It was a gray Saturday afternoon, one week after the pension controversy had exploded, and County Executive F. Thomas Ament wasn’t feeling great. He was home watching a wild-card play-off game when I phoned, but his mind wasn’t on football. “It’s not much of a game,” he said grimly. Tampa Bay was getting crushed by Philadelphia and Ament was taking an even worse pounding from the media. Nothing in 34 years of government experience had prepared Ament for the blitzkrieg against his mega-bucks pension plan.
I had called for a response to one quick question, but Ament wouldn’t let me go. He sounded shell-shocked and lonely, tightly wound yet unfocused, and seemed to be grasping for something to say that would somehow make me and perhaps the community understand how we had misjudged him. On the other end of the phone was a human being who was drowning and reaching out for something, anything that would save him. “This may sound weird, since I’m the source of all your ills,” I said, “but the way the media’s been ganging up, I’ve been feeling sorry for you.”
There was a pause, and then Ament spoke. “Well, then, quit piling on.”
In the weeks since the pension story erupted, Ament’s supporters have attested to his integrity, doubting that this thrifty, unflashy man would deliberately create a plan that so enriched him. County fiscal analyst Terry Kocourek, who’s worked under Ament for decades, says the county exec has never been about money. “He drives a Ford Escort. If he has three suits, that’s probably a lot.”
Even former County Executive Dave Schulz, a sometime foe of Ament, echoes that theory: “This is a guy for whom it means more to sit in that office than any conceivable amount of money.”
But at the risk of piling on poor Tom again, I must disagree. A review of the county’s internal documents and an analysis of how the pension plan passed leads to one possible conclusion: Ament wanted money, lots of money, for himself and his subordinates. Gary Dobbert, former director of human resources, worked in close consultation with Ament and deliberately modified the plan to bring the most money to county veterans like them.
Discussions began in earnest in April 2000, after Ament’s re-election, when the pension fund was awash in money. “I think we all felt very rich because the fund had done so well,” says Supervisor Mark Borkowski.
Dobbert’s early memos to Ament included a proposal to allow veteran employees to get an annual pension equal to 90 or even 100 percent of their final average salary. This was a radical change in county government, which had always barred employees from getting more than 80 percent of their final salary.
To get around this, Dobbert created a plan that technically left people at 80 percent but then applied a 25 percent increase on the back end – not when computing their years of service but in figuring their final average salary. The net effect: Dobbert, Ament and all other employees who started before 1982 could collect 105 percent of their final average salary, directly contradicting a county ordinance still on the books.
The 25 percent increase is contained in numerous memos and is understandable to anyone who has mastered the seventh-grade skill of figuring percentages. Ament was then earning $125,000, and his salary, by previous ordinance, would rise to $168,000 by 2008. Even at the old standard of 80 percent, Ament would have gotten an annual pension payment of $149,000, plus paid-up health insurance for life.
But Ament opted for 105 percent, which would increase his annual pension to $186,000 a year, far more than retired American presidents, who get a mere $166,700 a year (and no paid-up health insurance for life).
To help finance this magnificent benefit, the memos show that Ament rejected an idea to provide a 3 percent cost-of-living increase in the pension payment for retired county workers, which would have cost $1.85 million per year. They would get nothing. The administration also dumped a proposal to give every employee a lump-sum pension payment of $1,000 for every year worked.
This latter idea would have treated all employees equally regardless of their salary level. For Ament, who would have 40 years of service by 2008, this would have yielded a lump-sum payment of $40,000. Instead, Ament and Dobbert selected the backdrop plan, which was skewed to offer the best benefits to those with the highest salaries and the longest terms of service. Ament now says his lump sum could be cut back to $641,000 because of IRS rules, but independent actuary Joan Gucciardi says that even with this rule, Ament could have still collected $2.3 million if he served until 2008.
Ament has said he didn’t understand the backdrop. But as supporter Terry Kocourek concedes, “This guy grinds through the budget; he wears us out. He knows his stuff.”
Ament was given a one-page memo explaining how backdrop worked. A PowerPoint presentation prepared by Dobbert spells out the interest earned. Ament knew he had been eligible for retirement in 1995 and could get 105 percent of his final average salary from that time. If he served until 2008, the plan would store up 13 years worth of pension payments growing by 8.5 percent monthly compounded interest. In an interview with WISN-AM’s Mark Belling, Ament has since admitted that he thought the lump sum would be at least as high as his annual salary but less than $500,000. Considering that the county executive was already guaranteed a better pension than American presidents without the backdrop, that does seem a bit greedy.
