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)

5 hours ago

Mobile Bay Bridge project awarded $125 million grant by Trump administration

The I-10 Mobile Bayway Bridge project has been awarded a $125 million Infrastructure for Rebuilding America (INFRA) grant by the U.S. Department of Transportation.

The announcement was made Monday by Senator Richard Shelby’s (R-AL) office, which said the amount signifies one of the largest competitive federal grants ever awarded to the state of Alabama.

Additionally, the city of Tuscaloosa was separately awarded a $6.87 million INFRA grant to help replace an overpass bridge located on University Boulevard and U.S. Highway 82.

“Both of these projects will help improve safety, alleviate traffic congestion and concerns with overcapacity, and promote increased economic development opportunities across the state,” Shelby said in a statement.

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“Investing in essential infrastructure in Alabama and across the country promotes a more prosperous future for our nation,” he concluded. “I thank (U.S. DOT) Secretary Chao for her attention to these projects and look forward to continuing my work to ensure that our state is well represented in any effort to fund federal transportation priorities.”

The federal award to the I-10 Mobile Bayway Bridge project comes amid significant controversy over the Alabama Department of Transportation’s (ALDOT) plan to pay for the project, at least partially, through tolling. The total projected cost of the project is approximately $2 billion.

Congressman Bradley Byrne (AL-01) has previously lamented that ALDOT was not more focused on securing federal money and avoiding tolling, even as Alabama federal officials like Byrne and Shelby worked to secure funding access.

ALDOT was previously turned down for a $250 million federal grant application for the project last year.

Byrne led Alabama’s entire House delegation in sending a bipartisan letter to Chao in February in support of funding the project with an INFRA grant.

After the news of the award broke on Monday, Byrne released a statement celebrating the news and reaffirming his opposition to ALDOT’s tolling proposal.

“This is outstanding news for the people of Southwest Alabama! Fighting for federal funding for this bridge has been one of my top priorities in Congress, and I am glad the Trump Administration has come through with this grant award,” Byrne said. “I am very appreciative of the help from our entire Alabama congressional delegation, especially Senator Richard Shelby.”

“Today is a positive step toward making this project a reality, but our work is not over,” he added. “The current tolling proposal for this project is unacceptable, and I will continue leading the fight against tolling and working to ensure this project helps – not hurts – the people of South Alabama.”

The tolling proposal has also become a statewide political piñata, with 2020 Republican U.S. Senate candidates such as Tommy Tuberville and Secretary of State John Merrill coming out swinging in addressing the topic recently.

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

Byrne: Border battle harms Alabama communities

The detrimental effects of the humanitarian and national security crisis on our border extend all the way to Alabama communities. That’s why I’ve made it a priority to address our immigration policies.

One of the most obvious ways our insecure border harms our communities is the drug trade. Our porous border is perhaps the most significant contributing factor to the ongoing opioid crisis — the worst drug epidemic in modern American history. In 2017, over 47,000 lives were claimed by opioids. That’s more than those from car accidents and firearms. These deaths have affected families across our great state.

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The drug problem is made worse by the unprecedented migrant surge. James Carroll, director of the U.S. Office of Drug Control Policy, said just last week that drug seizures are down this year because so much attention is being diverted to humanitarian needs.

Because of that diversion, border patrol agents and resources are unable to be allocated towards their fundamental law enforcement functions. According to Carroll, more drugs are coming in than ever before.

One of the primary drivers of the migrant crisis is our asylum policy. Through a combination of loopholes worsened by a legal settlement made by the Clinton administration, migrants are encouraged to cross our border and give themselves up to law enforcement.

After arrest, migrants claiming asylum are eventually permitted entrance into the country while their claims are processed. This is permitted even when migrants do not cross at a legal checkpoint.

Although, by some estimates, only around a tenth of asylum claims are found by our courts to be legitimate, the vast majority never show up for their court date and remain free inside the United States.

A disproportionate number of these asylum claims are made by able-bodied young men. Only a few months ago, a Mobile teacher was killed in a car crash by an illegal immigrant minor who had falsely claimed asylum but never showed at his court date to avoid deportation.

The coyotes and cartels, of course, have every reason to facilitate migrants along their journey and orchestrate lawlessness at the border.

Last week, one of the biggest points of entry at the Southern border had to be shut down after a wave of nearly 50 undocumented immigrants rushed the border into Texas. The group attempted to tear down barricades and assaulted several border patrol officers who were forced to deploy tear gas and pepper balls.

Let’s call these people what they are – criminals. And while border agents were able to keep these criminals out of our communities, many more slip through the cracks while agents deal with illegal stunts like this and the humanitarian needs of asylee claimants.

Last year, a 13-year-old girl in Huntsville was beheaded after witnessing the stabbing of her grandmother by gang members in a horrific incident involving members of the Sinaloa Cartel. It is disheartening that gangs like MS-13 have infiltrated communities throughout our nation, but stories like this reinforce the sad truth that the problem is impacting Alabamians.

