“Dan needs no introduction,” said Richmond Mayor Tom Butt at an April city council meeting, as Daniel Borenstein, an influential columnist and editorial page writer for the Bay Area News Group, walked up to the microphone to talk to city leaders about Richmond’s retirement debts. “For people on the city council who have had to run for office, we’ve all been out there to [Borenstein’s] inquisition where he has thrown obscure terms at us, and quizzed us on what we’re going to do about it, where he’s thrown fear into the hearts of all of us,” Butt said with a smile.
Borenstein quickly launched into his Power Point presentation. He warned that Richmond’s unfunded retirement debt was $446 million, or $4,150 per resident, calling it the “biggest enchilada.” The city’s retiree medical benefits debt totaled another $125 million, he said. His essential argument — one that he has repeated dozens of times in columns and editorials — was that, over the years, Richmond, like many cities, contributed too little to its retirement fund, building up an unfunded liability that could lead to financial catastrophe. “It’s like charging last night’s steak dinner on your home mortgage,” he told the councilmembers, using one of his favorite folksy sayings.
For much of the past decade, Borenstein has been waging a campaign against what he views as the financial irresponsibility of elected officials and public sector labor unions, zeroing in on one issue in particular: public employee pensions. In columns and editorials, he has warned that looming debts threaten to “strangle,” “choke,” and “bankrupt” communities. He’s called public employee pension systems “unsustainable,” and scolded cities such as Oakland for “living beyond [their] means.”
Borenstein, a sixty-year-old Oakland resident, has called for slashing public employee benefits while excoriating elected officials who have prioritized spending on services rather than using limited tax dollars to rapidly pay down long-term retirement liabilities. In political endorsement editorials and other writings, he’s consistently backed fiscal conservatives and slammed those who he feels are ignorant or unwilling to acknowledge that unfunded pension liabilities are the most important problem facing local and state governments.
Throughout California, Borenstein’s hardline view on pensions has been championed by conservative groups and well-funded think tanks, which, in turn, have financed reports that warn of the financial calamities presented by public sector retirement plans. In a sort of negative feedback loop, Borenstein has then repeatedly pointed to these reports as proof that his views are correct.
Yet despite his laser-like focus on pensions, and his constant advocacy for cutting employee benefits and services, Borenstein contended during a series of interviews for this story that he, in fact, actually supports unions, pensions, and strong government. “I believe very strongly in the ability of government to provide these services, but also to survive in the long run,” he said. “I’m concerned about debts strangling local governments in the future.
“Defined benefit pensions are a really good idea, and if I could be God, wave a magic wand, everybody in this country would have one,” he added. “But the benefit levels have to be affordable, and the accounting and forecasting methods have to be realistic. I don’t think they are.”
However, many economists and critics of Borenstein say that the obsession with cutting public pensions is an unsound fiscal policy that can damage the economy, particularly during tough times. Moreover, austerity measures like pension-cutting have been shown to not only widen the gap between the wealthy and the middle class, but also have helped villainize public employees, while ignoring the broader political and economic factors that have caused local governments to run up retirement system debts in the first place.
In fact, these days Borenstein can hardly print his views or speak publicly without workers and progressives pushing back. And as the Great Recession recedes and local government revenues climb back to normal levels, the unfunded liabilities that Borenstein has identified over the years as dark icebergs threatening to sink local agencies have instead been melting and becoming much more manageable.
Even so, he soldiers on, most recently praising a campaign by Chuck Reed, the pension hawk former mayor of San Jose, to strip public employee pensions through ballot initiatives.
And political candidates throughout the East Bay know full well that they will never receive the endorsement of the region’s major dailies — Oakland Tribune and the Contra Costa Times — unless they toe Borenstein’s line on pensions during endorsement interviews that Mayor Butt half-jokingly referred to as “inquisitions.”
Borenstein began writing consistently about pension liabilities in 2008, at around the same time that the global economy descended into the most severe recession since the Great Depression of the 1930s. The simultaneity of his obsession with pensions and the Great Recession wasn’t a coincidence. As the stock market slid downward in 2008, the value of assets invested by state and local retirement systems declined by as much as a quarter. This caused the unfunded liabilities of most pension systems to shoot upward, seeming at the time like insurmountable mountains of debt that would wreak havoc on the public purse. And budget deficits, born of plummeting property and sales taxes and other revenue streams, created an atmosphere of crisis and scarcity.
