4 years ago

How an Alabama state employee built a billionaire’s lifestyle in a taxpayer-funded job (opinion)

Retirement Systems of Alabama CEO David Bronner (Photo: Wikicommons)
Retirement Systems of Alabama CEO David Bronner (Photo: Wikicommons)

According to Forbes Magazine, Alabama is currently home to exactly zero billionaires. But if you spent a day with the state’s highest paid government employee, you might assume Forbes must have overlooked something.

Dr. David Bronner has been Chief Executive Officer of the Retirement Systems of Alabama (RSA) for over 40 years. From a palatial office overseeing downtown Montgomery, Bronner manages the pension fund for employees of the state of Alabama, including teachers. Through some early successes and some crafty propaganda — much of it published in the RSA’s own newsletter — Dr. Bronner’s reputation as an investment wizard has endured, even as his pension fund has deteriorated to the point that Alabama taxpayers are compelled to contribute roughly $1 billion per year to prop it up.

A research paper published by the Alabama Policy Institute last year estimates that the collective Retirement Systems of Alabama (RSA)—the Teachers Retirement System (TRS), Employees Retirement System (ERS), and Judicial Retirement Fund (JRF)—have $29.4 billion in assets, and $44.6 billion in liabilities.

In other words, the RSA is short for current and future retirees by $15.2 billion.

According to the paper, between 2003 and 2013 the unfunded liability for the RSA grew from a manageable $2.1 billion to the $15.2 billion it is today—putting each of Alabama’s 4.8 million residents on the hook for $3,166, or $8,724 per household.

“This massive $13.1 billion increase in RSA’s unfunded liability equates to an increase of over $1.3 billion per year, $109 million each month, or nearly $4 million for each day that elected officials did nothing to fix this problem,” the paper detailed. “For a bit of perspective, the total current debt outstanding for the entire State of Alabama (every public school building, every public college or university, every road or bridge, every economic incentive, the Port Authority, Mental Health, the Revolving Loan Fund, the Tobacco bonds, all of the state’s general obligation and revenue bonds) is only about $8.8 billion or $4,786 per household.”

This year alone, the state must send nearly $1 billion to the RSA, or 12 percent of the education and general fund budgets combined, making retirement systems contributions the second largest budget item after education.

RSA has dismissed the study as fear mongering. But the fact remains that RSA’s investment returns are not high enough to keep up with its obligations.

In the midst of it all, Dr. Bronner has built for himself a lavish lifestyle that far exceeds his roughly $600,000 taxpayer-funded salary.

An avid golfer, he has used RSA funds to build golf resorts around the state, which lose roughly $20 million per year. Resort employees told Yellowhammer on condition of anonymity that Dr. Bronner is a frequent and demanding guest in the hotels’ priciest suites.

Dr. Bronner has dismissed the financial losses by saying the golf courses and resort hotels attract tourism dollars to the state that are not directly reflected in their bottom line. Critics have responded by saying that even if that is true, it is his job to get the largest return possible for state employees, not to use their pension fund as an economic development loss leader.

Grand National on the Robert Trent Jones Golf Trail in Opelika, Alabama
Grand National on the Robert Trent Jones Golf Trail in Opelika, Alabama

The golf courses’ logo also appears on two private jets that Dr. Bronner uses to travel all over the country, rather than flying commercial.

Yellowhammer asked RSA General Counsel Leura Canary for flight logs on the jets.

“RSA does not own any jets and consequently has no flight logs,” she replied.

When pressed to explain the use of the jets, Mrs. Canary said they are owned by RSA investments Raycom Media and CNHI. She also provided an opinion from the state Ethics Commission that said Dr. Bronner traveling on the plane is “analogous to using a state car for business travel.”

Yellowhammer replied by pointing out that if traveling on the plane is the same as using a state car, as the Ethics Commission wrote, then travel records should be made available to the public. They are not.

“Additionally, why not fly commercial — even if it’s business class?” Yellowhammer asked. “The cost per variable hour on those planes as $2,639.41. That makes a trip to NYC (approximately) $15,000 or a flight to Palm Beach $8,000. Meanwhile, the rest of us could fly to NYC for $400.”

Mrs. Canary’s response was that, “The flight logs of a private corporation are not subject to the Open Records Act.”

She also insists that flying private actually saves RSA and its investments money.