There are other significant problems that do not receive headlines. I’ve spoken with Alabama sheriffs who have shared horror stories about the strain illegal immigration places on their deputies. And I’ve talk to incredibly frustrated school superintendents who must divert resources away from educating local students to deal with their illegal immigrant population. Our hospitals are also placed under enormous burdens by illegal immigration. And governments are forced to pay for services for illegal immigrants that could have gone towards roads, bridges and other services for Americans.

This is not just a Texas, New Mexico, Arizona or California issue. This is an Alabama issue. I will continue standing with President Trump and work to get an immigration system that works for the American people.

U.S. Rep. Bradley Byrne is a Republican from Fairhope.

6 hours ago

Boating deaths are soaring on Alabama’s lakes and rivers

BIRMINGHAM, Ala. (AP) — Alabama has already had its deadliest year in two decades for boaters — and the summer isn’t nearly over yet.

Boating accidents in the first 6 ½ months of 2019 have killed 25 people, AL.com reported.

Already, that makes this year the deadliest one since 1998, when 32 people died. The number of deaths so far this year is already higher than year-end totals for the past several years.

This July alone, 12 crashes resulted in six deaths.

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“In my 24 years of doing this, I’ve never seen anything like it,” said Capt. Gary Buchanan, the commander of the Alabama Law Enforcement Agency’s Marine Patrol.

Investigators can’t definitively pinpoint the cause for this year’s drastic increase, Buchanan said.

“Some have happened at night, some during the day, some have involved one boat, some two boats and alcohol has been a factor in some,” Buchanan said. “It’s all over the spectrum.”

There has been a decrease in Marine Patrol presence on Alabama’s lakes and rivers. There are roughly 45 Marine Patrol current officers throughout Alabama. There are 21 vacancies — jobs that were all filled 10 to 15 years ago, Al.com reported.

Boater registrations have also increased in recent years.

“There’s an increase in boaters and there are fewer Marine Patrol troopers on the waterways,” Buchanan said. “There’s no doubt that an enforcement presence has an effect on behavior, just like when you top that hill and you see a trooper car in front of you.”

The year with the most boating-related fatalities was 1972, which had a year-end total of 55. The year with the fewest, according to ALEA statistics, was 2013, with 10.

(Associated Press, copyright 2019)

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7 hours ago

Alabama K9 officer dies after drug raid

“Jake,” a K9 officer with the Alabama Department of Corrections, has died following a raid Thursday on Staton Correctional Facility in Elmore County.

CBS 42 reported last week that Jake was recovering after having a medical emergency during a contraband raid at the prison. He reportedly came into contact with synthetic marijuana and became unresponsive. Medical personnel and his handler at the prison then heroically performed live-saving measures on the K9, who was expected to return to duty within a few weeks.

However, CBS 42′ Reshad Hudson reported on Monday that Jake died from complications following the initial incident.

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WSFA is reporting that Jake died on Saturday at Auburn University Veterinary Clinic.

“I was saddened to hear that one of the Corrections K9s, Jake, lost his life over the weekend,” Governor Kay Ivey said. “This K9 died in service to public safety and in service to the state. Jake is an example of the goodness, the loyalty and service that our four-legged friends provide. We certainly lost a loyal companion.”

A criminal investigation into Jake’s death is reportedly underway. More testing of the apparent synthetic marijuana is pending, according to ADOC. Officials told WSFA that anyone found to be responsible in Jake’s death will be prosecuted to the fullest extent of the law.

Jake had worked with his handler, Sgt. Quinton Jones, since the K9 joined ADOC in 2014.

“This is a difficult time for our ADOC family and especially for Sgt. Jones and those assigned to our K9 Bureau who worked with Jake on a daily basis,” ADOC Commissioner Jeff Dunn told WSFA. “I extend our deepest condolences for the loss of this noble K9 who honorably served the State of Alabama and for ultimately giving his life while protecting the public.”

Dunn added that Jake likely saved lives by detecting the substance during the raid.

“With Jake’s training and ability to find the narcotic, he saved other lives by giving his own in the line-of-duty. Jake’s heroism and ultimate sacrifice will never be forgotten,” he emphasized.

Jake will be given a burial with full honors this week, according to WSFA.

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

9 hours ago

Byrne visiting U.S.-Mexico border on Monday

Congressman Bradley Byrne (AL-01) is visiting the United States’ southern border on Monday, the Republican U.S. Senate candidate’s office announced in a release.

Byrne reportedly arrived at the border Monday morning and will meet with Customs and Border Protection officials, tour a port of entry and visit an Immigration and Customs Enforcement (ICE) detention facility.

“As the national security and humanitarian crisis at our border escalates, it is important to see the situation firsthand and talk directly with border agents, law enforcement, and local officials about the challenges they face and what resources they need,” Byrne said in a statement.

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He has been a consistent supporter of President Donald Trump’s immigration policies.

“The American people have demanded a lawful system of immigration that protects their economic and personal safety, and I will continue working closely with President Trump and his Administration to secure our border, support law enforcement, and keep the American people safe,” Byrne concluded.

Senator Doug Jones (D-AL) has opposed building a wall on the U.S.-Mexico border.

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