In 2007, I started to notice that LACERS (L.A. City Employee Retirement System) had money invested in some shady real estate projects, that I stumbled upon, while researching the "Grand Avenue Project" for an article I wrote for L.A. Weekly.
I've told the story, many times, how upon the discovery (that pension money was being invested in this shady, bogus project that I felt had ZERO chance of getting off the ground), I started to ponder the idea of investing pension money (the most sacred of investment money, that I thought was supposed to be in "safe/non-risky" investments), invested in something so speculative and risky as Grand Ave Project.
Then further investigation, raised further ZD flags, at the same time I became increasingly concerned over the effects that the global economy would be having on Wall Street, in light of "subprime loans" that I felt would be triggering a recession, that I noted would be the worst thing we've seen in our lives, unless you are old enough to remember the Great Depression.
Sure enough, subprime loans triggered a recession, and Wall Street crashed over it all in '08.
We are all aware of the effects that this economic slide has had on not only business, but on municipalities, like the City of Los Angeles.
The bottom seems to have fallen out of the city's budget -- as they have already decimated staff, departments and are seeing the negative results throughout the city in the form of city departments that can't accommodate the city's work load. Things like the city attorney not being able to prosecute cases, mechanics not being able to service emergency response vehicles...and the reduction of services will be felt at a more intense level, next year.
A couple years ago, as the city was first beginning to discuss this economic and budget mess (still not a crisis in the mind of City Council, yet, but time to start getting to the bottom of things and figure it out...again, a couple years ago...and they are still trying to sort it out, this week), the CAO staff was called into council chambers to do what they were trying to avoid at all costs: HAVE A REPORT FROM THE CAO AS TO THE SHAPE OF THE CITY FINANCES ON LIVE TV 35, with the whole city watching, including Zuma Dogg.
What the CAO said was that the reason the city had to take drastic measures, immediately, was because the city lost billions (up to $7 billion) in "overly-risky, non-investment grade Wall Street and real estate investments." (They are called, "Alternative Investments." And Andrew Cuomo threw Julio Ramirez & Elliot Broidy in jail over it and shut down Wetherly Capital FOR LIFE, over the New York State "Alt Investment" scam, RUN BY THE PEOPLE HERE IN L.A., that mayor Antonio Villaraigosa appointed to the LACERS (and other boards) as commissioners. DO YOU THINK NOTHING SHADY HAPPENED IN LOS ANGELES, after losing 20% of the fund in what the city's experts say were lost in "alternative investments?"
THEN, the CAO adds, "And the way the system is set up, the losses have to be covered by the city, out of the general fund." (Unlike YOUR retirement fund, if they LOSE, who cares...the return is guaranteed by YOU and the city taxpayers, right out of the same general fund used for fire, police, trash, roads, parks, libraries, all city staff, all services, all everything.
AND TO REALLY HIT YOU OVER THE HEAD WITH THE IMPACT THESE "ALTERNATIVE INVESTMENT" LOSSES HAD ON THE CITY'S GENERAL FUND...CAN IT BE ANY MORE CLEAR IF I TOLD YOU, a LACERS member told me the mayor twists their arm to invest in "alt investments," and one of the high level CAO's (don't wanna say which one, specifically, for their own good) PERSONALLY TOLD ME, FACE TO FACE, THAT IT IS THESE SHADY ALTERNATIVE INVESTMENTS THAT IS THE REASON WE ARE IN THIS SINKING BUDGET BOAT!!! (It is NOT because of structural, overly-generous payroll and pension that is ALSO an issue...BUT AN ISSUE THAT AFFECTS THE FUTURE. THAT IS NOT WHY WE ARE CUTTING AND REDUCING EVERYTHING....we would still be able to kick that down the road, without much boat rocking....THE REASON IT IS "GO TIME/CRISIS TIME" IS BECAUSE THE 20% LOSS HAS TO BE COVERED OUT OF THE GENERAL FUND!!!!!!!!!!
I did some research on the LACERS web site, and found they did indeed lose -20% of the entire LACERS pension fund in '08-'09, when they promised a +8% return. (OOPS, just a tad off!)
