5 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)

1 hour ago

Tuberville drops ad — Anyone who burns U.S. flag ‘should go to prison’

On Monday, the Tuberville campaign announced a new 30-second TV ad that highlighted his father’s World War II military service and calls for individuals who burn the American flag to be put in “prison.”

According to a release from the campaign, the ad will be airing on broadcast and cable stations throughout Alabama as well as digitally on social media outlets.

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Transcript as follows:

Tommy Tuberville walking through empty football stands and speaking into camera Tuberville: Hello, I’m Tommy Tuberville. I’m proud to have won a lot of big football games, but I’m prouder to be the son of a veteran.

My Dad was 18 when he stormed the beaches of Normandy, and we live in the greatest nation on Earth because of patriots like him.

I’ll stand with President Trump to keep American great, and anyone who burns this flag should go to prison.

I approved this message because in the Senate, I’ll donate my salary to the veterans of the great state of Alabama.

@Jeff_Poor is a graduate of Auburn University and the University of South Alabama, the editor of Breitbart TV, a columnist for Mobile’s Lagniappe Weekly and host of Mobile’s “The Jeff Poor Show” from 9 a.m.-12 p.m. on FM Talk 106.5.

3 hours ago

7 Things: RBG replacement fight looms, Jones pledges to stop Trump, no Labor Day coronavirus spike and more …

7. Tuberville holding a fundraiser in Florida

  • Former Auburn football coach Tommy Tuberville has been criticized throughout his campaign for U.S. Senate about how he moved from Florida to Alabama just to run for office, and now he’s holding a fundraiser in Florida. 
  • Monday, Tuberville will be holding a campaign fundraiser in Jacksonville, Florida. The Alabama Democratic Party executive director said this decision makes sense as it’s Tuberville’s “home state,” adding that “he still doesn’t understand the kitchen table issues that matter to Alabamians.”

6. Envelope to Trump contained ricin

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  • A letter to President Donald Trump and the White House is being investigated after it tested positive for the poison ricin. 
  • The FBI said that there’s “no known threat to public safety.” The FBI will be joined by the Secret Service and the U.S Postal Investigation Service in the investigation. 

5. Hurricane Sally cleanup could cost $19 million for Mobile

  • It’s been estimated that the cost of cleaning up after Hurricane Sally could cost $19 million, according to the Mobile County Emergency Management. 
  • This estimate just includes what local areas are likely to spend on road and bridge repair, utilities and debris removal. The final cost is expected to be higher. 

4. No coronavirus spike since Labor Day

  • Alabama health officials were concerned that Alabama could see a spike in coronavirus cases after the Labor Day holiday, similar to spikes seen after Memorial Day and Independence Day. 
  • Thankfully, there hasn’t been a spike in coronavirus cases after almost two weeks, as coronavirus cases and hospitalizations have leveled out and slowly declined throughout the state. 

3. Ruth Bader Ginsburg passes

  • At 87-years-old, U.S. Supreme Court Justice Ruth Bader Ginsburg passed away after a battle with pancreas cancer. She was the second woman ever appointed to the court in 1993 by President Bill Clinton. 
  • In a released statement by U.S. Senator Doug Jones (D-AL), he spoke about her career and legacy, saying that “she inspired generations of young women to reach for heights that previously felt impossible.” U.S. Senate candidate Tommy Tuberville spoke similarly of Ginsburg, stating, “She fought hard for her beliefs and carried the respect of her fellow justices, liberal and conservative alike.”

2. Jones fundraising email mentions Ruth Bader Ginsburg

  • After the passing of U.S. Supreme Court Justice Ruth Bader Ginsburg on Friday, U.S. Senator Doug Jones’ (D-AL) reelection campaign sent out a fundraising email over the weekend that mentioned RBG’s passing. 
  • In the email, Jones says that he’s “saddened” by how her death has been politicized by President Donald Trump and Senate Majority Leader Mitch McConnell (R-KY). He goes on to warn, “So much depends on this Senate seat. Our win in November will be a defeat of Mitch McConnell’s hypocrisy and cynicism.”

1. President Donald Trump promises to nominate a woman to SCOTUS

  • After the passing of U.S. Supreme Court Justice Ruth Bader Ginsburg, many are questioning who President Donald Trump will nominate to take RGB’s place on the court. 
  • Trump’s 2020 reelection campaign has released a statement detailing that the president will nominate a woman. Communications director Tim Murtaugh clarified that Trump has every right to make this nomination, arguing, “There has been an open seat on the Supreme Court in a presidential election year 29 times in American history, and in every single case, the president has nominated a candidate.”

4 hours ago

Three SW Alabama counties approved for federal disaster assistance after Hurricane Sally

Governor Kay Ivey and Congressman Bradley Byrne (AL-01) on Sunday confirmed that President Donald J. Trump has approved a major disaster declaration authorizing aid to the parts of Alabama most impacted by Hurricane Sally last week.

The disaster aid will come through FEMA’s Public Assistance and Individual Assistance programs for the counties of Baldwin, Mobile and Escambia.

