3 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)

12 mins ago

‘The American Taliban’ released early from federal prison over objections of Alabama officials, Spann family

John Walker Lindh, a.k.a. “The American Taliban,” on Thursday was released years early from federal prison, despite the objections of Senator Richard Shelby (R-AL), President Donald Trump, the entirety of the Alabama legislature and the family of Johnny Micheal “Mike” Spann, who was an Alabamian and the first American known to be killed in “The War on Terror” in Afghanistan after 9/11.

After being captured in Afghanistan in 2001, Lindh pled guilty to serving as a soldier of the Taliban. He was sentenced to 20 years in a federal penitentiary in 2002 for his role in the death of Spann, a Winfield native and Auburn University alumnus then serving as a CIA officer.

Lindh was released prematurely from federal custody in Indiana on Thursday. As of a 2017 Foreign Policy article, Lindh still intended to spread terrorist ideology upon his release from prison.

CNN has reported that Lindh will live in Virginia under set restrictions.

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Alison Spann, the late Alabamian’s daughter, recently wrote a letter to the president calling Lindh’s early release “a slap in the face — not only to my father and my family but, but for every person killed on Sept. 11th, their families, the U.S. military, U.S. [intelligence] services, families who have lost loved ones to this war and the millions of Muslims worldwide who don’t support radical extremists.”

In an interview with Fox News, U.S. Secretary of State Mike Pompeo condemned Lindh’s early release as “unexplainable and unconscionable” and followed Shelby in calling for a review of prison system policies.

Restrictions placed on Lindh, according to the Associated Press, include that “Lindh’s internet devices must have monitoring software; his online communications must be conducted in English; he must undergo mental health counseling; he is forbidden to possess or view extremist material; and he cannot hold a passport or leave the U.S.”

His release came only a day after NBC reported that Lindh, in a letter to a producer from Los Angeles-based affiliate KNBC, wrote in 2015 that the Islamic State group is “doing a spectacular job” and “is clearly very sincere and serious about fulfilling the long-neglected religious obligation to establish a caliphate through armed struggle.”

Yellowhammer News on Wednesday learned that Congressman Bradley Byrne (AL-01) imminently will file legislation to ensure convicted terrorists like Lindh are never released early from federal custody in the future.

On Lindh, Byrne has tweeted, “This man was held responsible for the horrific death of an Alabama CIA officer, and now he is getting out of jail early for good behavior. This is just so wrong!”

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

53 mins ago

Huntsville Hospital lets children drive toy cars into surgery, goes beyond medical care

Huntsville Hospital is helping kids with much more than their medical needs.

WHNT on Wednesday reported, “Hospitals can be a scary place for anyone, but especially for kids. Huntsville Hospital has child life specialists whose sole job is to help the children there beyond their medical needs. Making a trip to the hospital, not only bearable but even fun.”

One of the favorite features for young patients at Huntsville Hospital is that children are allowed to drive toy cars right into surgery.

Additionally, the hospital waiting room has become more like a game room, with interactive games projected onto the floor for kids to play with while waiting.

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“So this is kind of one of those things that keeps their mind off everything before they have to go back,” Haley Franks, a pediatric ER registered nurse, told WHNT. “Especially if they have any kind of procedures or anything they are able to kind of play out here in the lobby and have some fun while they’re waiting.”

This incredible child life department has been in Huntsville Hospital for over two decades.

“There are some kids that are excited to be here. There are some kids that are really really scared and don’t even want to come in the door, stand on the scale, put on a bracelet,” Michelle Barksdale, a child life specialist, said. “We have all developmental ages and ranges of emotions.”

Specialists like Barksdale are trained in child psychology and development to know how to meet the needs of every individual child.

She said the needs of kids are very different than adults. She said a lot of kids are concrete thinkers they need to see what the surgery room will look like, not just be told.

Barksdale explained that the famous toy car rides even come complete with a unique driver’s license for each child.

“That car is a transition piece from parents who they know, where they’re safe, to people who they don’t know in scrubs,” she added.

For the pediatric staff at Huntsville Hospital, this is a labor of love for those kids. Not only are they working to heal them, the staff truly cares about making kids feel better, too.

“It makes it easier on that transition for the parent as well as the child. Because they know the child is not scared, they’re not crying, they’re not leaving them in a fearful state,” Amanda Rochowiak, a pre-op coordinator, said.