The sudden growth in unfunded liabilities spawned a cottage industry in journalism that focused on pension finance, with Borenstein leading the charge in California. In his view, massive unfunded liabilities were caused by decades of financial irresponsibility, the fault mainly of corrupt elected officials who pandered to greedy labor unions. Cuts needed to be imposed immediately to free up money to pay down these debts, otherwise disaster loomed, said Borenstein and other pension-obsessed journalists.
The favored solution of this new brand of journalism was that workers needed to be forced to pay more into their pensions, or accept lower benefits levels. Journalists justified this bitter fiscal medicine by referring to public sector employees as overpaid, or having “lucrative pensions,” and “Rolls[-Royce]” benefit plans — as Borenstein has characterized them in his columns and editorials.
Borenstein has identified several pension systems with genuine problems, including ones in which some employees took advantage of rules. Pension-spiking, for example, became one of his favorite topics, and Borenstein exposed practices in Contra Costa County in which fire and sanitary district employees inflated their retirement packages by cashing in sick days and vacation payoffs to bring their pension checks above $200,000 a year.
However, in identifying a real, but not very serious problem in the grand scheme of public finance, Borenstein helped paint a portrait of public employees as fat cats.
“He hammers on this one issue about pension funding relentlessly,” said Zac Unger, an Oakland firefighter and vice president of the International Association of Firefighters Local 55. “And when he gives talks, he presents what he’s doing as journalism, when, in fact it’s opinion, and it’s only his opinion.
“Unfortunately, there’s no [Paul] Krugman to [counter] his conservative voice in the Bay Area,” continued Unger, referring to the Nobel Prize-winning economist from Princeton.
Using his column in The New York Times, Krugman has acknowledged on multiple occasions the issue of underfunded public pensions, but he always adds that the funding ratios for most systems aren’t seriously out of whack, that most of the current underfunding is due to the Great Recession, and that cutting public spending, or forcing middle-class employees to take benefits cuts, is an austere recipe for economic disaster.
And Krugman is not alone in this analysis. “Most of the pension shortfall … is attributable to the plunge in the stock market in the years 2007–2009,” wrote economist Dean Baker in a 2011 study, “The Origins and Severity of the Public Pension Crisis.” Baker is the co-director of the liberal Center for Economic and Policy Research. “While there are certainly cases of pensions that had been under-funded even before the market plunge, prior years of under-funding is not the main reason that pensions face difficulties now.”
And according to Baker, the underfunding problem isn’t very big. “The size of the projected state and local government shortfalls measured as a share of future gross state products appear manageable,” he wrote. “The total shortfall for the pension funds is less than 0.2 percent of projected gross state product over the next 30 years for most states.”
Moreover, according to CalPERS — the state’s public sector retirement system — the typical public employee pension is far from lavish. The average CalPERS pension benefit for a public employee is just $33,408 annually. Most other pensions systems offer similarly modest benefits levels to the average retiree.
Borenstein disputes aspects of CalPERS’ calculations, and he criticizes public employee pensions for being more valuable than what’s offered in the private sector. He argues that public workers should therefore endure cuts to conform with “normal” levels of compensation. This claim, however, ignores the fact that workers in the public sector are actually paid less than their private sector counterparts with comparable levels of skills, experience, and education, and that local governments have carefully crafted pension plans that serve to recruit, retain, and reward public employees with retirement security in lieu of higher salaries.
According to a 2010 report from the National Institute of Retirement Security, California’s local government employees earn 6.1 percent less in wages than their private sector counterparts. And while the average pension and medical benefits for public employees is superior to workers in the private sector, adding these benefits to total compensation still leaves public workers with less pay than private sector employees with the same education and skills. “[O]ur estimate suggests they still receive less total compensation than similar private sector workers,” the report concludes.
Furthermore, there’s a danger in cutting public sector benefits to conform to the private sector. Research shows that driving down public employee benefits damages government efficiency over the long term. As Alicia Munnell, Jean-Pierre Aubry, and Geoffrey T. Sanzenbacher, economists affiliated with the Center for Retirement Research at Boston College, found in a study published earlier this year, relatively generous pensions reduce the “quality gap” between public and private sector labor markets, allowing state and local employers to recruit high-earning workers from the private sector — and keep them. They warn that cutting benefits could lead to a loss of skilled employees.
