My response to the Report, "Six Figure Civil Servants," by the Citizens Budget Commission was printed in the Chief-Leader:

On reading the recent report by the Citizens Budget Commission, “Six Figure Civil Servants,” one has to wonder just who the “citizens” are that the CBC claims to represent. The CBC, in claiming that municipal workers are overpaid and have too generous health and pension benefits, seeks to pit Union members against hard working taxpayers who are not members of the municipal workforce. Is there, in fact, a natural antagonism between the average New Yorker and the average municipal worker? Does the average store owner or salesperson lose when City workers are paid decently? Or is there an elephant in the room that the CBC doesn’t want to talk about?

When this Union asked the CBC for a list of the total compensation of their Trustees, CBC researcher Maria Doulis said she could not provide this, nor a list of compensation for CBC staff. Let’s turn the spotlight on the CBC for just a few moments.

What is the CBC? The Board of Trustees of this organization are, in the main, financial and real estate magnates. The latter don’t work for a living, they only profit because they own land and buildings, often because they inherited them. The financiers are experts in helping the very rich avoid paying taxes. One such firm represented on the CBC’s Board is KPMG (Mr. Stephen F. Langowski). In 2005, his firm was fined $456 million for “designing, marketing, and implementing illegal tax shelters.” (U.S. Department of Justice, press release, 10/17/2005). Another CBC Trustee is Arthur Siskind, of the News Corporation. In March of 1999, the Economist magazine discovered that News Corp. paid just $250 million in corporate taxes worldwide – just six percent of its profits, at a time when US Corporate tax rates were over 30%.

Many CBC Trustees are probably now worrying about the recent moves by the IRS to force the Swiss bank, UBS, to close hidden offshore accounts of many their clients – accounts which are used to avoid paying taxes. They’re also upset, no doubt, about subpoenas issued by federal agencies to companies represented on the CBC’s Board of Trustees looking into “bid-rigging, tax evasion, and other wrongdoing throughout the municipal bond business,” to quote the New York Times. JP Morgan has been served with papers, and Eric Altman and Seth Bernstein of JP Morgan sit on the CBC’s board. So does Sonia Toledo of Merrill Lynch, who is also a Trustee of the CBC and whose firm was also served with a subpoena in the municipal bid-rigging scandal. Bid rigging in the municipal bond business means that companies are alleged to have formed a cartel, scamming cities (read, taxpayers) by unfairly jacking up prices for their services.

Then there are companies like Plainfield Asset Management, LLC, whose Harold Levy also serves as a Trustee of the CBC. According to its website, Plainfield “manages investment capital for institutions high net worth individuals.” I wonder if Plainfield is helping these high net worth individuals avoid New York City and State taxes, and I call upon the CBC to investigate whether Plainfield’s clients have shorted the City on revenues. Don’t hold your breath. Then there are companies on the Board of Trustees like Fitch Ratings (Richard J. Raphael), which notoriously enabled the subprime loan market to flourish by giving bonds higher ratings than they deserved.

The elephant in the room is the ability of the wealthiest New Yorkers to hide from government scrutiny and game the system to avoid paying taxes. If they were to pay what they ought, I suspect that no one would be concerned about Union members making decent wages and benefits which allow them to stay within the middle class (which means being able to raise a family and not facing impoverishment upon retirement).

Additionally, the CBC’s analysis of worker salaries conveniently leaves out DC 37’s lowest paid workers, our thousands of seasonals and part-timers. But if those numbers were factored in, the CBC’s report would lose its catchy title.