Watch below or here:

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

1 hour ago

Watch: Mobile’s WKRG anchor Mel Showers signs off for the last time after 50-year run

On Wednesday, long-time Mobile television personality Mel Showers anchored his newscast after a 50-year tenure at WKRG, the market’s CBS affiliate.

Back in March, Showers marked his 50th anniversary with WKRG.

Showers was joined by his family as he signed off Wednesday’s 10 p.m. newscast.

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“Well, I would like to take just a few moments of your time tonight to say thank you,” Showers said. “I want to thank you for allowing me into your homes for the past five decades — first as a booth announcer, where you heard my voice more than you saw my face, then as a reporter and now as a news anchor. I was honored earlier today by the management and staff of Nexstar in a luncheon. Later today, my son and grandsons flew in from Dallas, Texas. It was a big surprise, and tonight, I want you all to see my family gathered here. I have sisters. I have nephews. I have nieces. I have granddaughters. I have their friends. And I have my WKRG family as well, as you can see them.”

“So, there’s a lot of love here involved in this studio,” he added. “And I want to thank you for tolerating me all these many years. Along with thanking you, I want to thank my family and my friends and my WKRG family, of course, many of whom are here tonight as you see. I will miss you. I love you and may God continue to bless all of you, every one of you. Look at that beautiful family.”

@Jeff_Poor is a graduate of Auburn University, the editor of Breitbart TV and host of “The Jeff Poor Show” from 2-5 p.m. on WVNN in Huntsville.

Episode 7: Surviving and thriving with photos and Frosties

Marshall and I share about a plane crash we survived; the characteristics that did or did not draw us to each other; our crazy engagement story; how important it is to communicate – always; how phases are not forever, but marriage is; and how sitting down to stare at your early relationship photos can save your marriage.

>Challenge today: Why did you fall in love in the first place? Have some fun together reminiscing about the great moments in your relationship and never stop learning about the wonderful parts of your partner!

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3 hours ago

State Sen. Chris Elliott: ALDOT Mobile I-10 Bridge $6 toll proposal ‘politically unfeasible,’ Project scope could be reduced

Wednesday during an appearance on Mobile radio’s FM Talk 106.5’s “Mobile Mornings,” State Sen. Chris Elliott (R-Daphne) said there could be changes ahead to the Alabama Department of Transportation’s proposal for a new I-10 Mobile Bayway Bridge, which as of now has toll that could be as high as $6 each way for vehicles.

Elliott said unless money came from other sources, be it the state or federal government, considerations to narrow the scope of the project could be underway.

He called the current ALDOT “politically unfeasible” and said the target for the toll is in the $2 range.

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“I think they are hearing the rancor from the proposal from the State Department of Transportation garnered and understand that the current proposal – that six-plus-dollar toll each way is just completely politically unfeasible. And they get that. And through my conversations with them, I think they have taken a step back. They are getting actively involved in what heretofore was a process being almost exclusively led by ALDOT, and saying, ‘OK, look guys – this isn’t going to work. We’re going to have to come up with another solution, and that’s where we are right now.”

Elliott offered a couple of options, one of which was increasing the public subsidy for the toll “significantly,” which would be in the amount of “hundreds of millions,” which he said would be gas tax revenue that would be bonded out into the future.

“The other, and I think perfectly valid way to look at it is, look at project scope – what parts can we simply afford and what parts can we just do without?” Elliott said. “Do we need to look at not doing the Bayway portion? Do we need to look at augmenting the Causeway and just doing the bridge? What parts do we need to do and what parts do we not need to do?”

“Then the other is continuing to work with our federal partners to see what, if any, help is there,” he added. “Mayor [Sandy] Stimpson and I have been in conversation about that recently. You know, we got this infrastructure grant that’s pending right now. There’s talk of an infrastructure bill in Washington.”

The Baldwin County Republican explained how the federal portion was only 7%, assuming the feds came through with the entire requested grant, which is not guaranteed he said. He said two of the distinct options were not building anything at all or accepting the entire proposed, neither which he said were options.

“I’m for trying to get something done that is palatable and reasonable,” Elliott said. “And I think the governor’s office, from what I’m hearing in our discussions with them, they’re up for that as well. It’s time to take a step back and say, ‘Look ALDOT, the proposal you have on the table is completely unreasonable. And we need to rein it in and figure out what can we do and what can we afford.”

Elliott said he expected the “tolerable number” for a toll would be in the “$2 range.”

@Jeff_Poor is a graduate of Auburn University, the editor of Breitbart TV and host of “The Jeff Poor Show” from 2-5 p.m. on WVNN in Huntsville.