“Raycom and CNHI have fixed costs for operating and maintaining the aircraft. The pilots are on salary and are paid regardless of whether they are flying. Maintenance and other associated costs are also fixed. Therefore, the only significant incremental cost to use the aircraft is fuel,” she explained. “(A)lthough I do not have enough information to perform a thorough economic analysis, it is safe to say that the savings in airfare, travel time and related hotel, rental car and other expenses for several people would have covered the cost of fuel. More importantly, the ability of RSA to use corporate aircraft for travel has generated significant travel expense savings to RSA. These savings would more than offset any expenses to RSA investments.”

2000 Hawker 800XP, the type of jet aircraft used by the RSA.
2000 Hawker 800XP, the type of jet aircraft used by the RSA.
Interior of a 2000 Hawker 800XP, the type of jet aircraft used by the RSA.
Interior of a 2000 Hawker 800XP, the type of jet aircraft used by the RSA.

It is difficult to fathom how there could actually be cost savings involved with flying around the country in a private jet. Saying the cost per hour to operate the planes is lower because the pilots are on salary is technically accurate, but it is hard to see how it can be spun as a cost savings when compared to flying commercial and not having salaried pilots on standby.

The only way this is plausible is if the time of the individual(s) riding on the plane is worth more than the additional time that would be spent flying commercial.

For instance, an analysis of Warren Buffett’s income from 2013 showed that he made roughly $1.54 million per hour — even when he was asleep. In his case, the additional time spent going through TSA and waiting on a commercial plane would literally lose him money when compared to flying private, because his time is worth just over $25,694 per minute.

And now we get to the root of the issue: Dr. David Bronner views himself as a peer of Buffett and other billionaires who made their fortune and reputation in the private sector, and he operates as if he is entitled to their lifestyle.

He recently name-dropped billionaires Charles and David Koch and Donald Trump in a speech to the Alabama State Employees Association.

“The Koch Brothers are dead ass serious about taking away your pension and cutting your healthcare,” he said.

Of Mr. Trump, he quipped, “I know the bastard, he ain’t worth anything.” (View the video of his remarks here.)

Here are the facts:

The RSA’s investments will return about 1% this year. The golf courses lose about $20 million per year. Alabama taxpayers are forced to contribute roughly $1 billion per year to the system to keep it afloat.

Meanwhile Dr. Bronner is traversing the country in private jets and spending his time in luxury hotel suites and on golf courses funded by RSA investments, and dolling out bonuses to his investment staff ranging from $3,371 to $51,199.

His explanation for the bonuses was that they were necessary to keep his employees from leaving for the private sector.

“They’ll stay awhile and they start getting hungry for the real big dollars and they leave me,” he said. “So we came up with a method.”

So why isn’t Dr. Bronner any different? He is making just shy of $600,000 per year. Couldn’t he make much more if he jumped to the private sector?

Perhaps.

Instead he opted to build a billionaire’s lifestyle without the risk of doing it in the private sector, where 1% returns wouldn’t buy the jets and all the fancy resorts.

The Alabama legislature is currently wrestling with much-needed reforms to the state’s public pension system, and some lawmakers are considering legislation that would make the RSA a much more open and transparent entity.

Such reforms should be no-brainers for the Republican supermajority.

RELATED:
RSA CEO David Bronner unloads on Alabamians for opposing tax hikes and ObamaCare (Video)

13 hours ago

Alabama’s Warrior Met Coal announces historic Blue Creek mine development

Brookwood-based Warrior Met Coal on Wednesday announced that they will begin development on a new “world-class” longwall mine near its existing mines located on the Blue Creek reserves in West Alabama.

Met coal is the type of coal sometimes referred to as coking coal. Unlike the thermal or steam variety, met coal is used as a vital ingredient in the steelmaking process instead of being utilized for power generation.

The new Blue Creek development is expected to have the capacity to produce an average of 4.3 million short tons per annum of premium High-Vol A met coal over the first ten years of production. It is one of the last remaining large-scale untapped premium High Vol A met coal mines in the U.S.

“We are extremely excited about our organic growth project that will transform Warrior and allow us to build upon our proven track record of creating value for stockholders. Blue Creek is truly a world-class asset and our commitment to this new initiative demonstrates our continued highly focused business strategy as a premium pure-play met coal producer,” Walt Scheller, CEO of Warrior Met Coal, said in a statement.

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The company expects to invest approximately $550 to $600 million over the next five years to develop Blue Creek with expected spending this year alone of approximately $25 million to kickstart the project.

