PERA Board Meeting Was an Epic Clown Fight
- Who talked to that reporter?
- Board members angry that public information was made public.
- Two board members forced to admit that they know Dennis Domrzalski!
- Proposed cover up!
- Who talked to that reporter? It was you!
- "Liar! Liar!"
- ABQReport has emails!
They should have had pies to throw at each other. Maybe next time they will.
Because Tuesday's PERA board meeting, that is when the agency's 12-member board went into executive session to discuss massive pay raises that PERA Executive Director Wayne Probst has given to employees over the past five years, almost immediately degenerated into a really bad circus-clown fight.
Within seconds after the door to the meeting room was closed, board members started yelling, screaming and pointing at each other and calling each other liars and other names. And what were some of those board members so angry about? The fact that Probst gave 30 Pera employees $630,000 in raises last year while PERA's pension funds face a $6 billion long-term shortfall?
They were furious that I had written about the raises a week earlier, and enraged that someone might have tipped me off to the raises that some board members had been complaining and asking questions about since at least August of 2018.
That's right, some of those board members weren't obsessed with the raises and the anger they've generated among many of PERA's 40,000 retirees; they were enraged that the issue has been made public and that the ABQReport wrote about them.
In other words, elected public officials—and that's what PERA board members are—were disgusted that public information had been made public.
After the door closed, the shouts and accusations flew like hurricane-force winds. And among the first words out of some of the board members' mouths were something like, “Who talked to that reporter?” It was like a Stalin-era inquisition and purge. Who talked to that reporter? Who knows that reporter?
The accusers pointed to their colleagues and said things like, "It was you who talked to that reporter!" When the accused shouted out their denials, the accusers pointed fingers at them, much like people did during the Salem Witch Trials, but instead of shouting, "Witch!" they started screaming, "Liar! Liar!" One member was told point-blank, "It was you!"
Sets of furious and accusing eyes darted around the room focusing on any member who dared to make public information public. The shouting continued and the meeting was chaos. Board Chair James Maxon, who is supposed to be in control and run the meeting, basically did nothing to stop or control the mayhem. So much for being the board chair and exercising even the slightest bit of control.
Two board members, and I don't know if they were ashamed to admit it, sort of sheepishly admitted that the have known me for decades. Undoubtedly, many of the other board members were outraged and aghast that elected officials know a guy who's been a reporter in New Mexico for 34 years.
One board member suggested that I was a mere blogger. Apparently that meant that I'm some inconsequential goof who doesn't know what he's doing. That board member should know that one of my earliest and greatest mentors when I first got here in 1985 to work for The Albuquerque Tribune was the late and great James R. Toulouse, a former Tribune reporter and a revered attorney.
That board member might also want to know that a Tribune colleague and I visited Jim in the hospital in 2002 shortly before he died.
After firmly establishing that at least two board members knew me, and that I had called several board members about the pay raise story, the screaming continued. Some board members tried to bring up the fact than in 2018 Probst gave himself a 2 percent raise that the state Legislature had approved for rank-and-file state employees. The problem is is that Probst isn't a rank-and-file employee. He's an exempt employee who serves at the pleasure of the board. The board alone sets his salary, and Probst apparently never consulted the board about giving himself a 2 percent raise. It was brought up that that 2 percent raise would add up to $80,000 or more in salary and pension benefits over Probst's life. And it was mentioned that in giving himself the 2 percent raise, Probst might have violated the state's law against self-enrichment. It was also suggested that violation of the state's self-enrichment law was a fourth-degree felony.
The board members didn't have pies to throw, but they continued to scream at each other and accuse some of their colleagues of talking to me. As the gravity of the situation regarding Probst's 2 percent raise set in, one of the board member basically suggested a fix and a cover up.
“Let's just fix this,” the member said. The suggested “fix” was simple. The board would go back out into public session and retroactively vote to approve the raise that Probst gave to himself. At least one other board member thought the fix, and basic cover up, was a good idea and proper.
