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<br />CORPORATE REP(
<br />SEPTEMI)L••R 19K
<br />wrested control of PERA away [ran
<br />O-M. Ousdigien, architect of the curve
<br />Pension fund system; and Jonall,
<br />White took over Minnesota's inves
<br />merits as the board's new director.
<br />Now, three years Inver• the actions
<br />thethreeinvesli entboardcritics-1oh
<br />Chenoweth, John Allers and Ousd
<br />glan's successor, Mike McLaren
<br />threaten the structure and philosophica
<br />underpinnings of a government
<br />controlled public pension fund system.
<br />ee, HO ARE THEY AND WH
<br />p� are they determined tosmkth
<br />the �. YY77 state investment board'
<br />the Jahn Allers: On March 12, 1979,
<br />•as• faced with an almost certain demand
<br />or. from John Aliers to quit, lhcn-PERA•
<br />ers director O.M.Ousdigianresigned, effec
<br />ire live June 30, 1979. PERA's board ac.
<br />It- cepted the resignation, ending Ousdi•
<br />1 glan's more than 40.year career at
<br />PERA. At the June 26 meeting,104 days
<br />later, Allers killed a motion to keep the
<br />a former director on 90 days more and
<br />)Y thus allow him the standard cmployee's
<br />nt severance pay. Ousdigian, one of the
<br />)r original a•chiteets of the legislatively
<br />controlled pension fund system, was
<br />e out.
<br />A member of the PERA board of
<br />trustees, Allers is often referred to as the
<br />d driving force behind PERA's campaign
<br />1' to Pull out of the investment board.
<br />t Aspiring as he does to control user a
<br />billion dollars in assets, Allers has little
<br />v in his personal background fo generate
<br />Pensioner confidence. In spite of a trim•
<br />inal record• little formal education be.
<br />yond high school and a job history as a
<br />school janitor, Allers has risen through
<br />the ranks of his own union, Service Em•
<br />ployees International (',ion Local, to
<br />represent upwards of 5,OW school sere.
<br />ice workers. Though given to occasion•
<br />ally b,lfer Political battles, Allers is
<br />nonelheless Popular will, his own union
<br />and rnjoys u solid base Of support on the
<br />PERA board, Most other school service
<br />unions are affiliated with the AFL-CIO.
<br />Mitts's local is not and this fact has
<br />Prompted Minnesuta AFL-CIO presi.
<br />den Dave Roe fo comment that while
<br />lets Is Personally likeable, he is per.
<br />•Ps "misdirected."
<br />R "John Allers is a maverick," says
<br />Roe. "As a union leader, Ice's totally by
<br />n' mmsen. Ito has supported political can.
<br />an didates not supported by organized
<br />I. labor, his own union is not affiliated
<br />with anyone and he pays no membership
<br />of fees to any (parent organization)."
<br />n Allers turned down CORPORATE RE.
<br />I• PORT's request for an interview. (This is
<br />m keeping with speculation that he is
<br />deliberately maintaining a low profile.)
<br />Conversations with fellow union mem-
<br />bers, legislators and PERA staff mem.
<br />bers, hoceeea paint a picture of John
<br />Y Allers as one of the saugltcst, most in.
<br />e Allers
<br />political operators in Minne.
<br />sota Politics —that he can be vindictive
<br />and downright mean.
<br />According to a member of the Legisla.
<br />live Pension Commission• who wished
<br />to remain unnamed, all of Allots's cf.
<br />forts over the last four years have been
<br />centered on getting himself seated on the
<br />PERA board and then gaining control
<br />of both it and the find's uirecior.
<br />PERA's bid to withdraw funds from the
<br />investment board is, according to this
<br />source, Allers's desire to "move with the
<br />big boys. He'd just like to be controlling
<br />a big pile of assets. And there are a lot of
<br />spin-offs from that. All of a sudden he'd
<br />attain a certain level of prominence.
<br />He'd be catered to by the investment
<br />community." If the experience of pri.
<br />vate fund managers is any clue, such
<br />perks would include luncheons, favors,
<br />and, in one case, trips to Hawaii.
<br />Since being seated in 1976, Allers has
<br />successfully maneuvered around two
<br />statutes, one attorney general's opinion
<br />and a lawsuit to remain on Om PERA
<br />hoard. An attorney far. the AFL-CIO of•
<br />Pots the opinion that Alters brazenly
<br />violoted file law in 1978 when, contrary
<br />to the intent of Minresma law 1978,
<br />Chapter 796, Section 8, which in effect
<br />aboashcd Allcrs's term on the PERA
<br />board, Allers remained seated. The
<br />PERA board voted in Alters's favor and
<br />he served fur an estimated two years.
<br />The exact length of his term is hard so
<br />determine. Technically his fens Expired
<br />June 30, 1981. Robert Lassort, PERA's
<br />board chairman (and, 11 should be
<br />noted, John Allers's employee in Local
<br />284). at a baud meeting on Jute 2).
<br />1981- simply "recogoizrd" Allcrs's
<br />claim to the seal and rendered his opin•
<br />ion that it be inged to him for two more
<br />years. No rote was liken or to
<br />"The whole thine (Allers's seat
<br />a farce," assrns the AFL.CIOa
<br />BY mid -September, the issue wi
<br />cided in Ramsey District Call
<br />AFL-CIO, which reoresems in c
<br />19.000 PERA union members, w
<br />that time to unseat John H. ,
<br />again.
<br />Observers in the leeislature wid
<br />Peet that the PERA board is Alit
<br />hicle for further political power
<br />treasurer Jim Lord, a member
<br />state investment board, sees PER,
<br />to pull out of the investment boan
<br />move to acquire power. The meml
<br />PERA's board are political, am
<br />trolling the assets is (the same as)
<br />ing,additional power."
<br />John Chenoweth: A former
<br />broker, Chenoweth is currently if
<br />Of the Minneapolis Municipal Er,
<br />ees Retirement Fund (MMERF).
<br />state senator, Chenoweth (OF
<br />Paul) was agitating for changes of
<br />investment board back in 1973.
<br />1919 his was a largely unheeded voi
<br />the wilderness. On Oct. 12, I979,
<br />Chenoweth charged in a copyrig
<br />story in the St. Paul Dispatch that 1
<br />management of S2 billion in state ft
<br />by the board of Investment had cost
<br />Payers and retirees as much as S183
<br />lion since 1976. Chenoweth release
<br />'I-S. Commerce Department report 1
<br />ranked Minnesota 43rd out of 5o sr,
<br />in net return on investments (5.5 I
<br />cent).
<br />That same day Chenowelh resigt
<br />from the legislature to Ake over the
<br />rectorship of \'s.IERF. PERA had d;
<br />pied [be assistat direcforshipinfront
<br />Chenoweth but, not naming to opera
<br />as Allcrs's front man, Chcnowcsh opt
<br />for MMERF, At first Chenowett
<br />move seemed doomed to failul
<br />MMERF's membership was stead;
<br />melting into PERA as a result of legisl
<br />live action in 1979. More than a few• of
<br />servers wondered at the lime why Chei
<br />oweth would set his sights on a dnerio
<br />acing fund.
<br />Their answer came in the closing me
<br />menls of the 1981 Iegislalhe session. ,
<br />bill, which moved out of commine
<br />without recommendation, was Passed h,
<br />the 1981 legislature enabling Chenoweli
<br />and his fund, SIMI!RF, 10 wtlhdrau
<br />
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