Unions File SEC Complaint Against Reed

In an attempt to box in Mayor Chuck Reed on his worst-case scenario of the city’s pension crisis, a complaint was filed with the SEC on Monday on behalf of three unions. The complaint claims Reed didn’t disclose pertinent information on the pension crisis in forms filed with the SEC and misled investors who helped the city issue $435 million in bonds last year.

The complaint, filed by Christopher Platten, an attorney for the firefighters union, points to the City Council’s issuance of $315 million in Series B/C Airport Revenue Bonds and $120 million in bonds to fund the Convention Center renovation.

“It appears that Mayor Reed told everyone about the $650 million dollar projection except those entities and/or individuals he was required to by law,” the complaint states.

“Over the past year and the last several weeks in particular, the Mayor has been insistent that the $650 million projection was reasonable and in some instances he’s stated that figure was likely to come true,” the firefighters, police and IFPTE Local 21 unions said in a joint statement. “Either the mayor can come clean with the SEC that he misled potential investors or he can come clean and admit he mislead the public. Either way, he must be held accountable.”

In an interview with the Mercury News, Reed called the filing “another bogus complaint full of misrepresentations’’ and “a political trick,” which he suggested unions are using as a means to distract voters from the dramatic increases in retirement costs in the last decade.

This comes on the heels of Platten filing a complaint against Reed with the city’s Elections Commission. Reed and the council are expected to approve language at next week’s session for a pension reform ballot measure in this June’s election.

Josh Koehn is a former managing editor for San Jose Inside and Metro Silicon Valley.


  1. This mayor is hell bent on a ballot measure.  Does not matter what concessions he has already got from the unions.

    He will not sit down with the unions.

    Obviously he has an agenda to crush the unions!

    It is a sad day in SJ when we want to spend 22 million on road upgrades for a baseball BP that will not come.  Where does this hidden money come from?  How much other money have you stashed away under some false name?

    You just spent 40K on a survey to raise taxes!  Voters said NO, and you still want to bring it to a november ballot!

    Where did the fiscal emergency go?  Spend, spend and more is all you do.  How about living in our shoes when we are getting laid off.  I can go on and probably will later when my blood pressure goes down.  Wantto live to next month to get my lousy check.

  2. What did you expect that Reed wouldn’t lie, cheat or steal ? 

    McEnery, Swenson and Wolff bought him or he expects his payoff to be big legal fees, free tickets, be their legal council and A’s Board seat from them after he leaves City Hall

    Reed and friends give millions in low priced city land, grants, tax subsidies, city parking leases, city stadium lands and free city services so they can make billions

  3. Reed says $650 Mil is a realistic number! Then why did he not disclose that number to the SEC when he floated his bond of $315 mil to improve the Airport? SEC wants to know because if $650 mil is an actual number to be concerned, then SJ’s Credit rating would have dropped. So this is a Fraud which is a Felony! If he says $650 mil is not a big concern, then he mis-represented the Fiscal Emergency and did Ethics violations. Mayor Burns you cannot have it both ways! Come clean and get out before it is too late! As they say in Chess “CHECKMATE!”

    • “Then why did he not disclose that number to the SEC when he floated his bond of $315 mil to improve the Airport? “

      Wasn’t that bond floated years ago; while the $650k number was floated months ago?

  4. IMAGINE THAT! The rules committee denied “the unions” access to information about the FALSE $650 million dollar claim by Mayor Greed and the Inept City Council. Claiming they will release the Information ………………after the November Ballot! . Rules Committee that includes P. Constant and P. Oliverio and the rest of “Greeds” allies. I guess thats what you call “SUNSHINE REFORM OR OPEN GOV.” All of these individuals are as crooked as they come. This city is quickly circling the drain.

  5. Kindergarden emotional reasoning are taking over in the big city at the foot of the bay.  Name calling, smear campaigns, stupid complaints and whinning are designed to discredit the messenger who’s bringing the rank and file union members the bad news that we’ve run up pay and benefits to totally unsustainable levels and that the world has changed and we’re gonna have to change with it if we want to keep offering basic city services.

    So whine, cry, complain, rally, picket, slander and vent…but realize that your sons/daughters and grandchildren will be paying the price for this debacle for decades, long after you check out to take the RV cross country or sail off on the yacht. 

    Public Sector pensions, compensation and benefits (including sadly Social Security) is a joke with fraudulent ponzi scheme type math used for decades and ignored with a “wink and a nod” as the powers that be took turns scratching each others back.