The cottage industry of anti-pension journalism that has flourished since 2008 didn’t have to invent the fat cat public employee trope, or the idea that pension systems are suffocating the rest of the economy. Conservative think tanks were pushing this narrative since before the financial crisis, but they found the sudden budget shortfalls caused by the Great Recession an opportune political moment to expand their appeal.
Perhaps the most well known proponent of the thesis that pensions are massively under-funded and need to be reformed, primarily by cutting benefits to workers and forcing individuals to take on more risk in planning for retirement, has been the Laura and John Arnold Foundation, a think tank and grant-maker founded by John Arnold, a former Enron-trader-turned-billionaire hedge fund manager from Texas. According to an investigation by journalist David Sirota of the International Business Times, Arnold and other conservative activists used the financial crisis to “[manufacture] the perception of a public pension crisis in order to both slash modest retiree benefits and preserve expensive corporate subsidies and tax breaks.”
Through his personal foundation, Arnold backed campaigns in various locales to replace defined benefit pensions with riskier 401(k)-style plans. In 2014, Arnold bankrolled a California ballot initiative backed by San Jose’s then-mayor Reed that would have eliminated constitutional protections for public employees and allowed local governments to slash public workers’ benefits without having to bargain with unions over those cuts.
Last year, Borenstein called the Arnold-backed ballot initiative “essential to controlling ballooning costs,” and hailed it as a “much-needed reform” to prevent public employee benefits from “strangling” local governments.
Joe Nation, a former California Assemblymember who became a Stanford University professor, is one of Borenstein’s favorite pension reformers. During the financial crisis, Nation and his graduate students produced studies claiming that California’s state and local pensions systems were massively underfunded. One of Nation’s reports, issued in December 2011, claimed that California’s three largest pension systems — CalPERS, CalSTRS (for public school teachers), and the UC Retirement System — had a combined debt of $479.9 billion. Nation’s report, which used unusually conservative assumed rates of return on investments made by the pension systems to estimate the $479.9 billion figure, recommended benefit reductions for public employees as the best solution.
In Borenstein’s opinion, Nation is a courageous “liberal” voice of reason occupying the center of the pension debate, unafraid to ruffle the feathers of public sector unions. Borenstein has frequently relied on Nation’s research in his columns, and he wrote positively about the 2011 report, as well as a 2012 follow-up report in which Nation claimed that every California household was buried under $30,500 in debt because of the state’s unfunded pension liabilities. The report, and especially that sticker-shock number, conjured up images of privileged public sector workers riding the backs of California taxpayers who were already burdened by high unemployment and stagnating wages during the recession.
But Nation’s network of supporters is anything but moderate. He has been funded by business interests whose goal is to maintain a tax system that benefits the wealthy while forcing working families to shoulder more of the burden for the services the public sector provides. For example, Nation’s reports were financed by California Forward and produced in partnership with California Common Sense. California Forward styles itself as a “bipartisan” group aiming to “fortify fiscal management” of state and local government, but the group’s leadership comes predominantly from corporate lobbying groups and conservative think tanks, including the Bay Area Council, the California Business Roundtable, and the Hoover Institute at Stanford. California Common Sense, as its name implies, styles itself as a think tank offering practical solutions to vexing public policy problems, but is run mainly by wealthy fiscal conservatives, many of them Silicon Valley investors. Funding for the group comes from the billionaire Bechtel family and the billionaire heir to the Berkshire Hathaway fortune, Charles Munger, Jr., among other sources. In 2012, while Nation and California Common Sense were churning out reports claiming public employee pensions were hurtling the state toward fiscal ruin — reports that Borenstein spotlighted in his columns — Munger was busy funding Proposition 32, which had it passed, would have gutted labor unions’ primary means of raising campaign funds for elections.
“There’s been this huge political tide against the public sector unions,” said Unger of Local 55. “We feel like every four years there’s going to be another Proposition 32 trying to destroy us that we’re going to have to fight.”
Unger and other California labor leaders are deeply concerned about the fiscal health of public pension systems, and acknowledge that in past years, many local governments and the state didn’t sock away enough money to pay the full amounts owed to retirees, creating a long-term problem of underfunding. But Unger and other labor leaders view Borenstein’s journalism as biased and inaccurate, and contend that it exaggerates a real but manageable problem, manufacturing crises where there really are none.
