Twinkie CEO Admits Company Took Employees Pensions and Put It Toward Executive Pay

[unhappycamper]

http://www.alternet.org/corporate-accountability-and-workplace/twinkie-ceo-admits-company-took-employees-pensions-and-put-it?paging=off

Twinkie CEO Admits Company Took Employees Pensions and Put It Toward Executive Pay
AlterNet / By Thom Hartmann
December 11, 2012 |

Twinkie-maker Hostess continues to screw over its workers. The company is in the process of complete liquidation and 18,000 unionized workers are set to lose their jobs. More troubling – they could lose their pensions.

According to a report by the Wall Street Journal, Hostess’ CEO, Gregory Rayburn, essentially admitted that his company stole employee pension money and put it toward CEO and senior executive pay (aka “operations”). While this isn't technically illegal, it's another sleazy theft by Hostess executives - who've paid themselves handsomely while running their company into the ground. Just last month, a judge agreed to let Hostess executives suck another $1.8 million out of the bankrupt company to pay bonuses to CEOs.

If there's no way to recover the money for the Hostess pension plans for workers, then we the taxpayers - through the Pension Benefit Guaranty Corp. - will have to foot the bill to make sure workers get the retirement money they paid in.

Hostess shows us clearly what Bain-style predatory capitalism is all about: big bucks for the very few rich executives, layoffs and poverty for the workers and their communities.

[catbyte]

1. Why doesn't this surprise me in the least?

[SummerSnow]

22. Not surprised either ..

And the teapublicans cheer this behavior

[SomeGuyInEagan]

40. Thom is wrong on one point - PBGC in not taxpayer-funded.

But they are now running a deficit and want to have the power to raise premiums. The Obama administration supports this power, but - wait for it - some in Congress are fighting it. Can to guess who is fighting it?

Read:

http://articles.washingtonpost.com/2012-11-16/business/35505545_1_pbgc-premiums-pension-plans-troubled-pension-funds

That is not to say that the PBGC cannot go to Congress and ask for a bailout if needed, but that hasn't happened.

On a related issue - why in the hell the employees' contributions to their OWN pension plans pass through the employers' hands first is one of the first things that needs to be addressed. That money should go straight to a third party, where the corporate execs cannot even smell it, let alone steal it.

So, so, so Godamnned many things wrong with the laws in this country.

[RegieRocker]

2. Off with their heads!

[liberal N proud]

3. Do what they do in Japan you miserable fuck

[discharge]

4. Patience.

Wait'll Holder gets hold of this guy and prosecutes the shit outta him just like he did all the Wall Streeters.

[deutsey]

6. They better do something real and substantial

and not just for these particular corporate Ding Dongs.

[progressoid]

25. Bwahahahahaha.

That's a good one...

[CrispyQ]

27. Only if he's got a joint in his hand.

[Javaman]

28. I have a little of what you are smoking. nt

[iemitsu]

5. This is a problem that has to be addressed by congress so that

criminal CEOs, with the court system behind them, can no longer do this legally.
It is difficult to believe that this has not already been addressed (not in the sense that "it couldn't happen here" but in the "how could our government be so corrupt" sense).
We need to call attention to this travesty of justice when calling our congresspeople to insure that the rich don't steal our Social Security.
The new America where the rich cannibalize the elderly.

[R. Daneel Olivaw]

17. LOL! That's not going to happen.

I hate being so jaded about the issue, but Congress isn't going to lift a finger to help unions. If the Senate did vote to help it will go nowhere in the HoR.

I'm beginning to wonder how long until America is faced with its own October revolution.


On edit: I'm not looking forward to that.

[iemitsu]

34. Well, Daneel I know its not going to happen

but it is what ought to happen.
How can anyone in this country still believe the government is on our side.
All we are to them is a meal ticket.

[brewens]

7. I can't believe the right-wing doesn't go after that Pension Benefit Guaranty Corp.

Wouldn't that be a natural? Get people that never had a job with a pension fired up about their tax dollars going to pay other peoples pensions?

I can see why their leaders leave that alone. It's easier for them to loot those pension funds if it won't mean cutting people off completely. Not that the crooks would care either way.

[raccoon]

11. Excellent point. nt

[brewens]

14. I've actually tried to stir that up a little with the Freepers. Trolling and slamming

the PBGC but no one took the cheese. There have to be lots of right-wingers retired and collecting what they can from the PBGC. Maybe even RimJob and some of his buddies.

[Remmah2]

8. What a bunch of ahole bastards.

[mtasselin]

9. Jail

Why are there not laws stopping this shit from happening, after all these years they still get away with it. If it is against the law throw their no good asses in prison, but can't wait for AG of the USA to do anything because he is incompetent

[Octafish]

10. When a homeless kid steals a Twinkie for breakfast and is caught, he or she goes to jail.

...and is branded a crook for life.

