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)

3 hours ago

State Sen. Allen opposes Alabama Memorial Preservation Act repeal — Says it is ‘important’ to protect history

Last month, State Sen. Gerald Allen (R-Tuscaloosa) said he anticipated efforts to change the Alabama Memorial Preservation Act, which he had sponsored in 2017.

The law has been in the news as of late given the rise of the so-called Black Lives Matter protest movement, responding to the death of George Floyd while in custody of the Minneapolis police. The cities of Birmingham and Mobile moved to take down Confederate memorials, in violation of the law.

During an appearance on Alabama Public Television’s “Capitol Journal,” Allen echoed his expectations but said he was opposed to any efforts to repeal the law outright.

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“Just like I said in the past, it is so important, and it is something that we need to be careful with and to protect it,” Allen explained. “It is what it is, and there are some things that took place in history that are shameful, and ugly, and disgraceful — but it is what it is and tells a story about who we are and where we come from. In fact, so many events have taken place here in Alabama and across this great country that represents some major, major policy changes. Some of those events took place in this great state. Certainly, I just think for our generation and generations to follow each of us and for four or five generations down the line, for you to be able to tell the complete story on what exactly took place and how we got to where we are — to be able to tell that story I think is very important.”

“If you start removing things and start saying that things shouldn’t exist — I think we need to be of open mind and about how important it is to project history,” he added. “It is a real issue to some. Certainly, I understand that. But it is history.”

APTV host Don Dailey asked Allen if he was open to “tweaks” but opposed a full repeal, which Allen warned a repeal would have consequences.

“I think we’ll be doing a great disjustice to history to go that far with it and to put it in such a way where currently if there is a mechanism in place, and it is a very good process in which individuals must go through, and it is one of those kinds of steps that we put in place to guarantee how we’re going to observe history and protect history as well,” he said.

@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.

4 hours ago

U.S. Rep. Aderholt: Donald Trump, Mo Brooks remarks didn’t rise to the level of inciting violence — U.S. Capitol riot was ‘premeditated’

President Donald Trump and U.S. Rep. Mo Brooks (R-Huntsville) are facing threats of repercussions for speaking at a rally in the lead-up to the riots on Capitol Hill in Washington, D.C. earlier this month.

Trump has since been impeached by the U.S. House of Representatives, and Brooks is facing threats of a censure resolution by the same body.

However, during an interview with Alabama Public Television, Brooks’ colleague U.S. Rep. Robert Aderholt (R-Haleyville), a “no” vote on impeachment, said while they may have been ill-advised, neither of their remarks rose to the level of inciting violence.

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“I don’t think it was an impeachable offense,” he said of Trump. “If you look at what he said, and I looked at them, they were not I don’t think would nearly rise to that level. Obviously, he, like so many Americans, were concerned about the outcome of the election that occurred back in November — not just the outcome but the way it was handled, and the way the laws were not really in compliance with — and a lot of this really dealt with COVID-19 and the way the states were doing things. We could talk about that for an hour but let me just say that I don’t think that his actions were something that would rise to impeachment. If you look at the actions of those that were rioting in the Capitol, they were there and had a plan well before Donald Trump spoke to the people there for the Electoral College vote. They wouldn’t have had time for them to leave there, get the necessary equipment that some of them had — like the ties we’ve seen in the photos, several other objects that they had. That was something that had to be premeditated.”

He added the “vast majority” of the people at the protest event in Washington, D.C. that day were not a part of the rioting at the U.S. Capitol.

“I’ve looked at the words the president used that day and he in no way from the words that I have seen in the transcripts, that he in any way tried to incite any riots. I think those that would say so are just looking for some reason to try to fail the president.”

“Capitol Journal” anchor Don Dailey then asked Aderholt about Brooks, who Aderholt described as being “very passionate” but not responsible for the U.S. Capitol violence.

“If you know Congressman Brooks, he’s very passionate,” Aderholt added. “But again, I don’t think that what he said caused the rioters to go in. Again, they had to have had a plan well before Congressman Brooks spoke. I think looking back, his words could have been chosen differently. I think he could have made his point without using some of the words he did. But I don’t think it rose to the level of inciting the violence that did occur. Hindsight is always 20/20, and I know that he’s been very committed in what his comments were, I think perhaps he would have chosen those words differently had he known the outcome. But obviously, if you know Congressman Brooks, he’s very passionate on whatever issue he works on, and I think that was part of the day there that he was concerned like many of us were — that the electoral votes that were going to be counted — there were a lot of questions. We can’t move forward in this country if we have a lot of people questioning going to the ballot and making sure their vote is counted. If we start down that path, then I think it’s the end of our democracy as we know it because people have got to have the confidence when their vote is cast, their vote is not going to be put in with votes that are not credible and that are questionable.”

@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.

17 hours ago

NASA successfully ignites engines on Huntsville-managed SLS core stage, collects valuable data

NASA on Saturday conducted a hot fire of the core stage for the agency’s Space Launch System (SLS) rocket that is scheduled to launch the Artemis I mission to the moon later this year.

The hot fire was the final test of the eight-part, 12-month Green Run series, conducted at Mississippi’s Stennis Space Center.

SLS is the world’s most powerful ever rocket that will power America’s next-generation moon missions and subsequent crewed missions to Mars. Alabama’s aerospace industry has led the effort to build the SLS, which stands 212 feet high and 27.6 feet in diameter.