Over the years, Borenstein’s writings also have become favorite go-to sources for right-wing advocates of cutting and abolishing pensions. Among them is CalWatchdog.com, a news website substantially backed by the Koch brothers and other anti-labor conservatives. The Howard Jarvis Taxpayers Association, a right-wing anti-tax group, frequently links to Borenstein’s columns on its website, as does Pension Tsunami, a website run by Jack Dean, an anti-labor activist who leads the Fullerton Association of Concerned Taxpayers.
Like many public sector employees, Unger feels that the effect of Borenstein’s writings about pensions — and the conservative echo chamber that amplifies his ideas — has stoked resentment and misunderstanding, rather than illuminating the real problems that governments and workers face in securing dignified retirement security. For example, one major area of disagreement between labor leaders and Borenstein is the question of what level of funding is appropriate for a pension system. According to Borenstein, pensions must be funded 100 percent, and anything less is inter-generational theft, with levels below 60 percent threatening the viability of the pension system and ultimately its government sponsor. Borenstein has frequently demanded reforms to bring pension funding up to 100 percent funding levels. But his proposals almost always mean forcing employees to shoulder more of the cost, or cutting government services, such as police, fire, street paving, libraries, and parks to pay more into the pension systems.
“One-hundred-percent funding is nutty,” said Unger. “It’s generally accepted that 80 percent is a good target, and the National Association of State Retirement Administrators, the US Government Accountability Office, and all the major credit ratings agencies agree.”
Eighty-percent funded levels are considered sufficient because the ultimate amount that a pension system will need to pay to retirees is actually a moving target that depends on the value of the system’s assets, which fluctuate over time, and many other assumptions, including the life expectancy of beneficiaries and how much investments owned by the pension system will earn each year. Local governments also tend to grow economically over time, allowing them to more easily make up costs in future years. Finally, pension benefits don’t just disappear down a black hole; many government retirees live in the cities and counties that pay into their pension systems, meaning that when pension checks are spent by beneficiaries, the local governments recapture portions of these funds in sales, gas, real estate, and other taxes.
Monique Morrissey, an economist with the liberal-leaning Economic Policy Institute, views the torrent of reporting on unfunded pension liabilities between 2008 and the present in the context of a wider assault on working families and unions by conservative interests that seek to offload more of the cost of government onto workers. “Nationwide, there wasn’t a serious problem regarding the funding of pensions,” said Morrissey. “We had localized problems in some states like Illinois and New Jersey, but since the 2008 downturn, there was a dip in the funding levels of all pensions due to declines in the stock market, and this created a space for criticisms to make it seem like there were underfunding problems.”
Moreover, the austerity measures advocated by Borenstein — paying down unfunded liabilities by cutting expenditures on services and laying off employees — have done enormous damage to the economy. Yale University economists Ben Polak and Peter Schott have called job losses in local government a “hidden austerity program” that slowed the recovery and left millions of people worse off. In prior recessions, local and state governments let unfunded liabilities build up because the bills didn’t need to be paid immediately. Instead, state and local governments used limited revenues to maintain public sector jobs and fund services. Doing the opposite, cutting jobs and services to the extent many local governments have recently, has only reinforced the recession’s effects.
According to Morrissey, much of the support for campaigns to paint public sector pensions as unsustainable and crises-prone has come from Wall Street interests who stand to profit if defined benefit pensions are dismantled and more workers are forced into 401(k)-style plans that are riskier and costlier, but which generate higher profits for banks and brokerages.
In a July 2010 column, Borenstein wrote that “Oakland faces a recipe for fiscal disaster” due mainly to “at least $2 billion in unfunded liabilities for employee pensions and retiree healthcare costs.” He noted that Oakland’s CalPERS plan was only 57 percent funded, and drove home the point for readers by repeatedly contending that the fund “had barely half the assets it should.”
According to Borenstein, the PFRS retirement system — Oakland’s closed pension fund for police officers and firefighters who were hired before 1976 (in 2010 there were 1,150 retirees still in the system) — was in even more dire straits. It was $435 million in debt, and had only 44 percent of the funds it would eventually need in order to pay out pensions in future years, he wrote.
Borenstein followed up this column with another that focused solely on the PFRS system, which by this time, he said, was only 38 percent funded, and lacked the $495 million needed to pay pensions owed in future years. And he excoriated the city’s leaders for planning a new bond deal to borrow $210 million to finance the city’s required contributions into the pension system until 2017. The bond deal was being designed to allow Oakland to avoid spending tens of millions of general fund dollars to make required annual contributions into the pension system over the coming years, at exactly the same time that the Great Recession was causing Oakland’s revenues to dry up.
