RSA is in Center of a Political Storm

April 27, 2016

By Brandon Moseley
Alabama Political Reporter

The State of Alabama does not have enough money. There is never enough money to do all of the things that legislators want to do. Poverty, joblessness, declining wages, changing workforce needs, the macro economy are the major causes of Alabama’s failure to bring in enough dollars to meet the needs of Medicaid, the State prisons, and other State agencies. A more specific concern for many legislators is the high cost of maintaining Alabama’s commitment to it’s current and future State retirees.
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Five Things to Watch Next Session  

November 27, 2015

By Bill Britt
Alabama Political Reporter

MONTGOMERY—With the 2016 Legislative Session a little more than two months away, the challenges set before our lawmakers are coming into focus.

A few of the items which will top the agenda are: public corruption, Obamacare, taxes, prisons, and public pensions. None of these issues are new, but the problems continue to mount, unabated.

First on the agenda for the House will be the question of leadership. Speaker Mike Hubbard stands charged by the State with 23 felony indictments of public corruption. Hubbard was reelected Speaker almost unanimously in 2014, primarily due to a dazzling PR campaign that painted the State’s Republican Attorney General as engaging in Chicago-style gutter politics (as stated by Congressman Mike Rogers). Hubbard also garnered votes because many legislators lack the courage to stand-up to the “fearsome punisher.”
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Why is Troy Professor Blasting RSA?

August 5, 2015

By Bill Britt
Alabama Political Reporter

MONTGOMERY—Under the headline “RSA is a poor steward of our retirement resources,” Daniel J. Smith, an associate professor of economics at the Johnson Center at Troy University, recently took aim at the Retirement Systems of Alabama (RSA). Smith, a recent addition to the State, is making a name for himself by issuing dire warnings of the impending collapse of the retirement fund, warnings that RSA Chairman Dr. David Bronner has labeled “demonstrably false.” 
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Bronner Blasts API Study

April 8, 2015

By Bill Britt
Alabama Politcal Reporter

MONTGOMERY—Recently, the Alabama Policy Institute (API), an Alabama-based think tank, released a study claiming the “state is set to spend nearly $1 billion on public pension costs this year alone.”

The study authored by James Barth and John Jahera of Auburn University, says that it recommends three structural reforms to the Retirement Systems of Alabama (RSA), “that identify cost-saving measures overlooked during previous reform efforts.”
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Hubbard Investigation May Reach Inside RSA and Commerce

September 9, 2014

By Bill Britt
Alabama Political Reporter

MONTGOMERY—After months of investigation, the Alabama Political Reporter now believes that a donation of $33,333.00 made to former Gov. Bob Riley’s Alabama 2014 PAC can be linked to a $78 million dollar loan made by the Retirement Systems of Alabama (RSA) to fund Si02 Medical Products. The loan’s genesis began with a $750,000 economic development agreement between the State’s Department of Commerce and CV Holdings, LLC, in 2010.

According to the company’s website, Si02 Medical is a “160,000 square foot manufacturing facility in Auburn, Alabama. The facility houses research and development and the manufacturing of “…silicon-oxide coated containers, utilizing… plasma glass coating technology.”

The company website states that SiO2 Medical Products is a “privately held company… founded and supported by CV Holdings, LLC.”

Bloomberg Business describes CV Holding LLC as a company that  “engages in the design, development, manufacture, and marketing of polymer products primarily for packaging applications. It provides packaging solutions to the pharmaceutical and diagnostic markets; manufactures and fills vials; and manufactures children’s cups, as well as insulated and non-insulated cups for promotions and retail applications. The company has operations in Amsterdam, New York; and Auburn, Alabama. CV Holdings, LLC was founded in 2002 and is based in Amsterdam, New York.”

CV Holdings, LLC owns several other companies including Capitol Cups also located in Auburn. Capitol Cups’ website states that the company “is a leading supplier of insulated and non-insulated travel cups, tumblers, and children’s spill-proof cups for the food, retail, sports and fundraising industries.”

Chances are high if you drink from a cup with an Auburn or Alabama sports logo, you are holding a cup manufactured by Capitol Cups.

The president and CEO of CV Holdings which oversees Si02 and Capitol Cups, is Robert Abrams of Amsterdam, NY.

