Posted on July 11, 2012 by Carl Herman

I invite you to pick up the phone right now and call California Assemblymember Anthony Portantino and his Chief of Staff Trent Hager at the phone numbers following to request explanation that after five weeks consideration of the following data showing taxpayer surpluses of $600 billion, Anthony chose the public statement: “No comment.”

Trent told me today via phone that Anthony declines to comment on this issue, Trent would not affirm or refute the existence of the $600 billion, nor would he explain the justification for Anthony choosing not to comment. This follows his willingness to comment, and then addressing a different issue.

If you are not in Anthony’s district, I am authorizing you to call as my representative as a constituent, ifyou will do the public service of communicating the results to me so I can share Anthony’s responses in local papers to his constituents. Our two local papers’ editors have met with me, published three letters on this topic, and will be interested in publishing Anthony’s justification for not commenting on taxpayer surpluses 35 times more than the $16 billion budget deficit used to justify austerity. I’m atCarl_Herman@post.harvard.edu

Anthony’s personal phone number listed on his website is 818-952-3432. I just called; Anthony declined to discuss the issue with me at the moment (even when I promised to take no more than two minutes of his time), declined to call back at a more convenient time today, and told me he would have to talk with Trent. This is an interesting response: if he chooses not to comment, why not just tell me why? If he already told Trent he wasn’t commenting, why does he need to consult with him again?

Trent is at the Sacramento office and was Anthony’s chosen contact on this issue: 916-319-2044.

If you’ve wanted to say something about government-imposed austerity when their own Comprehensive Annual Financial Report (CAFR) documents an abundance of surplus taxpayer assets, please take this opportunity to exercise your voice. I also invite you to share your results in a comment.

If you’re hesitant to call, please consider the importance of vital public services attacked by state-imposed austerity with the fraud of refusing public knowledge of abundant retained taxpayer assets. Anthony and Trent:  I’ll request people to stop calling when I have an ethical public statement.

CAFR data (22-minute video interview to explain it here):

Let’s summarize what we’ve documented so far about the data of California’s 2011 Comprehensive Annual Financial Report (CAFR) and what it means for the state’s 12 million households:

• Officials and corporate media never remind taxpayers, but California holds $600 billion in taxpayer cash and investments ($50,000 non-disclosed assets per household).
• California’s ~14,000 various government entities’ CAFRs have a sampled-data total estimate of $8 trillion in surplus taxpayer assets ($650,000 non-disclosed assets per household). For examples, page 63 of L.A. County’s 2011 CAFR shows $66 billion in cash and investments; page 58 of the City of L.A. CAFR shows $38 billion.
• The state’s $600 billion cash and investment fund is explained as designated for funding state pensions. The CAFR data show the opposite: $27 billion in pension cost receives only $1 billion income from $600 billion in withheld taxpayer assets.
• Californians are taxed $19 billion to pay for pensions (95% of the public cost) while also losing $50,000 in assets the state withholds in cash and investments.
• The $600 billion fund in cash and investments contributed 4% of the state’s $27 billion pension costs, but since 2008 has been “managed” to cost taxpayers more than the net income it produces, in 2011 provided over twice the net income to its investment “managers” than to California’s pensions, and the massive $68 billion increase in “fair value” of stock ownership did not translate to significant pension funding.
• Governor Brown is silent about the $600 billion in surplus cash and investments, claiming the $16 billion budget deficit can only be addressed by austerity – massive funding cuts to our essential infrastructure ($16 billion is a 2.8% divestment of the fund).

So the natural question is if the state’s withholding of $600 billion in our cash and investments does not fund pensions, address a budget deficit, or prevent devastation to infrastructure, how can we best restructure the purpose and use of OUR MONEY for optimal public benefits?

I see three obvious solutions.

As I first wrote, here are the lies you can expect when you address CAFR data, and how to counter them:

1. The funds are “designated” and can’t be used. This is a lie because the legislators have the authority and responsibility to audit and submit this fund data for professional and independent cost-benefit analyses. Those who designate have the power to undesignate, or at least explain to taxpayers how these funds could be comprehensively restructured. To say their hands are tied is pathetic.
2. The funds pay for retirement benefits. This is a lie because $600 billion is not needed to pay an account far more efficiently funded by current member contributions and direct taxation (assuming Californians would want their tax money involved). It is a lie because in a healthy economy current member contributions are roughly equal to retirement payouts. It is a lie because responsible leadership would announce the $600 billion and $8 trillion, then honestly submit the data to independent analyses and public consideration. It is a lie because the funds pay for just 4% of pension costs!
3. The funds are needed for “rainy days.” This is a lie because a state-owned bank could provide at-cost credit for budget shortfalls. Indeed, a state-owned bank providing public credit rather than private for-profit credit could have 2% mortgages that would cover all of California’s tax revenue. The only state with a state-owned bank is North Dakata; also the only state with continuing and increasing budget surpluses.

“Silence can only be equated with fraud when there is a legal and moral duty to speak or when an inquiry left unanswered would be intentionally misleading. We cannot condone this shocking conduct… If that is the case we hope our message is clear. This sort of deception will not be tolerated and if this is routine it should be corrected immediately.”  – U.S. v. Prudden, 424 F.2d. 1021; U.S. v. Tweel, 550 F. 2d. 297, 299, 300 (1977)