On Elder Abuse Awareness Day, Let's Target State Pension Looting

State and local pension looting by Wall Street harms the elderly and is, by definition, elder financial abuse.

State and local pension looting by Wall Street harms the elderly and is, by definition, elder financial abuse. Why have states been unwilling to prosecute pension scammers—even when exposed— under state elder abuse laws?

Today I received a message from my financial adviser Charles Schwab & Co. informing me that “June 15 marks an important day on our calendar – Elder Abuse Awareness Day. It is a day for communities worldwide to unite in bringing attention to the challenges and difficulties faced by elders and our collective responsibility to protect and support them.”

Elder Abuse Awareness Day? This was news to me.

There were two immediate takeaways from this Schwab notice:

First, while World Elder Abuse Awareness Day was launched on June 15, 2006 by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations, most Americans—like me—are probably unaware of a global initiative. Second, it was reassuring to witness at least one reputable Wall Street firm—and there may very well be others—telling clients it both recognizes the problem and is proactively seeking to address it.

The good news is that Wall Street is warning clients about a significant and growing threat to the financial well-being of seniors. Wall Street acknowledges “our collective responsibility to protect and support” elders.

Wall Street acknowledges “our collective responsibility to protect and support” elders.

Anyone interested in protecting the financial well-being of seniors would be well-advised to look closely at pensions established to provide for their retirement security—particularly the Wild West of state and local pensions which lack any comprehensive regulation, or oversight. The fiduciaries overseeing these massive funds lack any investment expertise, are regarded as “the dumbest investors in the room,” and are routinely scammed.

Over the past decade-plus, I have conducted forensic investigations of the state pensions of Rhode Island ($9 billion), North Carolina ($100 billion), and Ohio ($90 billion). In all three states, I have exposed billions in undisclosed and questionable investment fees and expenses, fiduciary breaches and potential violations of law— all of which I have reported to state and federal officials, regulators and law enforcement.

Does mismanagement and looting of state pensions established to provide retirement security amount to elder financial abuse? I think it clearly does. Yet when I tried to persuade the Attorney General of Rhode Island, years ago, to take action under state elder abuse laws to end looting of the state pension by Treasurer, later Governor Gina Raimondo and her Wall Street supporters, my efforts fell flat. He wasn’t about to undermine political fundraising in the state (including his own) by putting an end to pension skimming. In short, the use of elders’ retirement assets to further the ambitions of local politicians had to go on…

All states have laws designed to protect older adults from elder abuse.

According to the Department of Justice, the federal government, states, commonwealths, territories and the District of Columbia all have laws designed to protect older adults from elder abuse and guide the practice of adult protective services agencies, law enforcement agencies, and others. These laws vary considerably from state to state.

The American Bar Association provides a chart which summarizes the definitions of types abuse in adult protective services and elder abuse law in each state.

Elder financial abuse generally falls under the definition of “exploitation” in state law.

• Exploitation in Rhode Island

The Attorney General of Rhode Island was unwilling to take action under state elder abuse laws to stop looting of the state pension by Treasurer, later Governor Gina Raimondo and her Wall Street supporters.

While the definition varies from state-to-state, in Rhode Island “exploitation means the fraudulent or otherwise illegal, unauthorized or improper act or process of an individual, including, but not limited to, a caregiver or fiduciary (emphasis added), that uses the resources of an elder for monetary or personal benefit, profit, gain, or that results in depriving an elder of rightful access to, or use of, benefits (emphasis added), resources, belongings, or assets (emphasis added) by use of undue influence, harassment, duress, deception, false representation or false pretenses.

In summary, my findings in Rhode Island exposed that pension fiduciaries were deceiving stakeholders as to skyrocketing fees paid to Wall Street—a wealth transfer that slashed benefits paid to elderly retirees, as it enriched supporters of the political regime.

Using the assets of elders to secretly enrich others sure sounds like actionable “exploitation” to me.

My findings in Ohio emphasized that the pension fiduciaries not only deceived stakeholders as to fees paid to Wall Street but denied public access to records that would have confirmed the true amounts.

• Exploitation in Ohio

In Ohio, exploitation is defined: The unlawful or improper act of a person using, in one or more transactions, an adult or an adult's resources for monetary or personal benefit, profit, or gain when the person obtained or exerted control over the adult or the adult's resources in any of the following ways: (1) Without the adult's consent or the consent of the person authorized to give consent on the adult's behalf; (2) Beyond the scope of the express or implied consent of the adult or the person authorized to give consent on the adult's behalf; (3) By deception; (4) By threat; (5) By intimidation.

My findings in Ohio emphasized that the pension fiduciaries not only deceived stakeholders as to fees paid to Wall Street but denied public access to records that would have confirmed the true amounts.

Misrepresentations and lack of transparency regarding assets set-aside for elderly retirees? If that’s not actionable, what is?

• Exploitation in Minnesota

In Minnesota—where I am currently conducting a forensic investigation of the $28 billion state teachers pension on behalf of the Minnesota Educators for Pension Reform Facebook group, financial exploitation includes (a) In breach of a fiduciary obligation recognized elsewhere in law, including pertinent regulations, contractual obligations, documented consent by a competent person, or the obligations of a responsible party under section 144.6501, a person: (1) engages in unauthorized expenditure of funds entrusted to the actor by the vulnerable adult which results or is likely to result in detriment to the vulnerable adult.

It’s too early to talk about my findings in Minnesota but not too early to ask, perhaps the Attorney General of the state: Does Minnesota elder abuse law potentially cover breaches of a fiduciary obligation (recognized elsewhere in law) regarding state retirement assets?

Now, I am no expert on current state Elder Law. Nevertheless, I think it is important to ask the question: If state and local pensions, established to provide retirement benefits for aging government workers are being looted by Wall Street—by money managers who are hired as fiduciaries to invest these assets—does state elder law provide any protection? If not, why not?