Then, late last year, I was watching a report from the LACERS staff, before council for a discussion, and Tony Perez of LACERS was responding to a consulting report on LACERS practices. He noted that he didn't have a problem with the report, but he took issue with the point, that he even noted other consultants agree, the city is overly-invested in "alternative investments." AGAIN, ALL THE PENSION CONSULTANTS HAVE NOTED THAT THE CITY OF LOS ANGELES IS OVERLY INVESTED IN ALTERNATIVE INVESTMENTS.
Tony Perez of LACERS disagrees. WHAT DOES HISTORY TELL YOU. And if the market "adjusts" again, like it did in '08...and I think we ALL AGREE IT IS DUE FOR AN "ADJUSTMENT," the city will be pulled into bankruptcy like an anvil tossed over a cliff, if the market "adjusts down."
THE CAO TOLD ME...AS GOES WALL STREET GOES THE CITY'S GENERAL FUND!!!!
I AM NOT PONTIFICATING ON THIS STUFF...IT IS NOT MY OPINION...I AM ONLY BLOGGING WHAT THE CITY'S LACERS & CAO SAID...ON THE RECORD...ON TV 35.
Ask L.A. Times David Zanhiser. He said, at the bottom of a column, on a slow news Saturday that the reason the city was in this budget crisis was due in large part to the Wall Street loses during the peak of the recession: "When Villaraigosa took office in 2005, public safety pension and retirement healthcare benefits consumed 4.4% of the general fund, which pays for basic services such as police, parks and recreation programs. That figure reached 9% this year and is expected to reach nearly 20% in 2015, budget analysts said."
Much of that growth has been attributed to plummeting investment returns in the city's public safety pension system during the recent recession. - LA TIMES/Feb 2011 (As in all the PENSION FRAUD as blogged by Zuma Dogg in '07, '08 & '09, as it was happening.)
AND IN FEBRUARY 2011 it was announced by the SEC and U.S. Attorney's Office that there is an investigation into California Pension Funds!!! Adding, this is the first time EVER that the SEC is investigating something other than a Wall Street/Fortune 500/Business and the first time they are investigating a state municipality. DO YOU KNOW HOW BAD THAT IS!?!?! FIRST TIME, EVER!!!! OVER THIS ISSUE!!! (Sorry it's not over your neighborhood council rollover funds. If they didn't lose this money in Wall Street, your dumb NC budget wouldn't be an issue.)
So my question is: With so many arm chair budget experts on the blogosphere like Paul Hatfield, Ron Kaye, Jack Humphriville and even mi amigo talk show host Kevin James...
HOW COME YOU ALL REFUSE TO MENTION THIS ISSUE EVEN FOR ONE SECOND, OR EVEN FOR ONE PARAGRAPH? Seems kinda nutty? You'll talk about some $50,000 thing, or even a $500,000 project or $5 million (whatever.) STILL CHUMP CHANGE TO BILLIONS AND BILLIONS THIS ISSUE CONCERNS. AND THIS IS THE CAUSE OF ALL YOUR OTHER BUDGETARY PROBLEMS AND CUTS!?!?! I have third degree burn from all that nutty demagogue hot air.
MORE ON ZUMA DOGG:
* "Brain-seizing artistry. A local underground superstar. -D. Harvey/LA Weekly
* "A public access icon." - M. Fleischer/LA Weekly
* "Local Legend" - Doug McIntyre/KABC, Red-Eye Radio
* "You're actually one of my favorite people to watch on TV." - Former L.A. Mayor Richard Riordan to Zuma Dogg on KABC radio.
* "Zuma Dogg fought the oppressive, tightly controlled L.A. City Council meetings presided over by Council President Eric Garcetti, who had banned video cameras. After police tried to stop Zuma Dogg from taping the council deliberations, he railed against the big shots for months, slamming Garcetti as “Garshady” on his show and on his whistleblower blog. “Whatever happened to free speech in this country?,” Zuma Dogg asked. He prevailed against Garcetti’s rules, and now brings his cameracorder to every council meeting, as can any member of the public thanks to him." - LA Weekly.
