City Hall's biggest pension doesn't go to a police superintendent, fire
commissioner or even an alderman.
It's paid to a former steamroller operator named Dennis J. Gannon.
But Gannon's City Hall pension -- $153,649 a year -- isn't based on what he was
paid as a steamroller operator and foreman for the city's Department of Streets
and Sanitation.
Instead, Gannon took advantage of a little-known state law that allowed him to
base his taxpayer-supported pension on his much-larger salary as president of
the Chicago Federation of Labor, a private organization that represents more
than 300 unions affiliated with the AFL-CIO.
And he didn't even have to retire as the federation president. He's still in
that job, which paid him $215,484 in 2007, the most recent figures available.
Thanks to that law, Gannon now collects a city pension that's nearly three times
what he made at City Hall. He began collecting that pension five years ago, when
he was 50. By the time he turns 70, that city pension will have paid him a total
of more than $3 million.
Gannon is perhaps the city's most prominent labor leader. When Mayor Daley was
seeking cost-cutting concessions from city workers this summer, he turned to
Gannon -- and largely got them.
Dates back to 1957
Gannon defends his city pension deal.
"I'm probably not the only labor guy taking advantage of that state law,''
Gannon said.
He's right. A Chicago Sun-Times examination of the state's 17 largest government
retirement plans found more than five dozen retired government workers whose
pensions are based not on their public salaries but, instead, on what they were
paid by labor unions, lobbying groups and other non-governmental organizations.
The practice goes back to at least 1957, when Illinois legislators passed a law
allowing employees of the Illinois Municipal League -- a non-governmental agency
that lobbies Illinois lawmakers on behalf of suburbs and cities -- to be part of
the state's generous pension plan. Other laws expanded the practice.
Among those who've benefitted:
• Reginald L. Weaver, a former elementary school teacher in Harvey, gets a
yearly state pension of $226,485 based on his salary as president of the
National Education Association in Washington, D.C. He began collecting his state
pension in August 2008, a dozen years after he took a leave of absence from the
Harvey schools to become a labor leader.
Weaver, 70, has 44 years of service with the Illinois Teachers' Retirement
System, including 12 years with the NEA and the Illinois Education Association,
two labor groups representing teachers. Weaver contributed about $200,000 toward
his state pension, state records show, while the unions contributed about
$492,000.
"It's unfortunate that people focus on a pension rather than why kids in urban
areas aren't receiving the education they should," Weaver said. "Those are the
kinds of things I wish people would focus on.''
• Kenneth Alderson gets a state pension of $175,479 based on his pay as
executive director of the Illinois Municipal League. Alderson, a onetime state
employee, spent 36 years with the lobby group. Before he retired in January
2008, the league gave Alderson several raises that helped him get one of the
biggest pensions from the Illinois Municipal Retirement League, the state
pension plan for local governments.
Alderson contributed $148,678 toward his state pension -- he has already
recovered all of the money he invested -- while the Illinois Municipal League
contributed $1.7 million toward his pension, according to Louis Kosiba, the
retirement plan's executive director. While Alderson gets to benefit from being
in a government pension plan, his pension won't cost taxpayers any money, Kosiba
said.
• James J. McNally, another former steamroller operator for the City of Chicago,
gets an annual city pension of $114,935 based on the salary he made as business
agent for Local 150 of the International Union of Operating Engineers. His
pension is twice his final city salary as a foreman of steamroller operators.
McNally, 53, started working for the city when he was 18. As a city employee,
McNally was a member of Local 150. He went to work for the union in 1995 as its
business manager, helping negotiate contracts with government agencies,
according to the union's Web site.
Credited for union service
While McNally worked for the union, he remained in the city pension plan,
getting credit for his years of service with the union. He had 34 years of
combined service with the city and the union -- enough for a maximum pension --
when he decided to retire in March 2008 so he could collect his city pension.
Shortly after he retired, McNally was appointed vice president of Local 150.
McNally contributed nearly $271,000 toward his pension. So far, he has collected
more than $160,000.
"I really don't know how I found out about this," McNally said of the pension
law he took advantage of. "I had to pay the city's portion, as well as my own
portion. It was a financial hardship on me. I guess good things come to those
who wait."
Gannon's pension deal is just like McNally's. Gannon was 19 when he started
driving a steamroller for Chicago's Department of Streets and Sanitation in
1973. He'd moved up to foreman, making $55,700 a year, when he took a leave of
absence in 1994 to go to work for Local 150 as business agent. Gannon never
returned to the city payroll -- but he remained in the city pension system,
piling up credits for his union service. He joined the Chicago Federation of
Labor in 1995, while continuing to amass credits toward his city pension.
Since retiring Jan. 31, 2004, under one of Daley's early-retirement programs,
Gannon has collected about $800,000 from his pension. Gannon had contributed
$403,175 toward his pension, including an unspecified amount the Chicago
Federation of Labor was required to pay on Gannon's behalf.
"I worked for the city since 1973," Gannon said. "I got no free meal ticket
here."