Power Grab in Montgomery

Will the County Council buckle in the face of union bullying?

ISIAH LEGGETT, the Montgomery County executive, is proving to have no more backbone than his predecessor, Douglas M. Duncan, in standing up to the county's powerful public employee unions.

Having negotiated contracts that grant union members far bigger raises than are common in the private sector, plus staggeringly generous new benefits, Mr. Leggett has now bowed to a blatant power grab by the county's main general employees' union. In the interest of county taxpayers, who pay the bills for this unaffordable largesse, the County Council should overcome its own history as a pawn of the unions and say no.

The stakes in the current dispute seem obscure: whether to change the composition of Montgomery's Board of Investment Trustees, which manages more than $3 billion in assets for the county's employee pensions. Three of the board's 13 current trustees are union representatives (up from one out of nine until 2004); under the proposal now before the County Council, the board would grow to 16 trustees, five of whom would be union representatives.

This is a terrifically bad idea. Retirement plans should be overseen by investment experts, not labor figures whose agendas can be, and often are, political. There is abundant historical evidence, in Montgomery and elsewhere, that when investment decisions are tainted by sweetheart deals with union-friendly advisers and other shenanigans, retirement funds suffer. The county itself is responsible for meeting its employees' pension obligations, which are funded overwhelmingly by taxpayers; that also means taxpayers -- not the unions -- would foot the bill for less-than-optimal fund management.

In a deeply researched memorandum, Stephen B. Farber, the experienced chief adviser to the County Council, urged council members to oppose wider union influence on the board. Offering examples of funds that have suffered from union influence, he concluded, "As many jurisdictions (including the State of Maryland) have learned from bitter experience . . . politics and pension funds are a toxic mix."

The unions argue that they merit a greater say in the investments that support their members' retirement benefits. In fact, there are more nonunionized retirees with a stake in the plans -- around 5,500 -- than current unionized workers, who number fewer than 5,000. And the association representing retired county employees is bitterly opposed to packing the board with more union trustees.

Montgomery has long prided itself as a bastion of good government, but the County Council's weak knees regarding organized labor are becoming an embarrassment. The union has made it clear that it will not stop at controlling five of 16 seats on the board. If council members approve this expansion now, it will only lead to further such demands, along with parallel calls by retirees, who currently have just one trustee representative, to increase their own clout. Chances are nil that all this will enhance the management of the $3 billion in retirement assets. When the bill will come due, it will be paid by angry voters.