Byrne said in a statement, “Help is on the way to Alabamians impacted by Hurricane Sally. I offer my sincerest thank you to President Trump and FEMA for quickly approving additional disaster assistance as we begin the difficult rebuilding process along the Gulf Coast. While there is work to be done, Alabama will come together to rebuild after this storm as we have in the past.”

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To check eligibility for disaster assistance programs, call 1-800-621-3362. The news came the same day that FEMA Administrator Pete Gaynor was in Baldwin County to tour storm damage.

Ivey stated, “When I was on the coast Friday, it was clear that there has been significant damage, and people are in need of relief. My Office has been working on putting in the request for individual and public assistance to help bring the needed aid, and I appreciate FEMA for quickly delivering to the people of Alabama. Being approved for individual and public assistance is an important step in the recovery process. Coastal Alabama, we are with you the whole way!”

RELATED: Ivey tours battered Gulf Coast; Area officials say progress being made, ask for patience

The Trump administration had already approved Ivey’s Monday request for a pre-landfall Emergency Disaster Declaration.

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

5 hours ago

Lisa Thomas-McMillan is a 2020 Woman of Impact

For Lisa Thomas-McMillan, it is the newness of each day that motivates her from the minute she opens her eyes.

Thomas-McMillan, founder of Drexell & Honeybee’s in Brewton, told Yellowhammer News in a recent interview that the excitement of discovering what each day holds propels her out of bed and to her restaurant as soon as she awakens before dawn.

“I don’t know what my day is going to bring,” she offered. “I don’t know what that day is going to bring to me. You don’t ever know who you are going to help and how you are going to help them.”

Helping people is something she has made her mission for a large part of her life. A donation-only restaurant, Drexell & Honeybees is a frequent deliverer of the unknowns in which Thomas-McMillan so often revels.

She recalls one day finding a note in the donation box with a message saying that Thomas-McMillan had provided meals for a family of four who had no means to do so themselves. Being unable to recall who might have fit that description in her restaurant the previous day was exactly the way she wanted it. According to her, the “beauty” of the unknown is that names and faces are less important than the simple act of service.

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Stories like that shed light on why Thomas-McMillan took up the cause of hunger and has built a model recognized across the nation as an innovative charitable solution to feeding those in need.

“People suffer from hunger in silence,” she remarked.

So she decided to do something about it.

“People know a lot more about hunger now than 20 years ago,” Thomas-McMillan explained. “It was kind of something that people didn’t talk about. Getting around town and speaking to the elderly people in my hometown I realized a lot of them were choosing between medicine and food. So I started a non-profit food bank called Carlisa, Inc. By doing that I got a chance to go out in the rural areas delivering food, but I was also learning a lot about how people were living, some of the things they were kind of missing out on in life. Over the years, I said in my mind, wouldn’t it be nice to have a place where people could just go and eat and not have to worry about paying for anything.”

It was reading about a restaurant called “Soul Food,” and started by musician Jon Bon Jovi, that got her wheels turning.

“It fascinated me that he was doing this pay it forward thing,” she remembered.

Inspired by the story, she decided she wanted to open a similar restaurant.

After presenting the concept to her husband, Freddie, the couple set in motion plans which resulted in the opening of Drexell & Honeybees.

“We wanted it to be a place where everyone could fit in and feel comfortable and know they were in a good place with good food,” Thomas-McMillan said. “We wanted also to set it up where nobody would know who paid or if they paid or how much.”

And, so, they devised a private box for donations, a key feature of the restaurant’s function.

“One thing I learned over the years in delivering food is that people might not have money but they have pride,” she said. “I knew a lot of people would not come in if their pride would be questioned. So we set it up where they keep every inch of their pride, come in and enjoy a meal and walk out just like anybody else.”

Another part of the payoff for Thomas-McMillan is seeing what happens when people and food happen at the same time.

“I love to see people enjoy food,” she said. “Food is a great, warm thing that brings people together, makes them fellowship. When you see a group of people sitting around and enjoying food, they’re fellowshipping and enjoying each other. And that’s what the restaurant is all about, bringing different people in and saying, ‘I don’t even know you, maybe, but I’m sitting around this table sitting around this table having a good meal, enjoying the food, and I’m fellowshipping with a stranger.’ It is the best feeling in the world.”

It took quite a leap by Thomas-McMillan to arrive at this point, and along the way, it was her faith which played “the biggest role,” according to her.

Facing doubts from the outside that she and Freddie could make Drexell & Honeybees work, they were undeterred. As far as they were concerned, God gave them a mission, and they were going to fulfill it.

“The good feeling, the joy deep down in your stomach that you get from doing something like this,” she pointed out. “Money can’t buy the faith or the joy or the peace of mind. Those are priceless benefits that we get from this.”

People travel from all over asking if she thinks they would be able to replicate her mission. To which she replies, they can, and all it takes is faith and a sincere desire to serve others.

“Being in service to others is the best thing you can do,” said Thomas-McMillan. “After all, we were put on earth to help each other. Serving others is the highest compliment you can pay God for Him giving you your health and strength and keeping you sustained through everything. No matter what happens, God is going to take care of you.”

