"You're a liar. You're a liar. You're a liar."
-- William B. Nellis, secretary to the board and counsel, Teamsters Central States, Southeast & Southwest Areas Pension Fund
There's irony to the abrupt resignation of Bankers Trust Co. as a named fiduciary of the Teamsters Central States, Southeast & Southwest Areas Pension Fund.
BT quit after pleading guilty to fraud and agreeing to pay a $60 million fine in a case that had no connection with the pension fund. BT swiftly and forthrightly dealt with the accusations and put the matter behind it in a few weeks. But the Teamsters Central States, which was implicated in its own case of corruption in the 1970s, still bears the sting of that unsavory reputation, no matter how obsolete now.
Why does the fund still operate under a court-supervised consent decree with the Department of Labor after more than 20 years?
Does the decree make the fund more amiable to openness or disclosure, or more accountable to the public? Does it improve performance? The evidence isn't there. In fact, the fund cited a troubled performance period, a need for greater risk diversification and a desire to seek lower fees as some of the reasons for seeking a second named fiduciary, the position Bankers Trust filled before it resigned.
All the decree does is perpetuate the image of the once-corrupt pension fund.
Corruption and fraud happen at many organizations, including unions and corporations and financial institutions, like Bankers Trust. But they typically rectify the conduct and make proper redress, and subsequent reports relegate these acts to historical accounts.
But the Central States' infamous past is dredged up continually, while the court still oversees the fund's investment moves. Why does the stain continue after 20 years?
The stain remains because the fund officials and its government overseers let it, even though the fund appears to have erased all traces of it and to have operated since the late 1970s as ethically as one would hope.
In those 20 years, a whole generation has been born and gone to work, people who never heard of Alan Dorfman, a key figure in the scandal. Four U.S. presidents have served, bringing vastly different policies and appeals. The world has changed greatly since then. Yet the Teamsters Central States still operates under a Department of Labor, court-supervised consent decree.
Why? There are at least two reasons: It has become a source of remuneration for the people involved in overseeing the fund; and it provides an excuse for performance.
A key problem lies with some of the people who oversee the fund. One is Mr. Nellis, quoted at the top of this column, who is the second-ranking staffer at the fund. Mr. Nellis repeated in several phone conversations his excoriations about lying in response to reasonable questions about Bankers Trust's sudden resignation and implications for the pension fund. He attacked the news coverage of Bankers Trust, even though a BT spokesman declared it all right. Mr. Nellis lost sight of where his interest should be, that is, with the fund and its beneficiaries.
No one -- not Mr. Nellis or others at the fund or officials at the Labor Department or involved with the courts -- would say why Bankers resigned, after about a month of becoming a named fiduciary. Now, fund officials again have to spend time and money in selecting a replacement named fiduciary.
The reason might lie in the consent decree. It is supposed to foster accountability, although others involved with the fund also declined to comment.