Gov. Pat Quinn created Squeezy the python to illustrate Illinois' pension problems. But the depiction is as misleading as Illinois' fraudulent bond-selling practices and previous pension "reforms."
The snakes putting the squeeze on state employee pensions were inside the capitol, not outside.
The federal Securities and Exchange Commission and Illinois just settled a securities fraud case for failing to disclose between 2005 and 2009 the depth of the pension problems to bond buyers. Illinois sold more than $2.2 billion in bonds during that time.
Turns out the legislature's 1994 pension reform plan was never going to stabilize the funds. There was too little money set aside in the early years, and excessive balloon payments later -- when most of the people who enacted the plan would be sitting at home, collecting their state retirement checks. In 2006 and 2007, lawmakers took a pension holiday and made only partial payments into the funds.
No wonder Illinois' pension funds are almost $100 billion underfunded, the worst in the nation.
The SEC action is mostly symbolic. Illinois won't have to pay a fine or even admit to wrongdoing -- although why promise to "cease and desist" if it was doing things right before? The state probably will still get a favorable interest rate at its next bond sale.
But the SEC case makes it clear why Illinois is such a mess. And it should remind the public to look with a skeptical eye at any new pension deal. No telling how many snakes in Springfield are ready to pull another fast one.