The Ament administration never asked the county audit department or controller Scott Manske (Department of Administration) to analyze the plan. The process was dominated by Dobbert, a longtime loyalist who never acted without the county executive’s approval. Supervisor Roger Quindel says Dobbert was the operative who implemented Ament’s system of cronyism, placing “inappropriate” people in various government positions as rewards for their loyalty to the county executive.
This cronyism had drawn the suspicion of Supervisor Robert Krug, head of the County Board’s personnel committee. “Krug asks a lot of questions; he’s very detailed,” says Quindel. “He can be a pain in the ass. It is highly unlikely that he wouldn’t have caught [the pension plan payouts].”
But Krug wasn’t there. County Board Chair Karen Ordinans admits that Dobbert and key Ament aides asked her to replace Krug. She will not discuss her reasons for doing so, but she replaced Krug with Supervisor Kathleen Arciszewski, who seems to have been in over her head. When asked why a 25 percent pension hike was needed, Arcis-zewski suggests that it was the job of others to question this. “To me, wouldn’t somebody have said, ‘Well, couldn’t it be lower?’ ”
The personnel committee passed the plan very late, just one week before the full board took it up as part of a much larger budget package, giving supervisors little time to study it. Ament’s labor negotiator, Henry Zielinski, told board members that the generous pension benefits were needed to get the unions to agree to lower wages. “The unions hated him. He was always trying to nickel-and-dime them,” Quindel says. “So the mentality was, if Zielinski was behind this, it couldn’t be a giveaway.”
But in fact, Ament and Dobbert were pushing for approval of the package for non-represented workers like themselves before the union negotiations had even begun. Ordinans says this was so unusual that she asked Ament for an explanation. Yet she, too, accepted Zielinski’s word that the benefits package was part of a negotiating strategy. In fact, union leaders were stunned by what was offered.
The deal also offered sweeteners for newer employees. All but three board members had started after 1982 and had always gotten 2 percent of salary credit per year toward their pension, compared to 2.5 percent for old-timers. This package would bring them equity (while adding yet more goodies for veterans), which was another inducement to vote yes. “You like to think you’re as good as the guy across the hall,” admits Quindel.
Ament, moreover, was so all-powerful he could get a majority of supervisors to vote yes on nearly anything he wanted. “You had this administration that saw themselves as politically impregnable,” says Schulz. “Tom had a small circle of people around him for a long time cooking up deals in isolation.”
Beyond county government, there was no one to scrutinize the plan. The Public Policy Forum, which examines city and county budgets, did a report with not one word about the pension plan. The Journal Sentinel ignored it as well. Retired JS reporter Gretchen Schuldt, who covered the county for four years, says most of the paper’s mid-level editors live outside of Milwaukee County and have little interest in covering local government. As a result, she says, coverage of the county has declined significantly.
What the paper missed has turned into a political earthquake. Never in Milwaukee history has a county executive or mayor been recalled or had to resign. Besides Ament, seven supervisors have had recall efforts against them. Once squeaky-clean Milwaukee is suddenly blackened by a pension scandal that may be nationally unprecedented. “I think you’re going to have to rebuild the city’s image from the ground up,” says Schulz.
The fiscal consequences have yet to be fully assessed but are likely to be enormous. Adding to the problem is a proposed state budget that will decimate funding to Milwaukee County. Given the spending on pensions, Gov. Scott McCallum has made clear that the county has no grounds for complaint.
What could Tom Ament have been thinking? It was Ament who championed a proposal to raise the pay of supervisors to a full-time salary. When he started as a supervisor in 1968, he earned about $9,000, chicken feed for a lawyer like him. Ament went some years being underpaid and may well have felt that the county owed him extra compensation for his days in the wilderness.
Sometimes it’s the thrifty ones who are most concerned about piling up a fortune. Even after the recall signatures were piling up and Ament’s career was at stake, he would only revoke the backdrop. He couldn’t bring himself to sign a waiver of the 25 percent pension increase until he was hit with another wave of criticism. There seems little doubt about it. It was greed that led to Tom Ament’s downfall.
Bruce Murphy is a regular contributor to Milwaukee Magazine.