Based on the current schedule, Warrior Met Coal expects first development tons from continuous miner units to occur in the third quarter of 2023 with the longwall scheduled to start up in the second quarter of 2025.

The company trades on the New York Stock Exchange and as such must report specific financial details on the project. This included the company projecting a “net present value” of “greater than $1 billion over the life of the mine with a projected after-tax internal rate of return (IRR) of nearly 30% and an expected payback of approximately two years from initial longwall production.”

Warrior Met Coal previewed this project at a Yellowhammer News event in 2019.

RELATED: Study: Alabama coal industry has nearly $3 billion impact; met coal reserves to last centuries

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

13 hours ago

‘Gender is Real Legislative Act’ advanced by Alabama House committee

MONTGOMERY — The Alabama House State Government Committee on Wednesday advanced the “Gender is Real Legislative” (GIRL) Act.

The bill, HB 35, is sponsored by State Rep. Chris Pringle (R-Mobile). Pringle is the chairman of the committee. The vote on Wednesday was 8-4 on party lines in favor of giving the legislation a favorable report. The GIRL Act now heads to the full House for consideration.

HB 35 would require Alabama public schools to make sure every entrant in an athletic competition is sorted by the gender on their birth certificate. The bill also forbids any state, county or municipal government/agency from providing a facility to a single-gender competition that allows a transgender entrant.The GIRL Act exempts any event that is specifically designed to have both boys and girls as competitors.

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“Gender is real. There are biological differences between boys and girls that influence athletic performance. The GIRL Bill seeks to support female student-athletes, so that they may compete against each other and not have to compete against male students with an unfair advantage,” Pringle has stated. “Liberal Democrats are always trying to accuse us of refusing science, but gender is a real biological truth. It truly defies logic that anyone would deny science and want male students to compete in female sports.”

During Wednesday’s meeting, a first-grade girl from the Birmingham area called on the committee to support the bill. The girl said it was only “fair” that student-athletes be sorted by the gender on their birth certificate and that she not have to compete against boys.

A full public hearing was held on the legislation last week, when State Rep. John Rogers (D-Birmingham) made some interesting remarks about Auburn legend Cam Newton while speaking against HB 35. Rogers in a subsequent interview then called for mandatory genetic testing of all public school student-athletes.

Pringle is currently running in the competitive Republican primary race for Alabama’s First Congressional seat being vacated by U.S. Rep. Bradley Byrne (R-Fairhope).

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

14 hours ago

Jessica Taylor ‘appalled and disgusted’ at Doug Jones’ abortion comments — ‘He is unfit’

Senator Doug Jones (D-AL) once again finds himself in a negative spotlight back in his homestate.

Jones was caught in a video on Wednesday laughing about abortion and mocking a question about the Pain-Capable Unborn Child Protection Act.

Jessica Taylor, a conservative Republican candidate in Alabama’s Second Congressional District, reacted strongly to Jones’ remarks.

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In a statement to Yellowhammer News, she said, “As a Christian, and as a mother, I am appalled and disgusted that Doug Jones would act this way.”

“Defending the unborn has been a pillar of my campaign since day one,” Taylor continued. “Doug Jones’ blatant disregard for the rights of the unborn further demonstrates that he is unfit to represent us in Washington. Pro-life values are Alabama values. As a conservative, I will always fight for our Alabama conservative values in Congress.”

Taylor has been endorsed by the prominent national pro-life group Susan B. Anthony (SBA) List in her AL-01 primary bid.

SBA List also bashed Jones’ latest comments in a separate statement.

“Senator Doug Jones has proven once again that he is no moderate when it comes to abortion on demand through the moment of birth. Alabama’s Democratic senator may think it is ‘stupid’ to question his abortion extremism, but rest assured, his constituents take respect for human life very seriously,” stated SBA List president Marjorie Dannenfelser.

“With a record of voting in favor of late-term abortion more than halfway through pregnancy and forced taxpayer funding of abortion, Sen. Jones has repeatedly betrayed Alabamians, siding with the radical abortion lobby and fellow extremist Democrats in Congress,” Dannenfelser concluded. “Their agenda is dramatically out of step with the people of Alabama and the strong majority of Americans – including 55 percent of Independents and 43 percent of rank-and-file Democrats – who support compassionate limits on abortion after five months of pregnancy, when science clearly shows unborn babies can feel excruciating pain. If Senator Jones refuses to protect innocent unborn children, he won’t be laughing come Election Day.”

