-funded retirement benefits. Escude, who was President of the Commission when CPERS was officially established in March 2000, directly noted his surprise with those additional facts.

We must all hope Commissioner Thibodeaux, if not Mr. Escude as well, will take the lead in the Caddo Commission’s refund to the parish general fund of all taxpayer money now in their CPERS accounts.

Stunning Self-Dealing

As the new and troubling picture of this issue sharpens, it is imperative to note that elected Commissioners have not acted alone in this matter. As was pointed out to me by a Commissioner, and as newly documents underscore, top administrators must also be involved and responsible.

It is now more clear than ever that CPERS is unusually lucrative for its members. Members enjoy extraordinary benefits in comparison to other public employees in available alternative retirement plans. Such is possible because Commissioners and administrators who participate in the Plan set for themselves how much taxpayer money goes into their personal CPERS account. That is the key. Completely out of public view, those most self-interested have consistently – astoundingly – raised the taxpayer provided match for their personal contributions.

Understanding primary alternatives is important.

1) Had Commissioners been in Social Security, as are other part-time elected officials like state legislators, they would contribute, by payroll deduction, 6.2% of salary, which their employer (the Caddo Commission) would match, 6.2%. (Medicare taxes are additional.)

2) Had those top Commission members and administrators opted to add a deferred compensation plan, the Louisiana Constitution, as of the subject 1996 statewide Amendment vote, directed them to the Louisiana Public Employees Deferred Compensation Plan. That plan however, provides no taxpayer match.

These alternatives, therefore, would offer top people at the Commission no financial advantage. CPERS, a “profit sharing plan,” did … and thus they created it, and put themselves in as members. CPERS was their highly lucrative work-around, regardless that Commissioners could not legally / constitutionally be in it.

The most important fact and variable? How the Commissioner and top administrator members themselves set the taxpayer match.

1) In 2005, the first year for which documents have been produced, members who had the money to pay the highest contribution percentage paid-in 9.5% of their salary, matched by 9.5% from taxpayers.

2) Over the following nine years, the taxpayer contribution match was no match at all: for 2013 and 2014, with top-rate members still contributing their 9.5% of salary, the taxpayer match had steadily risen over those years to 16.75%.

3) The “match ratio,” stated as 1:1 in 2005, had jumped to 1:1.763. In dollar terms, taxpayers put $1.73 in top-rate members’ personal CPERS accounts for each $1.00 of personal money they put in.

4) Stated differently, but no less stunningly, over those years the taxpayer-side “contribution” had been raised by Commissioners and top administrators 76.3%, more than three times the cumulative inflation rate for those years of 22.8%.

5) The most revealing, and determinative, fact is this one: those who gained the most in money paid into their personal CPERS accounts set these lucrative rates outside of public view. All such actions are buried in the inscrutable “annual budget process.”

All of this is, in fact, part of a much wider pattern of public action for self-interest by a strong majority of Caddo Parish Commissioners. Articles I have written on that subject include the setting of salaries, and $15,000 per year “allowances” for “education travel.” In 2016, very lucrative health premium payments will be added to this list.

As to CPERS, Commissioners and top administrators have literally been raising both ends of their take from taxpayers – their salaries and taxpayer CPERS match.

A Personal Message

As some readers know, my effort to do the research necessary to hold public officials accountable for their governmental actions began in the wake of Hurricanes Katrina and Rita. It is pro bono work. I am “paid” with and by the public support necessary to make our community and state a less corrupt place to live.

At no time have expressions of support been stronger than after last week’s article. I thank each person who has cared enough to read and follow and express support. I regret that I do not have answers to all questions, particularly including the one most often asked: “Elliott, are they going to get away with this?”

… developing …

Elliott Stonecipher

(Elliott Stonecipher is in no way affiliated with any political party. He has no client or other relationships which in any way influence his selections of subjects or the content of any article. His work is strictly in the public interest, with no compensation of any kind solicited or accepted. Appropriate credit to Mr. Stonecipher in the sharing – unedited only, please – of his work is appreciated.)

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