Boeing is the core stage lead contractor, and Aerojet Rocketdyne is the RS-25 engines lead contractor. The SLS program is managed out of NASA’s Marshall Space Flight Center in Huntsville, while Boeing’s Huntsville-based Space and Launch division manages the company’s SLS work.

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The hot fire test plan called for the rocket’s four RS-25 engines to fire for a little more than eight minutes – the same amount of time it will take to send the rocket to space following launch.

The team successfully completed the countdown and ignited the engines, however the engines shut down a little more than one minute into the hot fire. Teams are assessing the data to determine what caused the early shutdown and will determine a path forward, per a release from NASA.

During the test, the core stage generated 1.6 million pounds of thrust while anchored in the historic B-2 Test Stand. The hot fire included loading 733,000 pounds of liquid oxygen and liquid hydrogen – mirroring the launch countdown procedure.

“Saturday’s test was an important step forward to ensure that the core stage of the SLS rocket is ready for the Artemis I mission, and to carry crew on future missions,” stated NASA Administrator Jim Bridenstine, who attended the test. “Although the engines did not fire for the full duration, the team successfully worked through the countdown, ignited the engines, and gained valuable data to inform our path forward.”

Support teams across the Stennis test complex reportedly provided high-pressure gases to the test stand, delivered all operational electrical power, supplied more than 330,000 gallons of water per minute to protect the test stand flame deflector and ensure the structural integrity of the core stage, and captured data needed to evaluate the core stage performance.

“Seeing all four engines ignite for the first time during the core stage hot fire test was a big milestone for the Space Launch System team” said John Honeycutt, the SLS program manager at Marshall. “We will analyze the data, and what we learned from today’s test will help us plan the right path forward for verifying this new core stage is ready for flight on the Artemis I mission.”

Overall, the hot fire represented a milestone for American space exploration.

“Stennis has not witnessed this level of power since the testing of Saturn V stages in the 1960s,” commented Stennis Center Director Rick Gilbrech. “Stennis is the premier rocket propulsion facility that tested the Saturn V first and second stages that carried humans to the Moon during the Apollo Program, and now, this hot fire is exactly why we test like we fly and fly like we test. We will learn from today’s early shutdown, identify any corrections if needed, and move forward.”

You can watch the hot fire here.

Under the Artemis program, NASA is working to land the first woman and the next man on the moon in 2024 through Artemis III.

Artemis I will be the first integrated flight test of SLS and the Orion spacecraft. This will be an uncrewed test flight. Artemis II is slated to be the first crewed flight for the program.

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

18 hours ago

USDA, Alabama sign historic agreement to improve forests on public, private lands

U.S. Department of Agriculture Under Secretary James Hubbard and Alabama Gov. Kay Ivey signed a shared stewardship agreement Jan. 12 to ensure the long-term sustainability of public and private lands in the state.

The agreement signed in an online ceremony is among USDA’s Forest Service and Natural Resources Conservation Service, the Alabama Department of Conservation and Natural Resources, and the Alabama Forestry Commission.

Shared Stewardship agreements establish a framework for federal and state agencies to collaborate better, focus on accomplishing mutual goals, further common interests and effectively respond to the increasing ecological challenges and natural resource concerns.

“Shared stewardship provides an incredible opportunity to work with the state of Alabama to set stewardship priorities together,” Hubbard said. “We will combine our mutual skills and assets to achieve cross-boundary outcomes desired by all.”

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This agreement centers on USDA’s commitment to work with states and other partners to use the best available science to identify high-priority forests that need treatment.

“From our rolling mountains to our sparkling coast, the world can understand why they call it ‘Alabama the Beautiful,’” Ivey said. “I am pleased that we can build on the conservation efforts already happening through these strong federal and state partnerships. I look forward to our state continually working for the good of the people as well as our natural resources and to preserve our beautiful state for generations to come.”

Alabama becomes the seventh state in the South and 23rd in the nation to sign such an agreement to strengthen partnerships to increase the scope and scale of critical forest treatments that support communities and improve forest conditions.

“We look forward to continuing to work together with our partner agencies under this shared stewardship agreement,” said ADCNR Commissioner Chris Blankenship. “This agreement memorializes a lot of the good work we have already been doing together to manage the resources and enhance our beautiful state, and it adds new areas where we can grow our partnerships.”

The agreement can be found at https://www.fs.usda.gov/managing-land/shared-stewardship.

(Courtesy of Alabama NewsCenter)

18 hours ago

VIDEO: Trump’s second impeachment moves forward, Mo Brooks faces targeting in D.C., Alabama’s vaccine rollout is too slow and more on Alabama Politics This Week …

Radio talk show host Dale Jackson and Alabama Democratic Party Executive Committee member Lisa Handback take you through Alabama’s biggest political stories, including:

— President Donald Trump has now been impeached again, but will Democrats actually follow through in the Senate?

— Is U.S. Representative Mo Brooks (R-Huntsville) really in danger of censure, expulsion and/or prosecution in Washington, D.C.?

— Where is Alabama’s vaccine rollout in comparison to other states?

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Jackson and Handback are joined by State Senator Sam Givhan (R-Huntsville) to discuss the U.S. Capitol riots and their fallout, the next legislative session and whether it will be shortened or not.

Jackson closes the show with a “Parting Shot” at those who believe threats of violence actually help their cause in spite of all the evidence that shows otherwise.

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