Singing River Health System has refused to release a financial accounting of its employee pension fund, even though its own annual audit says the records are available to the public on request.
On March 9, the Sun Herald made such a request. We asked for retirement-plan financial statements from 2006 to 2014, except the year 2010-2011 because the newspaper found that statement online.
As the Sun Herald’s Anita Lee reported, without all of those records it is impossible to say how investments might have affected the retirement plan.
For months now the holy grail of reporting on the Singing River Health System disaster lay in the well rumored sweetheart related party transactions between insiders at the Health System, the Health System itself and the defined benefit pension plan the Hospital’s Board of Trustees voted in secret to terminate last November. SRHS has fought any public disclosure of its finances tooth and nail preferring instead to launch a legal jihad to remove Chancellor Harris from the related state litigation filed by retirees desperate to save the financial results of life’s work for the system.
Slabbed has documented previously undisclosed related party transactions involving the former Board of Trustee Attorney, his family and the health system. Slabbed’s commenters have uncovered even more related party transactions involving the Health System and its former Legal Services director. My guess is these limited disclosures barely scratch the surface of the cronyism that is at the heart of the SRHS financial meltdown.
So what is SRHS hiding in the pension’s financial records that Anita Lee seeks? Nunn Yabidnez posited a theory a few days ago on these pages that matches a rumor that has been circulating for a little while now and this theory is well worth exploring in the absence of any information from the Pension Plan:
Here’s a possible theory for a lot of the SRHS pension problems. I don’t claim it as fact, but the dates and the “what is known,” combined with the various external situations, tend to fit. Remember, it’s just a theory.
One way to “benefit” from pension management is to invest the funds in places that will make a reasonable income for the fund, but also cut the management in for a taste via “commission sharing” from brokers, investing in “sweetheart” deals with “friends” and doing so via what appears to be a legit broker/manager (see FiduciaryVest). There are even ways to pull equity market manipulations. And as long as things stay fair-to-middlin’ and nobody gets too stupid or greedy, things could rock along with no one ever being the wiser. However, if one or more of the “covering factors” go south, things can get bad in a hurry, esp. if the fund is stretched too thin on “friends helping friends” deals that depended on an up market. So, what does that have to do with SRHS?
That said, here’s a maybe:
1) In 2005, the economy is pretty good. The coming financial crisis is only apparent to serious financial watchers who aren’t wearing the rose-colored glasses/drinking the koolade most folks are wearing/drinking. Think of all the house-flipping shows, the condos built from Pensacola to Key West, etc. Lots of folks thought the party would never end.
2) Hurricane season 2005. Katrina, etc. hit during and within a couple of months, the FEMA bucks are flowing like a friggin’ open water main. The trough-scarfing types go into a feeding frenzy. Even the IRS gets into the act with the GO Zones, etc. The mass tort guys fire up the Enola Gay and the defense firms start counting the “local counsel” money. There ain’t no way in hell State Farm, N’wide, etc. are gonna let these buffoons sit first chair if it gets into a knifefight, but they’ll let them bill MS partner rates for a taste of the litigation budget, if for no other reason than to buy some “home cookin’” from the local judges.
3) In 2007, Trent Lott stomps on his privates with comments about Strom Thurmond, and then, brother-in-law Dick and nephew Zach get popped for, in part, promising Trent’s help in getting Bobby Delaughter a fed bench. Trent Lott resigns from Congress in Dec. 2007. Sure, Haley has pull, but not the type and place of Trent’s and combined with the growing FEMA hemorrhage/bitchfest over Katrina, etc. pork/waste, things aren’t quite as wild-west as they once were. A few folks even get busted (Brent Warr, in Gulfport, for example – late ‘08/early ‘09).
4) After years of good times in the overall economy, during which the pension shenanigans were covered by the growth in the economy, somebody flipped on the lights, the shit hits the fan and things aren’t nearly so wonderful anymore; foreclosures everywhere and no half-assed redneck “development deals” stand a chance of cash from any bank or legit investor. If your ass was hanging out over the line on some overstretched BS deal, it was gonna get cut off with a chainsaw. Those running the pension are in a real pinch – they can’t walk away, they can’t credit their way out, and they can’t keep feeding the deals. The Inspector General starts making noises around SRHS about Medicare/Medicaid overpayments. All in all, it is a “perfect storm.” Just a couple of years before, Bernie Ebbers (and the Enron folks) had gotten real prison time. The Scruggs players got prison time. And then, it’s January 2012 and Haley is term-limited out and no longer needs (or really cares about) any of the piss-ants down in Jackson County. And then, the Walkers and friends get caught dancing on their privates and locked up, after a string of dumbass moves by Scott and his little circle of jerks. Now, Haley, et al, are really distancing themselves from the piss-ants.
5) Those on the fringes start to get antsy, and start looking to other places for some kind of future. But for those on the inside, with Hilton Garden Inns, Florida “deals,” Alabama “deals,” big boats, big houses and what they think are big lifestyles to pay for, things aren’t so rosy, so maybe a quick and dirty secret shut-down will make the headache go away.
6) Oops for those with their snouts firmly in the pension trough.
Just a thought but if I were one of the dedicated retiree picketers I’d strongly consider scheduling some days at the county courthouse to force the Sups to come clean on everything Billy Guice has found.