Institute Led by ‘Vulture Fund’ CEO Hosts Mayor Reed for Pension Reform Conference

First he behested $200,000 on behalf of a shadow group under John Arnold, the former Enron executive who helped crash California’s economy before making big bucks as a hedge-fund manager. Then he acted as chief requester for $50K from Richard Riordan, the former mayor of LA, and matching denomination from George Hume and Michael Mortiz, a couple of pension-busting obsessed businessman in Silicon Valley.

Now, San Jose Mayor Chuck Reed, in his quest to put a state pension reform measure on next year’s ballot, appears to be buddying up with the Manhattan Institute and possibly its chairman Paul Singer. The founder of $21 billion hedge fund Elliot Management, Singer is an ardent supporter of The One Percent and vocal critic of public employee pensions.

Elliot is considered one of the biggest “vulture funds” in the world, according to the New York Times. A vulture fund buys distressed bonds for pennies on the dollar from nearly bankrupt countries and then sues the pants off of government entities when they default on payments. This kind of speculation is part of what kicked off global economic calamity—not sexual apathy in Japan.

Just last month, Rolling Stone writer Matt Taibbi wrote about Singer and Elliot Management’s role in looting pension funds from Rhode Island.

According to Reed’s office, the Manhattan Institute is paying for the mayor’s flight to New York so he can talk shop Thursday at its pension reform conference. Reed is one of three keynote speakers, including Riordan, who apparently suggested Reed as a speaker. The mayor will then jet over to Washington D.C., courtesy of PEW Charitable Trust (partner of the Arnold Foundation), to take part in a retirement reform summit on Friday.

Reed will pay for his meals while the city picks up his hotel in New York and return flight from Washington D.C., the mayor’s office said, noting that he is also expected to take part in other meetings on city business.

Josh Koehn is the managing editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected] or follow him on Twitter at @Josh_Koehn.

11 Comments

  1. Loooks like the Mayor enjoying his 15 minutes of fame.  Seems to be all about him, and not what is good for San Jose.  As Police and Firemen flee, and children are being killed.  Of course the 1% do not care about this either… Great reporting if only the Mercury would spell it out on who the Mayor is in bed with.

  2. Ah yes. If only those pesky bond buyers would quit expecting to be paid back then public employee pensions could keep going up forever.

      • It’s NOT only San Jose, Smokey. It’s any city that is subsidized by their State and/or by the federal government. And that’s just about every city in the USA. Take away the grant money that Washington recklessly throws their way and we’d find out just how much these supposedly well run cities and counties, water districts, transportation agencies, affordable housing agencies, fire and police departments etc. can truly afford to pay their workers. The true cost is now being absorbed by Uncle Sam who is currently 14 trillion dollars in debt. So even when disgruntled, demoralized SJ public safety personnel sell their services to a higher bidding City it’s still ME that’s paying their salary and pension in the form of federal tax and devalued currency.
        In the meantime, despite the fact that I don’t trust Chuck Reed’s motives he’s one of the few politicians who’s trying to bring some intellectual honesty and fiscal sanity to this enormously destructive situation.

        • You honestly think Greed is doing this for the betterment of San Jose? He’s doing it for the betterment of Mayor Reed. Look and see who he ends up working for.
            Im still trying to figure out “Intellectual Honesty”? He has been proven to be a Liar, a cheat and a thief. If his motives were to help San Jose , then why did he refuse to look at labors proposal that would have had a guaranteed $500 Million dollars in immediate saving to the city? When measure B is overturned, and it will be, what will the savings have been? Nothing. he had every opportunity to negotiate but he flat out refused .

  3. I have had some personal experience with vulture investment firms.  My grandparents own a mobile home in De Anza Mobile home park in Santa Cruz.  Sam Zell’s investment firm Equity Group Investments bough the property and immediately began suing the City of Santa Cruz for their rent control agreement.  Obviously the firm knew they were buying a property with rent control in place but they didn’t care. 

    They continued to sue the Cit’y until they finally caved in a revoked their rent control because they couldn’t afford to fight the relentless lawsuits brought on by the firm.  The old folks living in the park lost everything.  Their space rent which was 400 dollars became 1700 plus.  Now their properties are worthless and some were even sold for as little as a dollar.  They opened the door to similar rent control issues all throughout the state leaving countless people out in the cold.

    My point is “Vulture” investors are the kind of firms that put little old ladies out on the street and don’t even blink an eye.  A little old lady that did nothing wrong thinking she was buying a mobile home with a rent control agreement in place.  This is disgusting and Mayor Reed is in bed with them.

    • Not only is Mayor Reed in bed with them, but would-be Mayor Sam Liccardo is being mentored by Chuck Reed. A Google search of Paul Singer shows a man with no scruples, who has made billions of dollars destroying companies, sending thousands of jobs to China, decimating the middle class of America. He is an evil person, and anybody affiliated or enamored by his style of doing business is just as evil. Sam Liccardo is one degree seperated from Paul Singer.