    The tactics of division and denial are powerful and effective, and potentially could increase the debacle that us younger folks inherit when you folks finally move on with you double dipping pensions (disability and full retirement pay.)  I’m pissed off, but the children want to throw tantrums and complain about how mean the grinch is.  And they are supposedly the adults in charge.  Thanks baby boomers and allied bottom feeders.

    • “Name calling, smear campaigns, stupid complaints and whining…”

      But Blair, you are describing Reed’s standard operating procedure for political campaigning and governing.  Don’t hold his political style against others now that he and the Mercury News have legitimated this type of public discourse. 

      Or are you suggesting city workers shouldn’t have access to the same rules followed by the mayor and the Merc? Can’t workers push back?

    • Blair its always a shame when people open their mouths without knowing what they are talking about. You dont get Disability and a full retirement. you can get a disability retirement, payments will be based on time served. So please try to get off the Mayors “Gravy Train” and start trying to educate yourself.Did you know that statewide pensions account for no more than 3% of total budget? yet Its the Pensions that have brought down San Jose, Right. No one , not the unions , not the residents, not the city council are saying pension reform is not needed, it absolutely is. It just doesnt have to be done by villainizing the very workforce that keeps this city safe and running. City workers have given the Dishonorable Mayor everything he has asked for and still its not enough. the workers have asked for open and public negotiations the City wont do it. The workforce offered a plan that would have saved the City $500 million dollars in 5 years , Instead the Mayor wants workers to prefund their pensions in 5 years. Workers would have to give up 5% per year for 5 years, is this fair? Did you finance your home for 5 years? no everything is 15,20 or 30 years. currently public safety contribute between 16 and25 % of their income into their pensions. The Mayor would have you believe workers get free medical and dental and contribute nothing to their pensions. nothing could be further from the truth. you will just never hear him or any councilperson or “the Merc” give you those facts , but you are free to check it is public information. so please do your home work and stop following the Dishonorable,deceiving,lying ,cheating Mayor blindly

    • Blair for a second I thought you were talking about Chuck Reed when you went into you rant about dishonest smear campaigns and name calling. 

      Was it not Reed who first said the cops were on the “Gravy Train”?  Was it not Reed who refused to allow union negotiations to be a public affair?  Was it not Reed who falsified statements regarding the real cost of the pension system?  Was it not Reed who cut wages (10%) with one hand and handed out millions of dollars in land to Wolff with the other?  Was it not Reed who voted for all these union contracts and pension obligations?  Was it not Reed who ran the RDA debt close to 3 billion dollars?  Was it not Reed who failed to pay the cities contribution into employee pensions during the good years, and pissed the rainy day profits away. 

      Why do you keep defending him?  Do you think he is above reproach and should not also be held accountable for the fiscal state of the city.  He has been spending your tax dollars on everything except what it important.  He has stomped on collective bargaining and thrown caution to the wind regarding the rights of the cities employees. 

      Reed ran the RDA light a giant credit card.  Now instead of accepting blame for saddling the city with billions in debt he blames the city employees. 

      Do you really think the employees want to bankrupt the city?  No!  They want it as healthy as can be because they don’t want to see their lousy pay reduced to nothing because of some Bankruptcy judgement.  The unions are willing to negotiate and have come to the table humbly and willing to work, but Reed has done nothing of the same. 

      At the end of the day Reed can blame his employees and manipulate the numbers anyway he likes.  There will always be people like you who will believe him, due to misinformation and low IQ’s.  Reed may win the war but history will regard him as a man of shallow character, crafty dishonesty, and the great destructor of a once proud and competent workforce.

    • don’t have a yacht or an RV.  I live a simple life as a retiree.  Pay my morgage, monthly bills.  I don’t get 90% of my salary.  Did not want to work 30 years.  Did not take a disablilty retirement dispite 9 work related surgeries.  Pay over 4k in medical benefits a year regardless that the MN prints we get free medical.

      Working a seperate non job, non city related second job to make ends meet so maybe I can take a vacation.  Not double dipping like a disabilty retired council member.  You need to get the facts.  The MN even printed an opinion from some guy that retiress get bonuses.  They know this is a flat out lie but then they are anti pension as well.

      Before you ramble do a little research before you post.

      Thank you.

    • Blair,

      Time to pull your head out of the sand!  You say so much crap that I cannot even begin to respond.  Stop drinking the mayor’s cool-aid.  He is the biggest liar this city has ever seen.  Followed by his 5 court jesters, a city manager who will not step up and a city attorney who must have had his tongue or other parts cut off.

