Weingarten pressuring hedge fund groups to pull the plug on public school reformers

Jun 14, 2013 by

NEW YORK – The financial problems facing America’s public schools are well known.

What’s less well known is that, in many cases, teachers’ pension plans are gobbling up scarce K-12 money that should be going to help kids in the classroom. Educators’ overly generous retirement funds are a major reason schools can’t afford to retain teachers or keep various academic and extracurricular programs running.

The nation’s teacher unions are fearful of the public reaction when citizens start learning about these unseemly arrangements.

American Federation of Teachers President Randi Weingarten is attempting to prevent a potential public backlash by silencing those who are speaking up – or supporting those who speak up – against excessive union pension plans.

Bloomberg.com reports that Weingarten has targeted 33 hedge fund managers who “support groups the labor organization said are hostile to traditional public pensions.”

Those groups include think tanks, such as the free-market Manhattan Institute.

Weingarten says her position is simple: If hedge fund managers want to manage the money of teacher union members, they shouldn’t belong to (or support) groups that advocate changing how public employee pensions are designed.

A little inside baseball: The pension controversy revolves around whether states and school districts should guarantee that employees receive a certain level of pension payout upon retirement (which is hugely expensive) or if they should only ensure that employees receive a certain level of pension contribution from their employer (similar to the 401k plans).

As clients of hedge fund companies, Weingarten and her union cohorts have every right to partner with individuals who share their values.

But Weingarten’s attempt to pressure hedge fund managers and companies into changing their beliefs and severing relationships with others in order to win union accounts is un-American.

In fact, it’s nothing more than union thuggery.

One targeted money manager, Daniel Loeb, is pushing back against Weingarten’s bullying tactics.

Loeb recently announced that he was giving an extra $1 million to New York City’s Success Academy charter schools, just to defy the union boss. Loeb is director of the charter schools, which serve 5,000 students.

“Rather than intimidate me, it had the effect of redoubling my commitment and making me realize how important our work is because these kids face such obstacles,” Loeb told Bloomberg.com.

“Not only do they have the obstacles of their poverty and backgrounds, they’re up against a well-funded institution that’s methodically trying to undermine their education,” he added.

According to the news site, Loeb is the only targeted money manager to stand up to Weingarten.

Two other hedge fund managers issued statements recently that reaffirmed their support of the defined-benefit pension plans that are so dear to the AFT’s heart. They’ll soon be off Weingarten’s target list.

Loeb said his colleagues will have to decide what’s more important to them: Their money (as represented by possible clients) or their principles.

“For me, it’s my principles,” Loeb said.

Weingarten pressuring hedge fund groups to pull the plug on public school reformers – EAGnews.org powered by Education Action Group Foundation, Inc..

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