Editorial, 09/27/2007 - PERA board should be free of vested interests

How many politicians do you know who’d turn down the chance to have a building named after him or her?

We’re proud to know one: Fabian Chávez, the former Senate Majority Leader and longtime champion of state employees’ retirement benefits.

The board of directors of our state’s Public Employees Retirement Association is planning to replace the PERA building east of the Capitol with a bigger, better one — and it has proposed naming the new building after Chávez.

Thanks anyway, says Chávez — but if it’s all the same to you, I’d be honored to have perhaps my name — and some words to live by — on the room where the PERA board meets.

Those words are from a United States Supreme Court ruling on fiduciary duties — which the PERA board has in abundance:

“Under principles of equity, a trustee bears an unwavering duty of complete loyalty to the beneficiary of the trust, to the exclusion of all other parties.

“A fiduciary cannot contend that, although he had conflicting interests, he served his masters equally well or that his primary loyalty was not weakened by the pull of his secondary one.”

Chávez would like those words to face the PERA board, on which he has served, every time it meets.

He’s concerned — with good reason — that the American Federation of State, County and Municipal Employees is trying to take over the state retirement system. If that happens, he wonders aloud, will the bureaucrats’ union have the best interests of state retirees at heart — or will it guide pension-fund money into investments benefiting the union or advancing this or that political cause?

PERA, on behalf of 72,000 active and retired state- and local-government employees, manages a $13 billion pension fund. That’s a huge responsibility — and it demands scupulous attention to the standards Chávez has set.

Membership on the 12-member board is voluntary — and unpaid. Yet AFSCME has poured thousands of dollars into the campaigns of its candidates for seats on the board. Voting is by mail — and the deadline is tomorrow.

In the last election, the union spent $50,000 to get three people elected in 2004 — half of that for one candidate alone. This year, the three being backed by AFSCME are likely to get less — but still plenty more than the few hundred bucks independent candidates are spending. Much of the money goes into mailings — the kind of propaganda today’s voters tend to see whenever an election approaches.

To which we would ask, as Chávez does: To whom will expensively elected boardmembers give their allegiance: government retirees and the pension fund on which their futures depend, or the union, whose aims might be further afield than the health of the retirement kitty?

That should be among many questions raised by PERA members before marking and sending in their ballots. But it also should be asked — again — by the state Legislature. Last session, the House of Representatives passed a bill putting limits on PERA-campaign spending. The Senate didn’t.

Count on the indefatigable 83-year-old Chávez to collar as many of today’s senators as possible for a change of mind. Sure, AFSCME is a major player in New Mexico politics; one to be bucked only at carefully selected times. This is one such time; PERA’s leadership must remain diverse.