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

Bradley Byrne campaign announces launch of ‘Farmers for Bradley’ coalition

Bradley Byrne’s campaign for United States Senate announced Friday that key leaders from Alabama’s agriculture community have launched a “Farmers for Bradley” coalition to support Byrne.

Agriculture remains the top industry in Alabama, and we need a Senator who will not only vote right, but who will actually fight tooth and nail to support our farmers, landowners, and agribusinesses,” Byrne said in a statement. “To have such a strong group of agriculture leaders backing our campaign is a real honor and a testament to the hard work we have done over the years to support our Alabama farmers.”

Both State Senator Andrew Jones (R-Centre) and Mark Kaiser from Baldwin County, who lead the coalition, believe Byrne will fight for farmers in the Senate.

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“When I first met Bradley, it was clear he is a fighter,” Jones said. “Agriculture is a very difficult industry with a wide range of challenges, so it is so important we have a U.S. Senator who will work with our farmers and leaders at the state level to make life a little easier.”

Kaiser echoed Jones’ comments and said, “Bradley just gets it when it comes to agriculture. He has taken the time to learn about the various issues impacting Alabama’s agriculture community, and he has used that knowledge to fight for us in Washington. Bradley doesn’t just talk the talk, he walks the walk.”

“Bradley has an impressive record as a champion for Alabama’s farmers,” a press release stated. “From supporting the Farm Bill to cutting bureaucratic red tape, Bradley has always fought to ensure the farm economy remains stable and fair. Bradley plans to continue the fight for farmers by seeking a seat on the Senate Agriculture Committee.”

Kyle Morris also contributes daily to Breitbart News. You can follow him on Twitter @RealKyleMorris.

14 hours ago

Did a police officer go for his gun or not? This is not an appropriate resolution to the Alabama A&M/UNA issue

Last weekend, the Alabama A&M Bulldogs upset the University of North Alabama Lions in a football game that most of you didn’t know even took place by a 31-24 score.

After the game, a series of allegations were made that were pretty serious and require further investigation.

Here are the problems Bulldogs’ head coach Connell Maynor pointed out:

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  • “It ain’t 1959, we don’t have to put up with that type stuff.”
  • Alabama A&M received no free tickets or tickets to sell to the public
  • Alabama A&M player weren’t allowed access to the field prior to two hours before the game
  • Alabama A&M coaches were told to have their credentials hanging around their neck, UNA coaches had theirs around their waist
  • His assistant coaches were not able to use the elevator right away because of fans being given priority
  • “There was too much stuff that went on off the field, behind the scenes that was not professional on their part at all.”
  • “And we were very very disappointed in the way they treated us, in every aspect off the field.”
  • The teams will not play again

And most importantly, according to the Florence Times Daily:

Maynor also alleged an incident occurred in which a police officer put “his hand on his gun” and saying “Did you hear what he said?” during an argument between a coach and security.

Whoa… what?

A police officer put his hand on his weapon during an argument with staff?

Wait.

A police officer put his hand on his weapon during an argument with the staff of a Historically Black College and University at a football game?

Why don’t we know what agency this officer was with?

His name?

The name of the coach involved?

This is a serious allegation and is, no doubt, a racially tinged accusation.

There must be an investigation of this entire situation.

Only, there will not be an investigation. Alabama A&M has made it clear neither the coach nor the school will be commenting further, which is insane.

Alabama A&M’s head coach is alleging some pretty serious stuff, including a police officer going for his gun over a coach’s access to part of a football stadium.

Instead, we got a statement from the two schools that says the following:

“Alabama A&M University and the University of North Alabama are vital educational institutions that serve the North Alabama region and beyond. Both institutions are committed to working collaboratively to advance our respective missions. We are separated by 76 miles; however, we remain united in ensuring the viability of our institutions and the success of our students, faculty, staff, alumni, friends, and programs, both academically and athletically. As part of that collaborative commitment, both universities have been in communication since Monday about the recent UNA-AAMU football game at Braly Stadium to decide what, if any, next steps are necessary. Both institutions are committed to providing a safe, accommodating, friendly, and inclusive environment. We remain dedicated to furthering our relationship and enjoying a bright future, both on and off the field.”