When a Twinkie executive steals his or her employees' retirement money, he goes on the cover of Forbes as a hero.

How, um, odd*.

----

* Fascistic, really.

[SummerSnow]

21. You are so right ..

It's Les Miserables redone.Were all Jean Valjeans.

[barbtries]

12. it is so clearly wrong

yet it goes on and on unanswered and isn't even a crime?

[Baitball Blogger]

13. Sounds like a corporate forced welfare scam.

[CanonRay]

15. I find it incredible that this is legal

although I'm sure an army of company lawyers says it is.

[Festivito]

16. So, we taxpayers end up paying for pay raises the give themselves. Frustrating. /nt

[Horse with no Name]

18. Didn't some Judge just approve their new bonuses?

Approve them and take every cent to return to the pension fund.

[LiberalEsto]

19. This is criminal. There people need to be in prison.

I don't understand how, after the Enron debacle, corporate executives still feel free to steal the pensions of tens of thousands of working people. These workers contributed portions of their salaries into these pensions. What the companies paid into the pension funds were also monies earned by the workers as deferred compensation. This money belonged to the workers.

Stealing this money is outright theft.

[drynberg]

39. I Agree, grand theft

What we need is an AG with more guts and even a spine that Eric the Holder. There HAS to be a way to prosecute this clear case of grand theft and embezzlement. Time for President Obama to get an AG that can do the job.

[cstanleytech]

20. This doesnt make any sense to me.

Definition of EMBEZZLE
: to appropriate (as property entrusted to one's care) fraudulently to one's own use <embezzled thousands of dollars>
— em·bez·zle·ment noun
— em·bez·zler noun

Sounds like that is what they did so why havent charges been filed?

[EC]

23. Maybe this type of vulture cap

could be one of Liz Warren's first projects.

[Canuckistanian]

24. How is this "not technically illegal", anyways?

Corporations don't buy a paperclip unless it's spelled out in an official written policy, approved by lawyers.

Was this agreement conducted on the basis of a handshake? Why aren't there class action lawsuits being started right now?

This is bad faith bargaining at it's worst, the kind of thing that the LAW COURTS are MADE to enforce.

[Thinkingabout]

26. The greed does not stop, the same CEO says the unions and employee demands has bankrupt the co.

The CEO continue to steal and plunder and blame the lowly workers for all the problems, they must be idiots to think anyone believes their lies. Then we will probably have to cover the pensions funds, corporate welfare at its best. It is time to start putting these wonderful executives in prison in order to slow this fraud.

[pipewrench]

29. Great post unhappycamper

#!

[triplepoint]

30. What Are You REALLY Prepared to Do About It?

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[Blue Owl]

31. The Hostess with the Mostest

Talk about a spongy triple-injected cream-filled executive bonus, geez...

[okaawhatever]

32. It's not illegal because paying the workers and management is considered operating expenses. There

is a hierarchy of debt in BK's. The law makes sense, it's to protect the workers from not getting paid. Problem is.....the same law protected the d-bag management.

Here's a link to a story on it in Fortune magazine last August. It also gives you pretty good info on how the vulture capitalists are operating.

http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/

[CoffeeCat]

33. How is this different from Bernie Madoff???

Madoff promised people that he would invest their money and that--at the very least--the initial invested money would be returned to them.

Madoff did other things with the money and many lost millions.

Same thing with Hostess. They told employees, that as part of their compensation, that the company would set aside and invest a specific amount of money for them.

That never happened.

How is this not a crime? How is this not breach of contract?

[DeSwiss]

35. Phuck these assholes and especially the phucking judge!. K&R n/t

[bl968]

36. Civil suit

The workers should audit the books tracking where every dime of the pension money went to then file a class action civil suit against the executives who received the fruits. I bet it would succeed...

[quakerboy]

37. How can it be legal

For these corporations to take money contractually obligated for one purpose and choose to use it for other things on a whim?

And why is it that we insist that USPS prefund its pensions, but apparently no company in the country is required to fund them, much less prefund them?

[SomeGuyInEagan]

41. Because the laws are written to benefit the upper 1%. America ... Reagan + 30 years.

You ask good questions, but you ask the questions which a decent/honest/honorable person would ask.

That is taking a knife to a tank fight.

We just keep sharpening knives.

[tclambert]

38. I swear this is exactly what Denny McLain went to prison for in the Peet Packing scandal.

Stealing pensions used to be a crime. Did somebody change that law?

[commenter8]

42. White House petition to end corporate welfare

White House petition to end corporate welfare here: http://wh.gov/Qa6f

[mbperrin]

43. Did it!

#10