The board's fiduciary attorney was participating in the meeting over the telephone, and at one point said firmly to the members, “You can't fix it.” That was a stunner to some of the wannabe fixers and to the rest of the board members, and they eventually stopped shouting and calling each other names and agreed that they needed to have an audit or investigation of all the raises that Probst has handed out to PERA employees over the past five years.
The issue is whether Probst has the authority to give himself a raise and to hand out raises without specific board approval. No one knows who will conduct the investigation/audit or when it will be completed. I do know that before he left office, then-state Auditor Wayne Johnson began looking at the pay raise situation at PERA and opened a fact-finding probe to determine if a full investigation was warranted.
How do I know that? Johnson told me himself. That's right, the state auditor talked to a reporter! Perhaps some of these PERA board members will hunt Johnson down and berate him for talking to the news media.
This whole situation would be funny and entertaining if it weren't so serious. PERA staff and its board control $15 billion worth of pension benefits. Those funds are facing a $6 billion shortfall, and the future pensions and benefits of 40,000 retirees could be in jeopardy.
So with that huge issue before them, many of PERA's board members were obsessed, not with that huge shortfall, but over the fact that public information—the raises—was made public and that elected board members might have talked to a reporter.
These people really are clowns.
So here's some shocking information to some of those board members. I've got emails that some board members have sent to Probst and his staff regarding the pay raises. The one below is from member Claudia Armijo who sent it to Probst on Aug. 2, 2018.
Hey clowns: read it and shudder. We know what's going on and we'll make it all public.
> -----Original Message-----
> From: Armijo, Claudia, RLD <Claudia.Armijo2@state.nm.us>
> To: firstname.lastname@example.org <email@example.com>
> Sent: Thu, Aug 2, 2018 3:42 pm
> Subject: FW: question
> Chair Maxon and Vice-chair Kolasch:
> I have several concerns regarding this matter:
> 1) First and foremost, since at least 2013, the Board chairs have been given false legal guidance as to their authority to set salaries or approve salary increases for PERA Executive Staff. Please see NMSA 1978 Section 10-11- As a result,
> 1)In my opinion, and after reviewing state salaries, the salaries paid to PERA executive staff are outrageous when compared to similar state agency positions with similar duties and responsibilities. (I am not referring to Investment staff pay) PERA staff are paid out of the trust fund so the Board has a duty to oversee how that money is spent
> Claudia Armijo
> Acting General Counsel
> New Mexico Regulation and Licensing Department
> Office of the Superintendent and General Counsel
> PO Box 25101
> Santa Fe, NM 87505
> From: Propst, Wayne, PERA
> Sent: Wednesday, August 1, 2018 1:54 PM
> To: Armijo, Claudia, RLD <Claudia.Armijo2@state.nm.us>; James Maxon <firstname.lastname@example.org>; Kohlasch, Jackie O., TRD <email@example.com>
> Subject: RE: question
> Hi Claudia,
> Please find attached the documents you requested.
> Additional documents for your review include:
> 1. A merit based compensation adjustment spread sheet for all PERA staff dating to FY15 that Renada updates for me quarterly. I’ve offered to share this with the Board in the past and we have provided it to Loretta on several occasions at her request.
> 2. An updated comparison of ERB, SIC and PERA Executive staff salaries. While we sent this before, we recently heard from ERB that they plan to submit request for 10% to 20% increases for Executive staff. DFA had rejected 40%+ increases previously proposed by ERB but we understand that DFA is prepared to consider these lower requests. Renada included a column assuming 10% increases for comparison purposes. We will try to confirm if this happens.
> 3. In addition to the job descriptions and justifications you requested below, I’ve included the descriptions and justifications for all Investment staff and OGC staff who received merit based compensation adjustments related to moving from a classified position to an exempt position.
> 4. In addition to the justifications for Executive staff, I have included their recently completed FY18 evaluations.
> One final note, my practice since becoming Executive Director has been to notify the Board leadership (Patty, Dan Mayfield and now James and Jackie) of any proposed compensation adjustments for Executive staff prior to submitting to DFA.
> Please let me know if you have any questions.