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politics and politicians Title: Rick Perry Sought State Profits From Teacher Life Insurance Scheme WASHINGTON -- Two weeks before Thanksgiving in 2003, top officials from Texas Governor Rick Perry's office pitched an unusual offer to the state's retired teachers: Let's get into the death business. Perry's budget director, Mike Morrissey, laid out a pitch that was both ambitious and risky, according to notes summarizing the meeting provided to The Huffington Post. According to the notes, which were authenticated by a meeting participant, the Perry administration wanted to help Wall Street investors gamble on how long retired Texas teachers would live. Perry was promising the state big money in exchange for helping Swiss banking giant UBS set up a business of teacher death speculation. All they had to do was convince retirees to let UBS buy life insurance policies on them. When the retirees died, those policies would pay out benefits to Wall Street speculators, and the state, supposedly, would get paid for arranging the bets. The families of the deceased former teachers would get nothing. The meeting notes offer the most direct evidence that the Perry administration was not only intimately involved with the insurance scheme, but a leading driver of the plan. It was a back-room deal at odds with Perry's public persona as a career politician who had successfully sold Texans on his vision of minimal government intrusion. And it still is. Nearly eight years after the meeting, when Perry formally announced his run for the presidency in Charleston, S.C., he honed that vision into the perfect applause line: "I'll promise you this," he had said in his West Texas drawl. "I'll work every day to try to make Washington, D.C. as inconsequential in your life as I can." Death in Texas, on the other hand, is another matter. That first meeting with teacher groups and retirement plan officials in November 2003, recalled one attendee, was an effort by Perry's office to solicit support for the life insurance idea from teacher associations. There was little question who was promoting the plan. "His office was pushing it," the source said. "It was like, 'We've got to do whatever we can. ... Here's an innovative idea. We really want you on board.'" The governor's office was even prepared to put down a little cash up front. If retirees balked at the notion of the state profiting from their deaths, Perry's budget men suggested they could be persuaded for the cost of a pair of shoes, according to the meeting notes. If a retiree signed a contract allowing the state's teacher pension fund to buy life insurance on them, the governor was prepared to give them between $50 and $100. "Precious little for what they were giving up," said the meeting attendee. The notes make clear that the governor's proposal deliberately targeted the elderly. The state was only seeking to take out life insurance on people between the ages of 75 and 90. At a separate meeting five days later, the plan's proponents discussed the "mental capacity" of these retirees to grant consent as one of three major technical obstacles to the plan, according to notes from that meeting. At the first meeting, Morrissey said it could take 10 to 12 years for Texas to "earn" money from the scheme, but insisted the deal could be worth up to $700 million for the state if the retirement fund could sign up 40,000 retired teachers. The meeting notes show Insurance Commissioner Jose Montemayor, a Perry appointee, joined Morrissey in the sales pitch, claiming that "this arrangement" was already being utilized by "some very rich people" who had set up similar plans to benefit the University of Texas and Texas A&M. "It was a pretty hard sell: 'This is something you need to get on board with,'" the source said, paraphrasing officials' comments at the meeting. The source says the claim involving a similar program benefiting the Texas universities turned out to be untrue -- the "rich people" had taken out the policies themselves with the intent of sharing any life insurance payments with the universities. Montemayor, as insurance commissioner, would have had to waive "insurable interest" regulations to allow the schools to buy life insurance on their professors. There is no public record that he did so. The University of Texas and Texas A&M did not return requests for comment. The aggressive push from the Perry administration differs remarkably from its later public characterization of its involvement in the deal. When the proposal leaked to the press that winter, the governor's spokespeople attempted to tamp down any notion that Perry was the engine behind the plan -- and said if there ever was a plan, it was nowhere near final. That December, spokesman Gene Acuna told the Dallas Morning News that the plan was merely "a concept." "Questions are being answered, questions are being raised," he said. "Depending on the answers to those questions, plus input from all affected parties ... that will determine the next step." In a January story in the Fort Worth Star-Telegram, another Perry spokesman attempted to create more distance between the governor and the plan. "We never endorsed any concept," said Robert Black. "The governor's opinion is that it's prudent to look at ideas and concepts ... particularly when it won't result in a loss of benefits or raising taxes to shore up the retirement system." Messages left for Perry spokespeople requesting comment for this story were not returned. But the behind-the scenes meeting notes reveal Perry's office had not only endorsed the concept, but had already formulated a plan to implement it. That first meeting on Nov. 12 was run by Perry's staff. The man who would become the fall guy for the controversy -- former senator-turned-financier Phil Gramm -- was not even present. THE GRAMM BARGAIN Gramm had made six-figure campaign contributions to Perry's campaign and had been -- and may still be -- one of Perry's most trusted political allies and personal mentors. "Perry worships at [Gramm's] feet, intellectually," said one semi-retired political consultant in Austin. "He considers Gramm an economic genius." After lending political aid to Perry, Gramm was poised to make a fortune from the life insurance deal. His role in the scheme had the appearance of banal corruption and cronyism. Although Gramm wasn't in on the first meeting with teacher groups, he played an active role in subsequent efforts to push the scheme. It was Gramm who could make the plan a financial reality. He left the U.S. Senate in November 2002 for a lucrative vice president post at UBS. After Morrissey, Montemayor and Perry budget aide Brian Guthrie first articulated the plan on Nov. 12, Gramm came to Austin to help push the deal. That move eventually prompted Texas Democrats to file an ethics complaint against Gramm for making a the pitch without registering as a lobbyist. Gramm was hoping to put together a new package of complex assets for speculators to gamble on. Corporations had been using mass purchases of life insurance policies on their employees for years as part of an elaborate tax avoidance scheme (the government doesn't tax insurance premiums or death benefits). The employees themselves -- affectionately referred to as "dead peasants" among insurance experts -- received no benefit. Only the companies who bought the policies would receive payouts when these "peasants" died. Gramm wanted to convince investors to bet on peoples' lives by purchasing pools of life insurance and annuities taken out on individuals. Gramm and UBS had concocted a gruesome combination of what are now regarded as two of the most infamous Wall Street scams on record. The resulting package closely resembled the growing market for mortgage-backed securities, but instead of allowing Wall Street to bet on peoples' homes, it would enable bets on peoples' lives. Poster Comment: This just proves that when Republicans talk about "death squads" we should listen to them, since the have first hand experience with their benefits.
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#1. To: Skip Intro (#0)
Such insurance is called 'Dead Peasant' Insurance Policies. For real.....
With the economy still in the dumper -- maybe permanently? -- and full-time jobs becoming as scarce as rain during a drought, huge percentages of Americans have had their (misplaced) faith in the American dream shaken, the upper-middle-class consumerist lifestyle is exposed as a mirage for anybody who plays by the rules. Capitalism and the America that embraced it as a way of life is now and forever more a failure. It does me good to know that the generation that voted in Reagan and his ideology will see their America die from that ideology before their very own eyes and knowing they had a hand in its destruction.
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