Fierce opposition to Montgomery County Executive Isaiah Leggett?s recent attempt to stack the board that oversees the county?s $3 billion retirement fund with more union members led County Council President Michael Knapp, D-Upcounty, to defer a vote “indefinitely.” Knapp did so despite the council fiscal committee?s 2-1 vote to approve Leggett?s proposal. Knapp should be commended for slowing down this freight train, but it would have been better to have the plan voted down for good.
Keeping it alive on the back burner does a great disservice to Montgomery taxpayers, who contribute 87 percent of the fund?s revenues. Doing so indicates the politicos plan to come back again ? perhaps in the fall, when the public is distracted by the presidential election.
This episode says volumes about the utter inability of Montgomery County politicos to say “No” to officials of the Municipal and County Government Employee Organization union. No wonder even The Washington Post recently described this as a “power grab” by union officials. Four years ago, Leggett?s predecessor, Doug Duncan, added two MCGEO members to an expanded 13-member Board of Investment Trustees, for a total of three, so the county?s largest government employee union is already well represented. But that?s apparently not good enough for MCGEO or Leggett, despite council staff director Stephen Farber?s warning that combining politics and pension funds will create a “toxic mix.”
Adding two more union members and making the MCGEO president a permanent fixture on the board would give union officials more control over how county pension funds are invested. The flip side, of course, is that nonunion workers, current retirees and taxpayers would have less.
As Farber, who has served longest on the pension board, noted, what the board needs most are individuals with investment expertise, not political skills in extracting more tax dollars from compliant public officials. Leggett?s proposal is especially imprudent when Montgomery County faces a $240 million deficit and has more than 700 homes in foreclosure.
The pension fund recently moved 5 percent of its assets from stocks to commodities, including oil futures, in order to get the best possible return for investors, i.e., county taxpayers. That goal ? and that alone ? should govern all pension board appointments.
