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.
Some background:
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.
Singing River Health System trustees rescind pension plan termination vote
Even If we assume the above theory of possible scenario/s involving behind the door crony dealings of politicos charged with investment of retirement funds where was the oversight of the boardmembers of retirees/employers who sat on the investment board?
Were they not informed of the high risk but occasional high returns/losses associated with hedge funds and the like ? Or did they know but did not do their fiduciary duty owed to the retirees/employees they represented and inform them of the high risks involved?
Most retirement plans provide checks and balances via fellow retirees/employees sitting on investment boards. Anita Lees’ article “Risky Business” begs this question of oversight but fails to address it.
This is not a theory. It is a bunch of vague ramblings about 3-4 different public controversies, alleged to all be connected to one another.
In the end, the truth will be much simpler: people affiliated with SRHS (inside and outside) used the public nature of the system, and its legally protected cloak of secrecy, to their personal gain. The pension plan is the worst symptom of the underlying disease.
Rereading Anita Lee’s “Risky Business”article she says in first sentence ‘…. MEMBER retirees and employees invested in high risk……’
Does her statement put some of the blame of pension fund investment losses on the appointed MEMBERS?
Perhaps Mr. Clifton Jones who I think I read sat/sits on a pension board might enlighten Slabbers about who the MEMBERS are to whom Anita Lee maybe referring?
The “employee committee” had zero input into how the money was invested. This committee was only told what the trustees and administration wanted them to know.
Yet there is at least one legal filing made recently which suggests that both Morris Strickland and Stephanie Barnes Taylor recently were or still are members of the “employee committee” (a number of different names are apparently used interchangeably by various parties).
The possibility that Morris Strickland could resign from the BOT of SRHS and yet remain in whatever other position he held with the SRHS Retirement Plan and Trust is mind boggling. What would John McKay say?
Rfp:
So what I hear you saying is there was/is an “employee committee” and from your referenced legal filing two of the committee members were Strickland and Taylor ” queen of legal”?
So in effect these two committee members despite one being an attorney were not entitled to any information and were ” straw men” accorcding to commenter ” nobody” below. But what does the legal case alledge about these two plan employee/retiree committee members?
There may have been other members and perhaps Mr. or Ms. Clifton Jones can help us out with this query as I believe I recall ms. Clifton saying her husband was on some sort of pension committee but if I’m wrong I apologize but I’m sure I’ll get corrected, dressed down and called some names for asking said questions.
However, said information is important to know because if pension committee employees knew of ” risky business” investments and did not do something to alert other employees/retirees then they are also negligent of fiduciary duties to other plan uninformed members they represent. If on the other hand committee members did inform the plan members of these risky investments ( via news letters or annual reports) then we get into the area of defendants alleging assigned percentage of cause due to failure of plaintiffs to object to known risks .
Greater burden is placed on the fiduciary duties of Board of Supervisors and Trustees but some burden to object to mitigate damages must be placed on plan committee members and/ or the members they represent if in fact they were all informed of risk of junk bonds and hedge funds.
It a shame all us retiree’s have to fight for what we worked so hard for (pension) .the jcbos and srhs trustees haven’t done a damn thing to help save and make the pension whole.we not asking for anything else, only what we were promised!!! Looked what happened today at bos meeting nothing. The bos had a meeting and John McKay told it they all agreed ed not to talk to the retirees.
What the hell going on?
The Supervisors are covering for the perpetrators.
http://oregonhistoryproject.org/media/uploads/Duck-Cover-Front-FSDM2.jpg
SRHS employees complain they were cut out of county supervisor meeting ‘Not the American way,’ retirees said
JCBOS President Barry Cumbest:
“There are no trustees here. We’re not meeting with them,” he said referring to the SRHS Board of Trustees.“We’re not trying to hide something is what I’m trying to say.”
Yup. Nothing to hide.
Then he followed up with this whopper!
Cumbest told them the criminal investigation is ongoing, “but it’s not the most important thing. We can do that as well next year. The health of the hospital system is the most important thing.”
Hopes and wishes or plans? What role do the JCBOS play in the scheduling of a criminal investigation?
Clarification re SRHS pension plan and trust.
There was a committee comprised of senior management employees and select members of the BOT. This committee “managed” the pension fund.