      This city is going down and my house is up for sale.  Good Luck, I will never pay for more taxes, approve a ball park, and watch a great city turn into Oakland.  Five killings so far!  I wish you the best. 

      By the way, you described council member Pete Constant to a tee, thank you!

    • Probably shouldn’t have posted a rant after a long night class lecture, but oh well. 

      Anyway, it wasn’t fair to quip about yachts and RV’s as most retirees are not in the department head or 30 years of service category and often are focused on making ends meet with a fixed income in a high cost area.

      As far as Reed and the facts, I’ve invested a couple of year in grad school examining the public sector pension issue, and its not about one politician or another, but rather a public policy issue that demands attention in the face of a diminished tax base, increased demand for service, and increased overhead in terms of “defined benefits” that are built upon overly optimistic investment return numbers which led to insufficient savings and investment.

      This ain’t just a municipal problem, the whole country is facing some tough numbers in the near future and prudence suggests a realignment of both promises and expectations.

      With empathy, I suggest that current employees be grandfathered as much as possible, especially those within a few years of retirement.  I also suggest that existing pensioners be grandfathered in terms of not touching existing benefits unless criminal fraud can be proved.  In terms of new hires, I suggest allowing them the freedom to enjoy some form of a pension (it really does help with retention) while also encouraging them to invest and save on their own for a better standard of living after retirement.)

      BTW – If someone retires from the CoSJ and then goes to work full time for a CalPERS agency, do they enjoy both a full pension paycheck as well as the other agencies pay as well as a new vesting in a second retirement?  Would it be wrong to ask them to not draw the pension while continuing to work full time in the public sector, or is this an entitlement rather than a pension?

  6. So let me get this straight.  Reed refuses to disclose to anyone where he got the figure for Retirement spending in the future.  The rules committee (Pierlouigi Oliverio, Pete Constant, et.al) denied the motion to debate where these numbers came from.  AND NO ONE SEES ANYTHING WRONG WITH THIS?  These crooks are the only ones using any political motivation to do anything!  To bald-face lie about why they are doing what they doing, the people deserve the right to know!  For good OR for bad.  They are not representing anyone but the rich and priviledged, the construction cronies, and their interests.

  7. Wow, Chuck did just want everyone thought he would.  With his buddies on the council at his side.  He refused to produce any documents or even allow a investigation into how the city came up with a 650 million pension projection.  In other words “I don’t care what you other 5 on the city council think or want.  And since I have 6 votes to your 5, screw you”

    Chuck will not change the ballot measure wording, he is so hell bent on a ballot measure on pension reform he is just making stuff up as he goes along.  So much for open government!

    But he can move forward on a 22 million road improvement for a BB stadium that will not come.  How much more money is the mayor hiding?  There is no fiscal emergency but we do need fiscal accountability from the mayor and council.  Seems city manager has gone quiet again and do we even have a city attorney anymore?

  8. “So whine, cry, complain, rally, picket, slander and vent…but realize that your sons/daughters and grandchildren will be paying the price for this debacle for decades, long after you check out to take the RV cross country or sail off on the yacht”.-Blair Whitney

      When you put it like that, you really DO sound crazy! RV?  Yacht?  What planet are you from?  You must really think the people of San Jose are stupid to believe that all Firefighters, Cops and City employees live that well.  News for you buster, most of them have to have two jobs in the household to survive, and to afford living here in San Jose.  Over 75% of the Fire Department lives OUT of San Jose because they cant afford to stay in the city they serve. And with people like YOU around, who can blame them. Keep dreaming, and keep drinking the Kool-Aide.

  9. “The tactics of division and denial are powerful and effective, and potentially could increase the debacle that us younger folks inherit when you folks finally move on with you double dipping pensions (disability and full retirement pay.)  I’m pissed off, but the children want to throw tantrums and complain about how mean the grinch is.  And they are supposedly the adults in charge.  Thanks baby boomers and allied bottom feeders”.-Blair Whitney

      You need to get a job, a clue and some common sense.  Not necessarily in that order. Throw your temper tantrum where it can do the most good-at the corruption in City Hall.

    • I agree with sending any info to The Unit.  I thought they might like to see the document that had all the major contributors to Chuck’s Yes on V and W campaign; the major land developers and all the Chamber of Commerce and other wealthy hangers-on and wannabe well to do.  i am sure The Unit might like to connect the dots and see where that might lead them.  But I am not satisfied with the media spotlight being shined on these arrogant cockroaches and simply watching them scatter. No.  I would like to see Federal intervention, for they have the resources and authority to dig far and deep into the workings and back room dealings of the self important, ethically challenged, who feel they are above the rules that us mere mortals must follow. I am willing to bet this might make the Bell, CA scandal look like a Sunday picnic.
      To that end, I would like to point out that the FBI has a Public Corruption Task Force that just loves to receive tips.  The San Francisco office has a tip line: 800-376-5991.  I am SO looking forward to seeing some of our haughty politicians, in handcuffs, doing the “perp walk” as they get stuffed into the back of the FBI van; all in front of the news cameras.  (But I bet the Mercury News will say they were framed!)

