What we have here is an ol’ fashioned bar fight

And it’s the bar down here on the coast that is having the bare knuckle brawl folks and the shame of it is I haven’t had a chance to add some much needed commentary but that changes with this post, which I’ll update as I gain time through the day. The short story is this. In one corner there is what I’ll term “the settlement retirees”, their counsel along with the Jackson County political establishment (most of it anyway). In the other corner are the “we want to be made completely whole retirees” and their counsel. The money stakes here are huge which is why the fight is turning very nasty, again exposing some old rivalries that I first noticed back during the Scruggs prosecution.

For me the question is settling now a better deal than fleshing things out via litigation. I did notice that a concern raised here about the handling of attorney fees was addressed.

First things first, someone sent me “retirees that want to be made whole” attorney Harvey Barton’s 2009 judgment via anonymous email a while back and I can’t find it in my extensive email archive.  Nevertheless someone took the time to mail me a hard copy and I agree the time is right to explore the judgment and more importantly the legal concepts behind what Judge Persons found.

I’ve also seen and will post the second recusal motion of Special Judge Hilburn as it exposes some of the fault lines running under the Bar in greater detail.

Before I do any of that its worth pointing out that Slabbed began covering the Singing River Pension Meltdown because it was the exact type of story to which we were tailor made to cover and not because of the gruesome car crash quality to it all but because Slabbed could help get information out to help the retirees make informed decisions.  We’ve reached the inflection point. Updates will be posted beginning with the flying muck below the jump as time allows.

Update #1: Continue reading “What we have here is an ol’ fashioned bar fight”

Bad settlement first and Justice later?

I guess the root of my heartburn comes from the retirees ostensibly paying for all the legal fees in a breach of fiduciary duty case and folks, it was not the Singing River Retirees that did the breaching. The folks at SRHS Watch have some heartburn too:

Opinion: Reeves on the Hunt for Pension Plan’s “Real Killers” ~ SRHS Watch

Keep an eye peeled because they have some good stuff coming:

Forthcoming on SRHS Watch: Certus Labs, Ethics Laws

Let’s analyze the proposed SRHS settlement: The Trustee

Do we have a true settlement or a glorified cramdown on the SRHS pension crisis? Before I get to a few numbers and highlight the court case that I think ultimately controls the proper resolution of this disaster, we need to take a look at the person that Special Master Britt Singletary tasked about a month ago with overseeing the pension plan go forward, former Department of Public Safety Director Steve Simpson.

After nearly a year long fight to get the pension benefits they were promised, Tuesday a judge told Singing River Health System retirees they should sleep restfully from now on. Special Master Britt Singletary appointed an independent trustee, former Circuit Court Judge Steve Simpson, to oversee the pension. And he said an announcement of a settlement deal between the health system and retirees is close at hand.

“What we believe was the root of a lot of the problem was there was nobody on behalf of the pension holders or the pension members to look out for their interest alone,” said Jim Reeves, who represents some of the retirees. “Now we have that person in place who is a watchdog, so to speak, for the pension holders.”

April Havens gave us even more background on Simpson:

Simpson, a Gulfport attorney who focuses on civil litigation, defense, governmental affairs and lobbying, premises liability defense, personal injury defense and criminal defense, is also a former Mississippi Public Safety Commission member.

The decision to put Simpson at the helm of the pension plan was made Tuesday during a hearing before Special Master Britt Singletary in Pascagoula.

“Singing River Health System and certain plaintiff’s attorneys have agreed to an order governing the administration of the retirement plan and trust,” SRHS attorney Brett Williams said.

Between the two accounts, anyone that did not previously know Mr. Simpson now understand that his background is impressive:

  • A lawyer that “focuses on civil litigation, defense, governmental affairs and lobbying, premises liability defense, personal injury defense and criminal defense”
  • Appointed by former Governor Haley Barbour as head of the Mississippi Department of Public Safety
  • A former Harrison County Circuit Court Judge

I am just guessing but to the extent litigation and in particular agreed orders inherently involves a negotiating process there is a good chance Mr. Simpson was a compromise choice. The public may never know the answer to the how the parties settled on Simpson but to me the real question is whether or not he is qualified to be a pension trustee. My personal opinion is not and by implication I think it is more likely than not that once again the cost of the bad decision making will be borne down the line by the SRHS pension plan participants.

It would not be fair for me to leave it at that but before I lay out why I think Mr. Simpson is not the right choice, what do the folks over at SRHS Watch think? That interactive website is heavily trafficked by retirees so the commentary is going to reflect some of what the group as a whole is thinking. The analysis is brutal but I think it is also reflective of a growing frustration among the retirees that has reached the boiling point: Continue reading “Let’s analyze the proposed SRHS settlement: The Trustee”

What is Singing River Health System and the Jackson County Board of Supervisors Hiding? A comment bump

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: Continue reading “What is Singing River Health System and the Jackson County Board of Supervisors Hiding? A comment bump”

“No one can serve two masters…” A SRHS Conflict of Interest Series Part 1

No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.

Slabbed has gone biblical since our Singing River coverage became a hit over in Jackson County with the scripture quoting CEO set there. After all ancient wisdom is the best kind of wisdom thus the post title. All these months later the exact same glaring conflicts of interest still exist with the pension plan. After failing to secretly terminate the pension plan the political set in Jackson County is still searching for an ever elusive financial solution to the ailing finances of the Singing River Health System. Throughout the pension trust has been SRHS management’s captive.

I start today with the conflict of interest on display for all to see as I highlight new SRHS Board of Trustee member Scott Taylor’s first blog post. Taylor’s appointment to the hospital Board of Trustees puts him fundamentally in an interest conflicted position to the financial interest of the pension trust which the Trustees now control. The comments, especially those by Cisco Aguilar, are well worth reading.

In Part 2 Slabbed will examine the underlying litigation and some possible paths out of the financial quagmire.

A few keys to understanding Singing River Hospital disaster: Part 1

I’ve followed the unfolding Singing River Hospital financial disaster from afar and thus far have managed to not look at a single audit or financial report as I’m currently neck deep in paying work.  That said I have seen woeful misinformation spread about Defined Benefit Pension Plans during the course of the reporting.   Defined Benfit plans, if properly run, can still be an excellent and cost effective employee benefit and it is there we begin because many have been looted out and then dumped on the taxpayers:

Looting the Pension Funds ~ Matt Taibbi

‘Retirement Heist’: How Firms Trimmed Pensions ~ Interview with former WSJ Reporter Ellen Schultz, WTEST

At Singing River Hospital, the pension fund was not looted. Instead it was simply not funded by the hospital to the point now where management now claims that the plan is actuarially unsound. The implications of not funding a qualified defined benefit plan, which likely had mandated minimum funding requirements, are legion.

For instance, when most people think of qualified pension plans they think IRS, because it is the IRS that writes the regulations for plan qualification and actually approves the plans both when they are established and terminated. However it is not the IRS that Singing River Hospital needs to worry about in this instance as it is the Department of Labor, specifically the Employee Benefits Security Administration that would handle the potential ERISA violations associated with the media disclosures involving the Singing River defined benefit plan and that is the bad news because while the IRS “audits”, the DOL “Investigates”.  Having handled a DOL Investigation once or twice in my time practicing public accounting, I can say first hand it is far better to have the IRS show up than the DOL when it comes to this subject matter.

All that said the Singing River financial debacle could keep an enterprising business writer busy for weeks as the ramifications of seeing yet another defined benefit pension plan crash and burn are literally legion.  Here are a few things that come to mind: Continue reading “A few keys to understanding Singing River Hospital disaster: Part 1”