There was also a committee referred to as the”employee committee.” This committee was comprised of employees. I do not know how they were selected back in 1983. I knew 2 of them and they represented 2 different departments. This committee had not met for years up until November 2014 when they were told the plan was being terminated.
The “employee committee” was never informed (according to my sources) of how or where the money was invested.
Well, SRHS retirees and workers, don’t worry even a little bitty bit. They love you, they won’t come in your mouth, and most importantly, the check is in the mail.
Nunn YA, I almost peed my pants! Lawdy! No they won’t come in our mouths, cus they alridy done came in our A$$. We have been screwed in every orfice and in some cases every office too.
Who is with me in getting a county petition started demanding both the removal of Srhs leadership and srhs bot then vote sum Of den JCBOS out?
I’ll sign it and work to get more signatures!
I hope you readers saw our esteemed Jackson County Board of Supervisors refuse to allow the SRH retirees on the agenda since this is the 4th Monday and undoubtedly they will do everything in their power to cover for their cronies, WLOX TV. Board President Barry Cumbest made the statement and a gentleman told the board that they worked for him, not the other way around, in essence. Who cares if it is the 4th Monday or last Friday or any other day of the week? The public will be heard!
Along with the recently announced cutbacks, SRHS has released additional pension plan financial reports. Link at the Sun Herald story.
Still in deficit, Singing River cuts 14 positions, some employee benefits as ‘cost-saving measure’
I don’t have time right now to get into them, but in the meantime will refer to two previously publicly available data points indicating reported valuations of the pension fund assets.
1. An April 2002 article published by Pensions and Investments: LANDING ON THEIR FEET: Andersen partners jump ship All on investment consulting team leave, most join Clark/Bardes to help create human capital practice
Singing River Hospital, Pascagoula, Miss., with $115 million in its defined benefit plan, will definitely stick with Mr. Buckalew, said Robert Lewis, chief financial officer.
“We started with Gregg as a consultant in 1992 when he was with Watson Wyatt and followed him to Andersen, and now we’re following him to Clark,” Mr. Lewis said. “He’s been our focus more than Andersen. When I heard the guilty verdict, I didn’t even stop to think that he had been at Andersen.
2. Singing River Health System Employees Retirement Plan and Trust Financial Statements September 30, 2011 and 2010
September 30, 2011 Net assets held in trust for pension benefits $121,642,960
I failed to mention that among the inflows were the mandatory 3% employee contribution (which I believe was level for the period).
Well, this is going from “interesting” to downright weird. L. Breland Hilburn is now (at least until someone files a motion that gets granted) the special judge over the SRHS mess. For those who don’t know, which is likely most folks, Judge Hilburn was involved in the Scruggs-Wilson-Luckey love triangle. He gave Scruggs and Co. an “interesting” midnight-hour order that attempted to keep the tobacco money out of the reach of Luckey and Wilson, who had attempted an end run by going to federal court in Texas. The Texas court punted the whole thing back to MS fed court, which basically laughed at Hilburn’s order. Why does this matter? Who knows, but new SRHS Trustee Scott Taylor was the guy advising Scruggs that Luckey and Wilson owed Scruggs money, etc., and Hilburn seemed to be awfully sympathetic to Scruggs’ positions. And perhaps even more interesting, after his retirement from the bench, Judge Hilburn has been associated with the Eaves firm in Jackson, a _plaintiff’s_- with-a-capital-P firm (John Arthur Eaves Sr. and Jr., the latter also having all sorts of interesting facets, including a stepson who recently bit the head off of a live mouse, hamster or gerbil). And Pope Mallette and Cal Mayo, of Oxford and Scruggs’ attorneys in the Wilson v. Scruggs litigation, are repping at some of the Plaintiffs in the SRHS mess. Plus, Mike Moore was looking to get into the SRHS mess, too. Sure, MS is a fairly small legal pond, so there will be overlap, but this is getting a bit ridiculous. What remains to be seen is just what these plaintiffs/mass tort guys (and Mayo-Mallette) see as the payday in suing SRHS and the pension plan for being, basically, broke.