  10. Reed is taking this city off the legal deep end and the only ones who win will be the lawyers.  Reed says that the $650 was a professional staff estimate, so where is the back up…oh that’s right there is none—Thank you SJI for keeping them honest, or at least trying.

    See what one councilmember said when interviewed this weekend on KGO:

    Also see the NBC news report on the SEC complaint:

  11. Why isn’t the SJPOA mentioned in the article.  They too are fighting as well are they not?  Unfair reporting.  Mentions three Unions but only Fire by name.  B.S.

    • You are absolutely correct. Both P.D. And F.D.  and all the other unions are in this fight for fairness , together.  P.D. and F.D. are working together (as they should) to to unite all the hard working employees of this City.

  12. Right now my plan is to give both parties what they want.

    Vote for someone else besides Reed when mayoral race for SJ comes up. 1) He misrepresented the value of the pension debt and has not stated he was in error. The number was big enough ($400MM) that he didn’t need to misrepresent. While he may have lost some clout with the unions by admitting he was wrong, he’s losing a lot more now by not admitting his error and losing vote. He’s lost this one for sure. 2) He’s too chummy with developers. He’s burning tens of millions of SJ cash to give buy and sell land cheap to Wolff (A’s baseball stadium).

    Vote for Reed’s pension reform. Pension reform is needed. $400MM is still a huge amount. While a step in the methodology was wrong the intent and purpose was correct (union leaders admit reform is needed).

    • I say do it! The employees are going to come out on the better end once we take it to court. YOU are going to come out on the worse end for voting on something that was illegal, which is going to cost millions of dollars in taxpayer money for the City to try and fight it in court. At this point, I don’t care what you do. I am so over it. Citizen threats of voting for the ballot reform does not phase me, because I KNOW what is coming for you. Knock-yourself-out.

    • Nobody but Nobody is saying Pension reform is not needed , it is. but lets get it right its between $290-$320 million , no where near $400 or $650 million . the workers offered $saving of at least $500 million . This Mayor could have and should have accepted the offer instead he is pushing his ILLEGAL Ballot Measure that will cost this City Millions upon Millions of Dollars only to lose in the Courts. This Ballot measure will further hurt the City because who in their right mind would want to come and work for a city that is not even close to matching surrounding cities benefit package. Employees from all departments are jumping ship……..to go to work at other cities. This mayor has refused time and time again to participate in “Public and Open Negotiations” Why ????? didnt he run on “Open Gov.”? Did he not say ” NO LYING , NO STEALING AND NO CHEATING” I guess he meant for everyone else not named Rufus Reed

  13. Mayor Reed continues to use the $650million number as recently as YESTERDAY 3/1/2012 on the Armstong and Getty Show.


    reed says that $650million “continues to be a realistic number” for pension costs. He also makes the false claim that City employees AND their SPOUSES get “Free medical care for life” after working for the City for only 15 years.  Reed continues the yarn spinning by claiming that employees retire with “90% of their salary” while leaving out the FACT that it takes 30 years service in the police or fire departments to earn the 90%…

  14. The employees and unions KNOW that pension reform is necessary. Everybody just wants it done legally and not with the mayor and half of the council lying to everybody. The mayor did not need to go to the public and preach all of those lies to turn the public against the employees, in order to create a rage…just to get his way. It just wasn’t necessary. The employees KNOW that the administration mismanaged the taxpayer’s money…the PUBLIC just does not know it. We are on YOUR side. We WANT the city’s neighborhoods strong and well taken care of. That is what we were hired for; to make sure that you are taken care of. All everybody wants is the truth. That is what is at the basis of this fight. The mayor is trying to push something that is not legal and the employees and unions are not going to let that happen. If the City were bring it in, legally, the employees and unions are willing to accept what is fair. If they want to push what is not legal down our throats…we are going to fight. If you are going to be upset, it should be with the administration who are telling the lies and creating the havoc. If it weren’t for that, we would have been done with this, already. Other cities are able to sit down with their employees and unions and work things out. Why couldn’t we??? It’s because your mayor is pathetic.

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