LA pension peril

Jim Newton: L.A.'s pension peril - latimes.com: "Recognizing that threat, labor leaders may reason that it's better to let Riordan take heat from union members than for those same leaders to participate in pension cuts or contribution increases that make them complicit. They might nominally object but in fact wage only a half-hearted campaign against Riordan's measure, understanding that it might ultimately save them from themselves. "If labor leaders do not see their positions at risk," noted Alex Rubalcava, a municipal finance expert who works closely with Riordan, "they're not paying attention." Then there's the question of how labor would fare if it targeted the reform measure for defeat. Public anger over perceived largesse in public employee pensions is a serious phenomenon, and recent ballot measures to curtail those pensions won in San Diego, a fairly conservative city, and San Jose, a very liberal one. It's quite possible that even if labor did oppose a similar measure here, it would nevertheless pass. Riordan, as usual, is playing his cards carefully. He was coy about his proposal when I met with him at his Brentwood home (in the library, dominated by a photograph of Riordan and then-Texas Gov.George W. Bush), but he insisted this was the most important civic effort on his plate. And he emphasized that L.A. is careening toward bankruptcy. Today's pension system, he said, is "a pyramid scheme." Riordan, who made a fortune as an investor, also made it clear that he's already covering his bases: "I sold all my government bonds two years ago."

Caveat emptor.

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