Probe sought of troubled Central States Pension Fund

By: Tom Jackson, Sandusky Register
June 21, 2016

Teamsters in northern Ohio and other areas of the Midwest.

Only a full-fledged investigation can uncover why the fund is in such bad shape, Kaptur said.

“It’s astonishing to now read about how Wall Street firms hired by Central States invested retirees’ pension funds in Iraqi banks in 2008, right in the middle of a full-scale war in Iraq,” said Kaptur. “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.”

Officially, the Government Accounting Office refused to say whether it will carry out the probe.

"I can confirm we have received the request. Now it will go through our normal review process before we make any determinations. This usually takes a few weeks before a formal decision is made," said Charles Young, the main spokesman for the agency.

It would be a surprise, however, if the GAO refused to take the case, as many lawmakers are asking for the probe.

The investigation is requested by two separate letters, one from the House and one from the Senate.

The Senate letter is signed by ten United States senators, including Brown. The House letter is signed by 41 House members. Besides Kaptur, House members from Ohio who signed it were U.S. Rep. Joyce Beatty, U.S. Rep. Tim Ryan and U.S. Rep. Marcia Fudge, all Democrats.

Brown and Kaptur took the lead in writing the letter. Brown is the ranking Democrat on the on the Subcommittee on Social Security, Pensions and Family Policy on the Senate Finance Committee.

According to Kaptur's office, the fund currently pays benefits to 277,000 retirees, including 49,000 in Ohio. Many affected retirees are in the Sandusky area. Kaptur's office says the pension fund has $16.8 billion in assets and $35 billion in retiree obligations.

The pension fund's trustees had sought to preserve the fund's solvency by slashing benefits beginning this summer, but the application was rejected by the U.S. Treasury. Saving the fund before it begins to run out of money now apparently depends upon Congress; the trustees said they won't submit another proposal.

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