Oregon’s Vichy Government

In 1940, the French government surrendered to the invading Nazis.  From June of that year until August, 1944, the French government collaborated with the Germans.  That French government was known as the Vichy government, because of the town in which its headquarters was located.  Initially, Germany allowed the Vichy government to have some administrative authority over parts of France.  By the end, however, the Vichy government became nothing more than the puppet of its German masters.

For the last forty plus years, the government of Oregon has exhibited definite characteristics of a Vichy government.  The legislature, which is supposed to represent the interest of the people of Oregon, has appeared to represent the interests of another power.  A power to which it  capitulated and became a puppet.  That power is PERS and PERS is the undisputed master of Oregon.

In 1971, the Oregon Attorney General withdrew a 1963 opinion and ruled that Oregon legislators could join PERS.  Legislators had been prohibited from doing so from 1945, when PERS was created, through 1970.  That Attorney General opinion was never challenged in court, in the legislature or anywhere else and most legislators ended up joining PERS.  Those legislators surrendered to PERS.  Their resulting conflict of interest caused them to favor the interest of PERS over the interests of the people they were elected to represent.  What the PERS legislators did over the next eighteen years leaves no doubt as to the truth of that conclusion.

In 1975, the legislators passed two PERS laws just for themselves and one law for all PERS members.

  • For legislators only, they provided that anyone who had ever served as an Oregon legislator could retroactively join PERS and they kept this right to retroactive membership  open until January, 1987.  They also made legislators the only persons who could earn retirement credit after the age of 65.
  • For all PERS members, the legislators decided that the people of Oregon would have to guarantee that their employee PERS accounts would never earn less than a minimum rate.  If the actual earnings on those employee accounts was less than the guaranteed minimum, the people of Oregon would have to make up the difference.  Then the legislators gave the PERS members who controlled the PERS Board the right to determine what that guaranteed minimum rate of return would be.

In 1979, the PERS legislators passed the PERS Pick Up law.  The Pick Up law allowed the PERS members who managed each governmental agency the right to make the people of Oregon pay (“Pick Up”) the employee PERS contributions that the employees of the agency were supposed to pay.  Even the employee contribution of the managers who made the Pick Up decision would br Picked Up.  Each employee whose contribution was Picked Up received two separate benefits:

  • First, the money that the employee had previously been contributing to PERS, now went to the employee.  That resulted in an immediate 6% take home pay increase for that employee.  In 2010, PERS estimated that the amount paid to Pick Up employee contributions was $375,000,000 per year.
  • Second, the amount that was Picked Up was not treated as income to that employee for any purpose except one.  It was treated as salary only for the purpose of computing the employee’s final average salary.  That increased the employee’s retirement pension. In 2010, PERS estimated that the amount  required to fund this phantom final average salary increase caused by the Pick Up was $62,000,000 per year.

The PERS Pick Up costs the people of Oregon $437,000,000 per year.  If the Pick Up did not exist, Oregon would be able to use that $437,000,000 per year to make Oregon a better place for all of us.  Instead, the PERS legislators decided that the $437,000,000 would just be used to make things better for PERS members.

In 1983, 84 out of 90 Oregon legislators were PERS members.  That year they passed a law that made all new Oregon judges, as of January 1, 1984, automatic PERS members.  Persons who were judges before 1984 were not required to join PERS but if they did not they would have to pay a 7% penalty to remain unbiased on PERS cases. With this law, the PERS legislators deprived the people of Oregon of fair trials on PERS cases.  In 1994, Oregonians enacted Ballot Measure 8, which eliminated the PERS Pick Up and the Guaranteed Minimum Rate Of Return but the PERS judges declared Ballot Measure 8 to be unconstitutional and preserved those benefits for themselves and for all other PERS members.

In 1989 82 out of the 90 legislators were PERS members and that year they made PERS funding Oregon’s highest financial priority.  PERS must be paid first and if there is not enough money to pay for everything, governments must pay PERS first and cut back on providing the services that they were created to provide.  That’s why K – 12 education has been significantly cut back.  It’s why we have less police officers and fire fighters and why inmates are released from prison before serving their full terms.  And it’s going to get worse.  PERS rates will go up again starting July 1, 2013.

Look at Oregon today and at the level of government services that are provided.  Compare the current services to those that were provided 30 years ago, or 20 years ago, or 10 years ago or ever two years ago.  Then ask yourself if the legislature, which is supposed to represent the people of Oregon, has capitulated to PERS, just like the French government capitulated to the Nazi invaders in 1940.  To me, the answer is crystal clear.  Oregon has a Vichy government and that government is nothing more than the PERS puppet.   In the end, collaboration with the enemy did not work out well for the French Vichy government.  I do not think it will work out any better for the Oregon Vichy government.

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About Dan Re

I am an attorney who has lived in Bend and practiced law since 1981. In educating myself about the Oregon Public Employees Retirement System (PERS), I was shocked at how the PERS laws were changed by the legislature, once legislators were allowed to join PERS in 1971, 26 years after PERS was first created. Those changes personally benefitted the legislators who made them at the direct financial expense of the people they were elected to represent. That is wrong and I intend to change it. In 2009, I started a non-profit 501(c)(4) corporation, In RE The People, Inc., for the purpose of informing concerned citizens of what happened regarding PERS and other issues of social and civic importance. I then created this blog to further that objective.
This entry was posted in fundamental fairness, Oregon judges, Oregon legislators, Oregon legislature, Oregon PERS and tagged , , , , . Bookmark the permalink.

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