This does not mean her faith has not been put to the test during her years fighting hunger.

“I didn’t think people were taking [hunger] serious enough,” explained Thomas-McMillan.

So she prayed for guidance and felt a call to walk to Montgomery — from Brewton. Her goal was to hand-deliver a letter outlining her concerns for the hungry to then-Governor Bob Riley. After walking the approximately 115 miles, that is what she did.

Still feeling unsettled, Thomas-McMillan then felt called to walk all the way to Washington, D.C. to draw attention to her cause.

She laughs now looking back at hearing people say the walk was staged.

Thomas-McMillan remembers saying, “’Are you crazy? Do you know what it would have taken to fake a 53-day walk to Washington? It would not have been worth my time [to fake it].’”

Not only did the walk to Washington gain notice, but it also allowed her to explore the depth of her own conviction to help feed the hungry.

Before she had even left the state of Alabama, someone near Tuskegee asked her how much she was getting paid to complete the walk. She thought about it for a minute, and the answer became clear.

“’You know, they couldn’t pay me to walk to Washington,'” she recalled saying. “And that’s when I realized how great this was because you could not pay me to walk to Washington. But the fact that I’m trying to help people with hunger, I would do it for nothing. Just that one question made me realize, ‘Oh, Lord, Lisa, this is pretty awesome because you couldn’t pay me to do this.’”

Her mission statement is: “Feed the Need.” And this is a calling which she believes can be applied to anything and any situation.

Serving the food line one extremely cold day in January, Thomas-McMillan overheard a couple talking about how they did not have enough money to buy an electric heater. She took it upon herself to offer them the needed funds, with the request that they bring the receipt back to her.

They brought back the receipt, and some change, but it was what happened next which had the greatest impact on Thomas-McMillan.

“The man said to the woman, ‘Boy, those youngins gonna sure be glad to see this heater when they get home,’” she recalled. “That tore me up because I didn’t know anything about the children, and I could only imagine that they were so cold that night before, and I could only see them sitting around that little heater. That’s what I mean by ‘Feed the Need.’ People have to realize that I have learned over the last few years, and I’ve known this all my life, I think I have, the more money you give away, the less money has control over your life.”

While the mystery brought by each new day inspires Thomas-McMillan, it also never disappoints.

“Every day you can go home with this special moment from being here,” she said. “You leave with a special moment from things unfolding.”

Yellowhammer News is proud to name Lisa Thomas-McMillan a 2020 Woman of Impact.

Editor’s note: Yellowhammer Multimedia recently announced the third annual Women of Impact Awards. Honorees are being featured on Yellowhammer News each weekday through September 30. We will tell their stories one-by-one, utilizing written and video formats. Check back daily for more of Alabama’s best and brightest.

Tim Howe is an owner of Yellowhammer Multimedia

14 hours ago

Alabama Power completes restoration following historic Hurricane Sally

Alabama Gulf Coast residents are a step closer to recovery following Hurricane Sally, which battered the Alabama and Florida coastline Wednesday.

Sally was the first hurricane to make landfall in Alabama since Hurricane Ivan in 2004 and brought severe flooding and high winds that knocked down poles and power lines in southern and central Alabama before the slow-moving storm exited the state Thursday. Power was disrupted for more than 680,000 Alabama Power customers.

As of Sunday, power had been restored to 99% of Alabama Power customers able to receive service.

Throughout the multiday restoration, teamwork was paramount as company crews worked diligently to address outages in affected communities, getting the lights back on before originally projected times.

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By Friday, outages in central and southeast Alabama had been resolved and all efforts were focused on the Mobile area, as the coastal communities sustained the most damage.

Prior to Sally making landfall, Alabama Power positioned extra crews from across its service territory in the Mobile area so that they were ready to move quickly once the weather improved. From the moment it was safe, company crews were in the field, working day and night.

“Hurricane Sally will be remembered as the most damaging storm to affect Mobile since Hurricane Katrina in 2005,” said Patrick Murphy, Alabama Power Mobile Division vice president. “We appreciate our customers’ patience as we worked to restore power, and we’re committed to working alongside community leaders on full recovery efforts for the area.”

More than 4,000 lineworkers and support personnel from 14 states joined forces working to get the lights back on along the coast. Crews worked through rainy conditions over the weekend as Tropical Storm Beta loomed offshore.

By noon Sunday, crews had replaced more than 400 poles, more than 500 transformers and more than 1,500 spans of power lines that were damaged or destroyed during the severe weather.

“Our crews and industry partners worked safely and quickly through difficult conditions,” said Scott Moore, Alabama Power senior vice president of Power Delivery. “I am proud of their hard work and steadfast commitment to our customers, especially during times of need.”

Sally is just the latest severe storm in what has been a very active hurricane season. With more storms possible before the season ends later this fall, Alabama Power customers should remain vigilant and have their storm-readiness plans in place. Learn more about how to prepare at AlabamaPower.com.

(Courtesy of Alabama NewsCenter)