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Sunday, December 11, 2011

Dark Side of the Moon

Apologies to Floyd.  As we predicted, the folks at the Whoregonian could not wait to start their muckraking about individual PERS recipients within weeks of the first data release.  While the object of their rectal examination is former University of Oregon coach and Athletic Director Mike Bellotti, the reporters have not been satisfied to wait until the second data release (March 9, 2012) to start pursuing their charges of some sort of fiscal shenanigans with Bellotti's outside benefit.  You'll get no argument from me that Bellotti's benefit needs some scrutiny, but many of the answers could have been obtained with the second release of data.  Moreover, it proves the point that the analysis could have been done without exposing the names of any individuals since the reportwhores were bound to make information requests anyway.  If I had seen a $41,000 per month benefit showing up at the top of the list, more than $10,000 higher than the number 2 on the list, I'd probably start asking some specific questions about who that individual was.  And so they would have found out anyway with a special information request.  And in my world, a special information request for a name would have been a far better solution than the shotgun, throw every name against the wall to see what sticks, approach.

So what have we learned.  Well, we've learned that there are lots of unusual benefits that got to be counted as salary for PERS benefits than any of us could have imagined or any of us have access to.  It is nice to know that the use of a car, a country club membership, and certain kinds of endorsements can be run through the University and then be valued for salary purposes and included in final salary calculations.  What we don't know is exactly who paid for those benefits during Bellotti's career.  Duck boosters (no tax money), Phil Knight (no tax money), Duck Athletic fund (ticket sales and sales of merchandise, no tax money).  So, to the best of our knowledge, only a small amount of public money was used to pay Bellotti's salary while he was working.

To get to the final retirement benefit we run into another problem.  There is no question that Bellotti's actual salary did not generate the kinds of income to PERS to have covered a combination of a $2.5 million account balance and a $2.5 million employer match to fund the Full Formula benefit.  According to PERS, the money needed to fund Bellotti's stream of retirement payments amounts to $5 million dollars throwing off 8% interest for Bellotti's life.  Any mismatch between Bellotti's actual account balance (maybe $600,000 at retirement) and the employer match (another $600,000 give or take), would have to be made up by the employer at retirement so that Bellotti's working balance would make it to the initial $5,000,000.  This raises another question:  WHO actually paid the the "true up" to PERS?  We know it was the University of Oregon, but we don't know where the money came from.  I can guarantee that it DIDN'T come from taxpayer dollars.  I'm willing to bet that a donor (Phil Knight? again) or the Duck Athletic Fund (more donors) ponied up additional contributions to the DAF so that Phil's true-up payment could be made.  Thus, we have it likely the bulk of the money used as the corpus for Bellotti's pension DID NOT come from taxpayer money.  We don't know this for certain because the folks at the local rag didn't bother to ask where the money came from.  A straightforward question:  did any of the money required for the Bellotti "true up" payment come directly from taxpayer sources?  would have answered the question.

The only question I have is the curious and slightly unsavory appearance of the ex-Mrs Bellotti picking up nearly $50,000 per year as the result of a divorce degree with Mr. Bellotti, and then continuing to draw that money even after she and Mr. Bellotti remarried sometime later.  It does have a slightly funny smell to it.

But the thrust of the O's article is that the whole matter of Bellotti's pension smells funny and, by implication, there must be a bunch of other smelly cases too.  I'd hazard a guess that Mr. Bellotti's case is unique as all the other coaches and AD in the system were hired after the IRS salary limitation came into play.

So I say to the Oregonian.  Hope you enjoyed your trip to the dark side of the moon.  You probably won't find too many other cases like Bellotti's, if you find any at all.  When you scramble back into the light, I expect that you'll be left with only this story to tell.  The rest of us don't have tricks like these employed.  So, you've left 105,362 of us exposed just so you could tell the (non) story of Mike Bellotti.  And I am willing to bet that the Mike Bellotti story will result in a bunch of unnecessary sturm und drang at the next Legislature that will end up hurting a bunch of innocent people unnecessarily.  Virtually none of us have guardian angels like Uncle Phil.

1 comment:

Derek said...

Well done today!! Admittedly, I know only what I have seen plastered on the front page of the Oregonian. Thanks for giving the other side of the story and helping me realize I need to get better educated about this issue. Thanks again and congrats. DB