The city of Detroit has seen better days. Once the home of economic fortune and prosperity in the U.S., now at an all time low and filed for bankruptcy. Reasons for the severe economic downfall are even more depressing. It turns out, shady investments of pension funds, 1. such as the funds' $30 million loan to a cargo airline that filed for bankruptcy months later, according to court records, take a large part of the blame for the economic crisis in the Motor City. Obviously, transactions like these make many citizens question the integrity of those in charge of their pension
However, shady investments were not the only contributor. The theft and laundering was not always so subtle. 2.In some cases, outright fraud was at play. FBI investigations led to the conviction this year of former Mayor Kwame Kilpartick on a variety of charges, including some related to the pensions. In addition, $84 million of the funds' losses have been tied to a corruption scheme. (Hicken 1).Without question, many of the pension fund managers took part in flat out money laundering. 3.These managers have been found guilty of accepting cash, casino chips, and even vacations in exchange for steering pension funds to certain companies.
Clearly, the monitoring of movement and care of such large amounts of money needs to ramp up in Detroit if people expect the economy to change anytime soon. Citizens and politicians have to place people of character and integrity, who keep the best interests of the people in charge of these funds. 4.The pension funds should be managed to benefit retirees, not to line the pockets of public officials.
http://money.cnn.com/2013/08/28/news/economy/detroit-pensions/index.html?iid=Lead