* " Zuma Dogg has distinguished himself as a "mix of curiosity and crusader" fighting for what he considers his free-speech rights."He's been able to do it with humor and at times be more direct and substantive." Los Angeles City Council President Eric Garcetti/Los Angeles Times
* "An original ... another treasure of Venice." - Los Angeles City Councilman Bill Rosendahl/Los Angeles Times
* " A civic treasure." - Michael Higby/Mayor Sam's Blog (L.A. politics)
* "I've seen your show on TV. Keep doing what you're doing." - Dennis Franz
* "A very funny comedian." - Howard Stern
* "Everyone watches Zuma Dogg!" - Reggie Miller/NBA All Star
* "We watch your videos on our tour bus. We need more." - Dean DeLeo (STP)
* "I am such a fan of your show." - Courteney Cox-Arquette
* "Love your show buddy. I watch it all the time." - Adam Sandler
* "Zuma Dogg, not only one of the most recognizable figures at City Hall, cordially greeted by passersby, including security guards and Mayor Antonio Villaraigosa, he also has the ear of high-level insiders, who feed him information in the hope that he’ll expose, and possibly stop, one questionable government project or another." - LA Weekly (Click here for article.)
* ""He wakes us up; it gets everyone's attention." L.A. City Controller Wendy Greuel/Los Angeles Times
(GOOD! I THINK IT WOULD HAVE BEEN ENOUGH FOR MOST PEOPLE, IF MY ONLY DISTINCTION WAS WAKING THEM UP!)
* "Something between stunned and amazed. "I've never seen anything like it." - Former California Assembly Speaker, Councilman Herb Wesson/Los Angeles Times
THANKS TO THE NEARLY 10,000 PEOPLE who voted for "Zuma Dogg" in the last Los Angeles Mayoral election. (Not a bad number to pull, considering the historically low voter turnout, and the fact that ZD didn't spend a penny on his campaign, and didn't have the luxury of one flier." The mayor spent $3 million, just for comparison.)
* "Zuma Dogg, who is smarter than and knows more about city government than most Council members, has become something of an urban folk hero, skewering City Hall foibles and failures in his frequent public comment appearances broadcast on Channel 35. His campaigns for mayor and now CD2 attracted respectable numbers of votes for a candidate who was not only is penniless but homeless." - Ron Kaye/RonKayeLA.com (IMAGINE IF I HAD PENNIES TO WORK WITH!)
* "It would be nice to see someone with the heroism of Zuma Dogg in office." - Kevin James/870-KRLA Radio
* "I too, as you may know, am a Deming fan. I think your synthesis of his work is fabulous." - Anthony Robbins (Tony was kind enough to bow down to me on his stage in front of thousands of people, during a seminar that was being simulcast across the country. I am told that was the first and only time he did that. Awe shucks!)
* "Very Well Done." - Dr. W. Edwards Deming on "Interpreting Deming's 14 Points," by Zuma Dogg. (Published internationally in "Quality Digest." I was told the letter from Deming had to be a fake, cause all he ever did was scribble red ink on everything. Let alone send a response like that. I had to fax the letter to some folks for verification. LOL! Too good to be true. I was in my 20's and was told, they were expecting someone in their 60's or 70's, because it usually takes that long to be able to write something at that level. Awe Shucks!)
* "I especially liked your of explanation Deming's more controversial points." - Don Dewar/Publisher, Quality Digest
* "You not only took our ideas, but expanded them in ways I thought were very interesting." - Al Ries ("Marketing Warfare," "22 Immutable Laws of Marketing," "Focus.")
* "In the history of our company, we've never seen results like these. They were off the charts. We had to go back and re-enter the data to make sure it was correct." - Broadcast Architecture (The world's PREMIER radio and record industry market research company, serving the U.S., Japan and abroad; on $100,000 NYC radio research project ZD headed/created. Station went from #11 to #2! $MILILLIONS$ for station!)
Concerned Citizen, and nothing more.