OKLAHOMA government has more than $11 billion in unfunded pension liabilities. So some legislators propose moving new state employees into a 401(k)-style system and using the resulting savings to help shore up the current system for workers already vested in it; that plan passed the state House this week. Rather than argue against that plan based on facts and analysis, some opponents are resorting to a conspiracy theory — and, boy, is it a doozy!
Here’s the gist: A man who once worked for Enron now heads a charitable organization that supports pension reform efforts. That organization provided a grant to the Oklahoma Council of Public Affairs, which also supports pension reform. Therefore, the entire pension reform effort must be an Enron-style scam.
Oklahoma AFL-CIO President Jimmy Curry is among those touting the Laura and John Arnold Foundation’s support of pension reform as a sign of nefarious activity. Curry told the Journal Record, “Arnold made his money in Enron, then got out before it went belly-up. What we’ve seen them do in other states is combine all the pension boards. Now why would a hedge fund operator be interested in public pensions? I was always taught to follow the money.”
In similar fashion, House Democratic Leader Scott Inman, D-Del City, said, “The push behind pension reform in Oklahoma is being bankrolled and supported by an ex-Enron executive, John Arnold. What you have here is a guy who helped facilitate the robbing of retirements for millions of people in the United States when he helped to tank Enron. He leaves before the thing goes belly-up and now he comes into Oklahoma.”
This is a really compelling argument only if you ignore the Grand Canyon-wide leaps of logic.
While Arnold did work for Enron from 1995 to 2001, becoming a millionaire in the process, he made the overwhelming bulk of his money after leaving that company and starting his own fund, Centaurus Advisors. The Houston Chronicle reported, Arnold was “never implicated in any of Enron's accounting irregularities or bad business choices …”
Today, Forbes estimates Arnold’s net worth at $2.9 billion. Yet Curry and Inman seem to think Arnold is so desperate for money that he’d participate in a details-to-be-revealed-later scheme involving state pension systems that owe $11 billion more than they can pay. Even Nigerian spammers employ sounder financial logic.
In 2012, Arnold announced he was retiring at age 38. He’s since been active in philanthropic efforts through the aforementioned foundation. That organization has given away $1.5 billion. Among other things, the foundation helped keep Head Start programs running during last year’s federal government shutdown, funded state programs to keep inmates from returning to jail, and supported cancer research. Do Curry and Inman think those initiatives should be deep-sixed because of “Enron ties”?
OCPA officials have been banging the drum for pension reform for years, long before receiving grant support from the Arnold foundation, just as state lawmakers have been working on pension reform for several years. Curry and Inman seem to think those efforts are primarily due to the influence of an out-of-state foundation. Here’s an alternative theory: Perhaps lawmakers are focused on pension reform because the state has more than $11 billion in unfunded liabilities.