A post from the old “folo.us” site (long defunct, and Tom Freeland of FOLO-turned-NorthMSCommentator died earlier this year) talked about Hilburn’s role in Wilson v. Scruggs. I am not saying the content is correct or incorrect, but am simply quoting it in its entirety. The links to the various opinions/orders cited are dead, but if anyone is interested in them, I’m sure they are available elsewhere. Here it is:
“Sic ‘em
March 22nd, 2008
Well dang, boys and girls, NMC’s balky scanner is still holding up my next addition to our Bobby DeLaughter file, but never fear, I’ve got another yarn to share with you, and before it’s over, that name will briefly appear.
Lately I’ve been corresponding with a national reporter who, for both papers and magazines, has covered Dickie Scruggs for some years now. Yesterday as we were speculating about where all this goes next, he told me a story going back to the days before Luckey and Wilson became separate cases. With his permission, I’ll share it (now augmented with some further research of my own), since he rather expects the FBI may — or at least should – be looking into the questions it raises about Dickie Scruggs’s influence over yet another judge . . .
Once upon a time — say, around summer 1997, three years or so into Alwyn Luckey’s and William Roberts Wilson’s fee-dispute lawsuits against Dickie in Mississippi circuit court — Wilson’s lawyer Vicki Slater hit upon the “constructive trust” theory upon which Plaintiffs asserted a claim to the asbestos-settlement fees that, they argued, should have gone to them instead funding the tobacco litigation. Wilson also argued he was entitled to a part of the tobacco fees as result of Dickie’s commandeering his asbestos fees to fund the tobacco litigation.
But every time Team Wilson-Luckey asked anything about tobacco in discovery, Team Scruggs instructed the witnesses to say nothing, alleging that the case was about asbestos fees and had nothing to do with tobacco. When Wilson-Luckey tried to get rulings on Scruggs’s discovery objections, just getting a hearing-date set would usually take four to six months.
And when they did finally get a hearing, Judge Breland Hilburn would state his opinion but not write an order, leaving it up to the lawyers to agree on what it should contain. But Team Scruggs would never agree to anything. So then they’d end up needing another dang hearing to argue what the order was supposed to say.
Finally, in 2000 Judge Hilburn sua sponte (“all on his own,” without anyone’s asking him to) sent out a letter opinion disallowing any discovery whatsoever about tobacco. (Opinions in letter form are quite unusual; one lawyer I asked about them has never encountered one in 25 years of practice.)
So Wilson-Luckey took the matter to federal court in Texarkana (with Wilson as plaintiff, Luckey as intervening co-plaintiff), helped through the door there in part because Dickie got tobacco money in Texas’s settlement, too.
Well, plaintiffs’ making this move to the Texarkana court (David Folsom, J.) sent Dickie howling back to Judge Hilburn, who immediately — in the middle of an October 2001 night, with no secretarial help — banged out an order granting summary judgment to disallow the tobacco issues. But the thing had so many misspellings and convoluted sentences (in triple-spaced lines), it looked downright silly (three-page pdf).
And it met with a blistering opinion (26-page pdf) from Texarkana’s Judge Folsom about Dickie’s trying to have his cake and eat it, which opinion sported many a sic (Latin’s “thus,”Legal’s “Yo, I’m not the doofus who wrote it this way”) that essentially made fun of and excoriated Hilburn. (I know you’ll enjoy the famous passage at the top of page 6.) Bottom line: Folsom was determined that the case not go back to the state court that had mucked it up so badly, including by refusing to let Wilson-Luckey make the constructive-trust case.
But eventually, there being no other nexus in Texas, Judge Folsom ordered the case moved over to the Southern District of Mississippi for the convenience of the parties. There, in September 2003, Judge Tom Lee resolutely kept it out of Hilburn’s paws (24-page pdf), overruling Scruggs’s jurisdictional motions and motions to dismiss. Note footnote 4 on page 9: “There can be no doubt that the equities here favor Wilson and Luckey. One need only briefly peruse the state court record to recognize the manifest dereliction of judicial function ” (emph. mine).
As soon as the case went to Judge Lee, Dickie brought in John Griffin Jones, who years earlier had clerked for Lee. “Interestingly, and I don’t have time to go back to my notes,” writes my reporter pal, “I think this came from the mouth of young Zach someplace in the record. I think the Scruggs team had its first fling with John Griffin Jones when the case moved from Texarkana to S.D. Miss.”
