Let’s Recoup our Pension Fund & Investment Losses from Wall Street & Washington

I owe you guys HOW much?

A couple of San Mateo area Congresswomen and the County of San Mateo seem to be ahead of the curve in fixing responsibility for pension fund and other local government investment losses on Wall Street and lax federal oversight and going after the money to help cover those loses.

Congresswoman Ana Eshoo of Palo Alto has introduced legislation that would authorize the U.S. Treasury Secretary to compensate jurisdictions hurt by the Lehman Brothers Bankruptcy by reallocating some of the billions used to bailout failed banks as those banks repay the money. According to a story in the San Mateo Daily Journal, Eshoo’s bill is called the Restitution for Local Government Act of 2010. The article says that her legislation would help 40 municipalities nationwide that lost $ 1.7 billion in Lehman Brothers investments.

Fellow Congresswoman Jackie Speier is reported in this article as apparently supporting Eshoo’s effort. The Vice-President of the San Mateo County Board of Supervisors is quoted as saying this legislation is creative and worthwhile. San Mateo County reportedly lost $ 155 million.

It is believed that Lehman Brothers engaged in unethical bookkeeping practices to inflate their profits and misled investors, according to a bank examiner’s findings reports the Daily Journal article, and San Mateo County officials believe the federal SEC (headed by Orange County’s own Chris Cox during the Bush Administration) and the U.S. Treasury looked the other way and compounded the problem.

With state and local government reeling from budgetary problems it makes sense that Wall Street firms that misled and deceived, and the federal regulators who failed to act, should help make local government, including retirement funds, whole for their victimization.

A smoking gun about this federal laxity hit the news waves on Friday, April 23 in reports the federal Office of the Inspector General released a report that documents that several SEC employees, including a Senior Attorney and an Accountant both making six figures, spending hours a day surfing for porn on their federal computers instead of being on top of things like what Wall Street was up to.  This report said the Senior Attorney, who drew a salary of around$ 200,000 a year, spent 8 hours a day on his fedeal computer doing this!   So much for the Chris Cox legacy.

Taxpayers, employees and retirees of local government in California have been victimized by Wall Street firms through deceptive and in some cases dishonest practices. Those firms may have been robbing the bank, but the lax federal oversight places the federal agencies in the driver’s seat of the getaway car.

Orange County local government agencies should support Eshoo’s efforts and leave no stone unturned to recoup investment losses incurred here while expressing outrage at having been victimized. Our local leaders owe that to the taxpayers, government employees and retirees here.

About Over But Not Out

A retired Orange County employee, and moderate Republican. The editor seriously does not know OBNO's identity as did not the former editor, but his point of view is obviously interesting and valued.