The highlight is this (bold text added for emphasis):

As part of that collaborative commitment, both universities have been in communication since Monday about the recent UNA-AAMU football game at Braly Stadium to decide what, if any, next steps are necessary.

To put it bluntly, that statement is complete garbage.

Was there racism or not?

Was this just normal rivalry stuff?

Was there an effort by the University of North Alabama to behave in a way that Alabama A&M’s coach, staff, and players led to these words by a state employee about another state institution?

Is Coach Maynor lying?

If he is, why is he still employed?

If he is not, why don’t we know what actually happened?

Why is this police officer still on the job?

Shame on everyone involved in this situation, especially the leadership of these universities who have no interest in getting to the bottom of what actually happened.

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

15 hours ago

OIG report: ‘Serious issues,’ possible misuse of taxpayer dollars at Alabama Women’s Business Center locations

The U.S. Small Business Administration’s (SBA) Office of Inspector General (OIG) has released a report identifying “serious” material deficiencies with Women’s Business Center, Inc., an Alabama-based recipient of the SBA’s Women’s Business Center (WBC) grant program.

Women’s Business Center, Inc. is responsible for operating two WBCs, located in Mobile and Brewton.

In the course of the OIG’s audit of SBA’s oversight of the nationwide WBC program, Women’s Business Center, Inc. denied OIG auditors access to both coastal Alabama center’s offices and records.

After issuing an administrative subpoena, the SBA OIG uncovered that both WBCs had actually been permanently closed since the fall of 2018 yet were still collecting federal government funds.

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Further violations uncovered by the OIG included inadequately staffing centers, late and unpaid payroll, a major potential conflict of interest and failure to maintain an adequate financial management system and audited financial statements.

The OIG’s report concluded:

We determined that the Recipient has materially violated federal statutes, regulations, and the terms and conditions of its cooperative agreements. Its lack of required financial systems, records, and policies, and inability to pay its obligations, maintain open and available facilities and service hours, and staff its WBCs with full-time program directors indicates serious issues in the Recipient’s ability to operate and fulfill the WBC program requirements. We have deemed the documentation the Recipient has provided to us to be insufficient and incomplete. The Recipient denied access to OIG, an independent, authorized oversight entity, and disregarded governing federal regulations and terms and conditions of its cooperative agreements.

These findings impel SBA to take prompt corrective action to protect taxpayers’ dollars and help to ensure the integrity of the WBC program. SBA should pursue actions including, but not limited to, suspension, termination, and nonrenewal of the Recipient’s cooperative agreements, as well as suspension and debarment of the Recipient and its personnel.

In a statement reacting to the OIG report, U.S. Senator Marco Rubio (R-FL), chairman of the Senate Committee on Small Business and Entrepreneurship, said, “The gross lack of oversight uncovered in the SBA OIG’s most recent management advisory is incredibly troubling.”

“SBA must take action to remedy the numerous deficiencies identified and enact the Office of Inspector General’s recommendations immediately,” he added. “I appreciate the Office of the Inspector General’s diligence in this matter and look forward to its swift resolution.”

Read the OIG report here.

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

16 hours ago

Ivey back in Montgomery after outpatient procedure ‘went well and as planned’

Governor Kay Ivey on Friday underwent an initial outpatient procedure at the University of Alabama at Birmingham (UAB) for early-stage lung cancer.

This followed her Thursday announcement that disclosed the next day’s procedure and radiation treatments to follow.

In a statement, Ivey’s press secretary, Gina Maiola, said, “The governor’s outpatient procedure today at UAB went well and as planned.”

“She is back in Montgomery and looks forward to returning to her regular schedule next week,” Maiola concluded.

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RELATED: Support pours in after Ivey announces cancer diagnosis — ‘No step too high for a high-stepper’

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

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