It was Abrams who made the donation of $33,333.00 to Riley. It was also Abrams who signed the economic agreement shortly before Riley left office in 2010. And it was also Abrams that signed the loan agreement for the $78 million from RSA.

The donation of almost exactly one-third of $100,000 to Riley’s PAC, appears as a huge red flag.

When the Alabama Political Reporter called Si02 in Auburn the receptionist took our name and number and promised a returned call. Within 15 minutes of our call to Si02 headquarters in Auburn we received a call back from the President and CEO of CV Holding Mr. Robert Abrams.

When we spoke with Abrams in early September, he did not offer an explanation for the unusual amount of the contribution, only saying that he supported those who worked to promote business development in the State. When asked about the remaining two-thirds of the possible $100,000 he simply stated that he gave to groups that worked in business development in Alabama.

On October 10, 2010, then, Gov. Riley, signed a project agreement with CV Holdings worth $750,000 in taxpayer dollars, once the company met certain conditions.

The two major conditions of the agreement between Riley and Abrams were that the company would secure $90,000,000 in funding to be invested in the building of a new manufacturing facility in Auburn and that the company would employee at least 250 individuals to work at the facility.

In March, 2012, RSA Chief Executive Officer Dr. David Bronner, along with Speaker of the House Mike Hubbard and other State dignitaries, announced the investment of $90 million dollars into SIO2 Medical production facility in Auburn, with $78,000,000 in loans from funds belonging to State workers.

According to Dr. Bronner, the $78 million dollar loan was secured by “37 patents and other intellectual property covering the company’s developments, a pledge of stock, and all other assets of the company. The interest rate is 8% and the company will pay the RSA a success fee upon maturity of the loan. The success fee will be 22% of the average daily outstanding balance of the loan for each year the loan is outstanding.”

Bronner also stated the the agreement between RSA and CV Holdings, LLC was two years in the making.

Individuals with knowledge of the protracted negotiations between RSA and CV Holdings, LLC,  contend that Bronner initially expressed a reluctance to such a high-stakes investment.

In the Alabama Political Reporter’s conversation with Abrams, he expressed a close working relationship with Auburn Mayor Bill Ham. When asked about his relationship with Hubbard, he did not reply directly, only saying he worked with all those in business development in Auburn.

Since the 2010 takeover by the Republican Supermajority, Bronner has been under constant attack by GOP members in the House and Senate.

These attacks ended when in January 2012 Leura Canary was hired as general consul for the RSA. Leura Canary is the former United States Attorney for the Middle District of Alabama. She is also the wife of Billy Canary, the head of the Business Council of Alabama, (BCA) and a close associate of former Gov. Riley and Speaker Hubbard.

Publisher and journalist Bob Martin writing about Leura Canary’s hiring said, 

“Two capitol observers told me they believe Canary is being hired because of other reasons; one of them being that Bronner needs to improve RSA’s relations with the Republican-controlled legislature.

Canary’s hiring not only coincides with an improved relationship between Bronner and the Republican leadership, it also aligns with the closing of a $78 million loan made to finance Si02 in Auburn.

The $33,333.00 donation from Abrams to Riley occurred in November 2012, eight months after the closing of the loan from RSA.

The hiring of Leura Canary, the improved relationship with Republican leadership, the closing of the loan from RSA and the donation to Riley’s 2014 PAC falls neatly into a pattern, that has become a signature of Speaker Hubbard and his close associates.

When political experts have been made aware of the $33,333.00 contribution the overwhelming response is “Where is the other $66,666.00?”

An exhaustive search of public records has yet to yield another a similar donation from Abrams or any entity under his influence.

But a preponderance of the evidence, perhaps, has been enough for those investigating Hubbard and his allies to use the might of the law to compile answers.

 

Governor Bentley Praises Senate For Approval of Pension Reform

April 11, 2012

By Brandon Moseley
Alabama Political Reporter

The Alabama Senate approved pension reform measures (SB 388) that supporters say will make the state retirement system viable and save taxpayers over $5 billion over the next 30 years.

Gov. Bentley in a written statement said, “The measures approved by the Senate today protect the retirements of hard-working Alabamians while ensuring a strong retirement system for future employees.”  “These changes will only affect new hires who begin their employment next year.  The changes are fair, they uphold our commitments to current employees, and they provide a solid retirement for future employees as well.”
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