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

14 hours ago

Reading aldotcom in large doses might affect your perspective, cognitive abilities and reasoning skills

How out of touch are al.com’s employees?

Very.

Read John Archibald or Kyle Whitmire any day and you will get that answer. These guys have been railing on Alabama government for years, and even they would tell you that they have done a pretty poor job of convincing anyone that their positions are the way the state should go.

To describe them as failures is an insult to actual failures like Hillary Clinton, who al.com obviously endorsed before she was obliterated by Alabama voters.

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So, it should come as no surprise that the average readers of al.com are equally as out of touch with the average Alabamian because they are consuming a daily digest of anti-Alabama liberal media bile that could best be described as irrelevant and antagonistic to the politics and culture of the state of Alabama.

Former Yellowhammer News editor-in-chief Cliff Sims said it best when he called them a sports blog with a liberal bias.

Because of this, it should come as no surprise that they are attempting to pass off an online poll of their readers as representative of anything close to the opinion of the state of Alabama, but here you go.

Actually, it doesn’t seem like that at all. Even Ramsey Archibald knows that.

Nationally, according to a Pew Research poll in late 2019, 69% of Americans favor some kind of legalization of marijuana. Of those who want to legalize marijuana, 59% want recreational and medical legalization and 32% want just medical legalization.

That’s a national poll — this is Alabama.

Love it or hate it, like the employees at al.com do, you have to acknowledge that there is nowhere near 83% support for recreational marijuana in this state.

Instead of legalizing marijuana, we might want to consider limiting the consumption of al.com for some of their readers whose brains are clearly being damaged by the content.

All polls like this do is show that the readership of al.com is far-left, out-of-touch and completely irrelevant in Alabama politics — just like the authors they read.

Dale Jackson is a contributing writer to Yellowhammer News and hosts a talk show from 7-11 am weekdays on WVNN.

15 hours ago

2020 Mardi Gras ships to be docked in Mobile February 21-26

The ships docked in Mobile for the 2020 Mardi Gras celebration will be the USS MCFAUL and the USCG CUTTER GANNETT, per an announcement from the Alabama State Port Authority on Wednesday.

The two ships will berth at GulfQuest on South Water Street in downtown Mobile. The USS MCFAUL is scheduled to arrive on February 21 at 11:00 a.m., and the GANNET is set to arrive on February 24 at 9:00 a.m.

Both ships will be available for touring by the public. The MCFAUL from February 22-25 and the GANNET on February 25-26.

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The MCFAUL is an Arleigh Burke-class destroyer, the 24th of its kind in the U.S. Navy. Her commanding officer is Commander Rusty J. Williams. The ship gets her name from war hero Petty Officer Donald L. McFaul (1957–1989).

The GANNET is a Protector-class Coastal Patrol Boat manned by the U.S. Coast Guard. When she is not being toured by the public, the GANNET protects America’s coastal waters and fisheries after launching from her homeport in Mobile.

Full information for the public tours included below as a courtesy of the Alabama State Port Authority and the United States Navy:

USS MCFAUL (DDG 74) Welcome Ceremony and Public Tours Info

  •   Welcome Ceremony:  11:00 am, CST, Friday, February 21, 2020. Alabama State Port Authority, Pier 2.  Gates open at 9:30 am (CST).
  •   Public Tours:  February 22-25, 2020 between the hours of 8:30 am – 11:00 am and 1:00 pm – 4:00 pm (CST) Pier 2 Terminal, downtown Mobile, Ala.
  •   The gate entrance is located on the north side of the Mobile Convention Center on Water Street, Downtown Mobile, Ala.
  •   The Public is welcome, but all visitors are required to wear closed toe/heel shoes and carry valid identification.  All guests will undergo security screening prior to entry to the facility.

USCGC GANNET Public Tours Info

  •   GANNET will moor at 9:00 am (CST) on February 24, 2020 at the GulfQuest Maritime Museum, 155 S Water Street, in downtown Mobile, Ala.
  •   Public Tours: February 24 between the hours of 11:00 am and 3:00 pm (CST), and February 25-26 between the hours of 10:00 am and 3:00 pm (CST).
  •   The Public is welcome, but all visitors are required to wear closed toe/heel shoes and carry valid identification.

Henry Thornton is a staff writer for Yellowhammer News. You can contact him by email: henry@yellowhammernews.com or on Twitter @HenryThornton95.