Although Mr. Reporter surmises that “Scruggs et al figured he’d be of maybe some earwig help, or whatever,” NMC doubts this was the case. “First,” he tells me, “I don’t think they were trying to directly contact Judge Lee but influence him either through a law clerk who knew how to talk to him or through the fact that he would listen more to a former law clerk. I’ve been told that by various lawyers involved. The suggestion they had earwigging in mind is way too speculative.”
Another source agrees: “You just don’t earwig federal judges (or state judges either!), and I think that Jones knows Judge Lee well enough to know that such would be looked upon very poorly. Not to say that Zach and Scruggs may have thought Jones could earwig or that they would gain credibility with Judge Lee just by having Jones on the case. I am sure that they thought Jones’ relationship with Judge Lee would help them somehow.”
Well, whatever hiring Jones was about in Dickie’s mind, let us wend onward: After the parties had spent a year or 18 months fully litigating and completing discovery in federal court, Team Scruggs filed for summary judgment, claiming that the constructive trust claim was invalid for lack of a res (that is, a “matter,” in this case an adjudicated amount of asbestos fees). Judge Lee’s ruling maintained Folsom’s line that the constructive-trust claim should stay in federal court, though he also found that further action on it had to await a ruling on whether there was any asbestos money for Scruggs to (mis)use in the tobacco case. So he’d sit tight and await that word from state court.
Along about then, in 2005, in a move opposed by Team Wilson, Team Luckey decided to pull their case out of Hinds County and S.D. Miss. and take it on up the road to the Northern District of Mississippi for Judge Jerry Davis to handle. Judge Davis informed the parties that if he took the case, it was going to be finally resolved in a formal trial, and that’s just what happened. Said trial produced the $17 million-plus win for Luckey, which check was cut within 30 days. (I believe NMC has more information on this phase of the action too, which I hope he’ll have time to share in the comments.)
Anyhow, at that point, Team Wilson’s Vicki Slater asked Merkel & Cocke partner Cynthia Mitchell, who’d been representing Luckey, to join forces and go-for-it on Wilson’s behalf too — and you know as much of the rest as I do.
Now here on folo, we’ve wondered about just how far back the federal investigation may go — all the way to the tobacco cases and P.L. Blake? We know that, according to Jerry Mitchell, in 2000 while the Wilson case was in slow-mo, a “high ranking public official” (note “public,” not “state”: there may be a Lott of difference there) asked Peters to prosecute Wilson as a favor to Scruggs — a conversation that we know (again from Mitchell) interests the federal prosecutors.
And while Ed Peters was still a district attorney (as well as Breland Hilburn’s best friend, partying with him on weekends at Eagle Lake), for reasons no one really understands, Hilburn was both slow-footing Wilson and rendering decisions so peculiar that two federal judges would not trust him enough to send him parts of the case. Just what inspired Judge Hilburn’s strange rulings? We don’t know.
But we do know that, in the same period, beginning in 1999, Bobby DeLaughter rose from being one of Peters’ assistants until, in 2002, he took Hillburn’s place on the circuit bench . . . where he continued to preside over Wilson until just this week, finally recusing himself just ahead of a motion from the Judicial Performance Commission to suspend him from the bench entirely.
So: will the Feds turn over all these various rocks to see what’s under them? Let’s wait and see.
Meanwhile, sic, if not exactly the spelling, sure is the sound that fits . . .”
Retirees, I hope I am wrong on your not getting your pension but with all the powers against you except for Senator Brice Wiggins, I do not know. I do know, not a single politician has gone out on a limb to honestly help you, reveal what is happening, who are the crooks behind SRH Pension theft, and speak out in public for you guys. Where is DA Lawrence? Where is Governor Bryant? Where is the FBI? Who are they covering for? But I am pleased you will not go down without a fight. Win or lose, you can do one good thing for mankind. You, as a organized group, can defeat every one of our crooked supervisors in Jackson County. The ballot box may be your only recourse!
I can tell you where Phil Bryant is–hiding in the weeds just as he was during the DMR fiasco. Stacey Pickering is hiding in the same clump and the only thing that brought him into view for a short period was the possibility of political brownie points. He even screwed that up.