SPRINGFIELD, Ill. (WCIA) — Money managers who invest retirement savings for 649 local police and fire pension funds in cities and towns across the state are mounting a fundraising effort to try and defeat Governor J.B. Pritzker’s proposal to consolidate their smaller funds into two combined funds.
According to an email leaked to WCIA, a former board member at the Illinois Public Pension Fund Association (IPPFA) is working to raise nearly half a million dollars to hire lobbyists to kill the pension proposal during the fall veto session at the statehouse.
“The retention of two or three lobbyist (sic) would be beneficial,” the email said, adding that the estimated “costs for a 12-month engagement would be approximately $480,000.”
Retired Addison police detective Dave Wall sent the fundraising email out to other IPPFA members and investment fund managers with a deadline for them to respond with a commitment to spend on lobbying by this Friday.
Wall founded the Wall Capital Group, an investment firm with locations in Hinsdale and Phoenix that manages more than one billion dollars in public safety pension funds. His firm’s Vice President is Bill Galgan, who is also the Treasurer for the IPPFA’s Board of Directors.
A front page ad on IPPFA’s website warns to “Say NO to Illinois Pension Fund Consolidation,” because it “flushes money down the drain.”
Pritzker predicted consolidation could reap much higher investment returns, citing a Department of Insurance report to claim pooling assets together could yield as much as $2.5 billion in higher returns over the next five years.
“Under the current arrangement, Illinois’ suburban and downstate police and firefighter pension funds are under-performing by nearly one million dollars per day,” Pritzker said. “That’s not just a missed opportunity – that’s a hole these funds are digging deeper every year – and then municipalities have to ask taxpayers to fill the hole.”
WCIA previously cited a report from the Illinois Municipal League that estimated the cost of event and annual training events like it could pile up to eight million dollars. To date, IPPFA has not yet responded to questions about the total cost of admission to their Grand Geneva event, which included a charity golf outing.
Pritzker dismissed the IPPFA as a “special interest” during a news conference last week, saying, “These are the folks who run the junkets.”
“The recent one cost about eight million dollars to the taxpayers to send people to Lake Geneva on a retreat,” Pritzker said. “I realize that this is going to disrupt their business model, but frankly, we have to do what’s best for the taxpayers of the state.”
Last week, during a press conference from Chicago, Pritzker called for organizing the scattered pension funds — each with their own board, trustees, administrative expenses, fees and training costs — into two funds, one for downstate and suburban firefighters and another for downstate and suburban police officers. Put simply, under Pritzker’s plan, the IPPFA would no longer exist.
It’s unclear which lobbyist the fund managers intend to hire to fight back against Pritzker’s plan, but one of the first names on their list could be one of House Speaker Michael Madigan’s closest allies.
State records list Mike Kasper’s law firm, Kasper and Nottage, P.C., among IPPFA’s contract lobbyists. Kasper doubles as Madigan’s election attorney and represents him in several cases.
Reached by phone Thursday afternoon and asked about the lobbying effort to oppose consolidation, Kasper said, “I have no knowledge of that.”
Madigan’s spokesman Steve Brown said Governor Pritzker’s proposal to consolidate the pension plans is “under review right now,” but the Speaker is “waiting to see if all the interested parties can be brought on board.”
Brown acknowledged the IPPFA and police unions are among the interested parties. Both groups have expressed concerns about consolidation. Brown said the speaker “had supported the idea for several years.”
For his part, Governor Pritzker seemed to have some understanding of the thorny history of trying to pass consolidation efforts in a statehouse run by Speaker Madigan.
“For years, Illinoisans have watched their leaders bicker and battle over the prospect of pension consolidation,” Pritzker said last week. “And for years, what little reform came to fruition was eventually thwarted by the money managers, by the luxury out-of-state conferences, the throngs of lobbyists who profit off of taxpayers, and it’s the taxpayers who are forced to pick up the tab.”
David Wall and Wall Capital Group did not immediately respond to requests for comment.