Friday, July 22, 2016
Wall Street Vultures May Have Wrecked the Central States Pension Fund
One goal of the inquiry is to determine whether Goldman Sachs and other investment advisors caused the Fund to lose money, endangering the future pensions of retired truck drivers and other Teamster union members.
Rep. Marcy Kaptur (D-Ohio) hailed the GAO action as a victory for workers, many of whom have been pressuring Congress to take action on behalf of the pensioners.
“It’s astonishing to now read about how Wall Street firms hired by Central States invested retirees’ pension funds in Iraq in 2008, right in the middle of a full-scale war in Iraq. Or how they invested in unstable Russian banks, when the economy there is in shambles, or how they sunk $1.4 billion into risky Single A-rated mortgage-backed bonds in the middle of the housing meltdown. Something is simply wrong, and the GAO will get to the bottom of this,” she said.
Behind the GAO review is the conviction by some of the retirees that investment advisors like Goldman Sachs and the Chicago-based Northern Trust Corporation profited off the Fund by pushing questionable investment strategies while raking in exorbitant management fees. If true, a full accounting might lead to a return of some of the money lost and partial repairs to the damaged finances of the Fund, pension activists say.