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Report: Ex-labor chief's 1-day rehire nets $158,000 city pension

A retired Chicago labor leader has secured a $158,000 public pension after spending just one day on the city payroll, local news reports said.
/ Source: news services

A retired Chicago labor leader secured a $158,000 public pension — roughly five times greater than what a typical retired public-service worker in the Windy City receives — after being rehired for just one day of active duty on the city payroll, local news reports said.

According to The Chicago Tribune, Dennis Gannon stands to collect approximately $5 million in city pension funds during his lifetime. He now draws the pension while working for a hedge fund, the Tribune reported.

The Republican leader of the state House, Tom Cross, said he will introduce a bill to repeal the 1991 law that allows the windfall. Senate President Dennis Cullerton, a Democrat, agreed the law seems flawed.

Gannon, former president of the Chicago Federation of Labor, was able to take a long leave from a city job to work for a union and then receive a city pension based on a high union salary. That arrangement is allowed under a state law signed by Gov. Jim Thompson on his last day in office in 1991, according to an investigation by the Tribune and WGN-TV.

The change has enabled a couple dozen labor leaders to become potential millionaires.

What is different in Gannon’s case is that he became eligible for the especially lucrative pension deal only because the city rehired the former Streets and Sanitation Department worker for one day in 1994, before granting him an indefinite leave of absence, according to the investigation. He retired from the city job in 2004 at age 50.

'Eligible under the law'
Gannon’s pension is so high that it exceeds federal limits and required Chicago’s pension fund to file special paperwork with the Internal Revenue Service to give it to him, the Tribune reported.

"I am extremely proud of my many years of service to the city of Chicago and the working men and women of organized labor," Gannon wrote in a statement provided to the Tribune. "I have always followed the pension laws governed by the state of Illinois statute as well as the city of Chicago municipal pension plan."

Terrance Stefanski, who oversees Chicago’s municipal pension fund, confirmed to the newspaper that pension laws were followed in Gannon’s case.

"Once the city rehired him and he went on a leave of absence to work for the union, he was eligible under the law," Stefanski told the Tribune.

Read the full investigation at the Chicago Tribune website