“At some point, someone must step in and stop this financial train wreck,” wrote Borenstein. However, he didn’t offer a plan for how it would be possible for the city to make its required contribution to the plan without firing hundreds more employees.
“I ran into Dan [Borenstein] at a public event” at the time, said former Oakland Mayor Jean Quan in a recent interview. “I said to him, ‘Dan, if I did what you advised, I’d have to lay off even more people and cut into services.'”
Quan came into office with the city having virtually no reserves and facing an unprecedented budget deficit, yet Borenstein advocated that her administration redirect tens of millions in the city’s budget to pay a pension liability that, in fact, wasn’t due, and which could be delayed until the economy turned around. “The thing about being mayor is you have to do what’s right for your city,” said Quan. “Laying off even more employees, police officers, and cutting services even further, when we really didn’t have to, when we had the option of smoothing out these payments into the future, it was a no-brainer.”
“We just plain did not have any money,” added Dan Lindheim, Oakland’s city administrator from 2009 to 2011. “The city’s general fund revenues decreased by $100 million annually during the Great Recession, and in response, we had already cut services to the bone. …” Lindheim said there was no serious alternative to issuing bonds to finance the city’s contributions to the PFRS fund because making the contributions into the system out of the city’s general fund would have required mass layoffs that would have damaged the ability of Oakland to provide services and invest in future growth.
Unger, who witnessed the damage done to Oakland from the inside of the city’s dangerously under-funded fire department, agrees with Lindheim. “In Borenstein’s dreams, there’s a lot of cutting off your nose to spite your face,” he said. “But cutting essential city services further would have meant losing revenue for the city.”
According to Lindheim, the plan in City Hall was to borrow during the Great Recession in order to avoid making crippling cuts, so the city could keep providing essential services. The new debt could be paid off in distant future years when the global economy rebounded, boosting Oakland’s revenues back to normal levels. “Did pension bonds kick the can down the road? Yes,” said Lindheim, “but to a time when other city debt had been paid off and to a time when city revenues would hopefully return, including the lost $100 million.” In other words, the plan was to put the unfunded PFRS pension liability on the city’s credit card in order to avoid making severe cuts during the recession, and to pay off the debt over the long term.
“How long could the Great Recession keep going?” said Lindheim. “If it kept going, then Oakland had bigger problems than worrying about pension debt.”
At the April meeting of the Richmond City Council when Borenstein most recently presented his views on pension debts before a legislative body, he met resistance. Mike Parker, a retired autoworker and member of the Richmond Progressive Alliance, called Borenstein’s presentation one-sided. “Mr. Borenstein’s solutions seem to come down to transferring more costs to employees or retirees, or cut services,” Parker told the council. “That’s the only thing he seems to think are the alternatives that he presents. I would suggest that the real problem in this society is that the city is under-funded, largely because of a faulty tax system that shifts the wealth from the poor to the wealthy, and that puts corporate loopholes in things like Prop 13, the property tax.
“I’d be much more willing to hear Contra Costa Times‘ advice on budget when I see the editorial page champion a split roll of Prop 13, or single-payer healthcare,” Parker concluded, referring to measures that would make corporate property owners pay billions more in real estate taxes, and would reduce healthcare costs for local governments as well as individuals.
For his part, Borenstein said in interviews that he’s misunderstood, and that he also thinks the state needs major progressive reforms of its tax system. He told us he doesn’t want to eliminate defined benefit pensions or balance budgets on the backs of workers and the poor, as his critics contend. We asked him then why he hasn’t written about inequality, poverty, welfare, the tax system, and other pressing social problems that are inextricably linked to the question of local government finances, and to the unfunded pension liabilities to which he has dedicated countless inches of column space.
“Yes, that’s super important, but that’s not what I write about,” said Borenstein. “I don’t pretend to be an expert on a zillion things. It just so happens this is a big problem in the area I watch and it drives all those other issues.”
We downloaded an archive of Borenstein’s columns stretching back to 2003 to get a better sense of his focus over time. We counted the number of articles in which he mentioned various important public policy issues. At least 59 Borenstein columns in our sample mentioned pension-spiking. Only two mentioned executive pay, but they focused on the compensation of University of California employees, not corporate and Wall Street paychecks. Twenty-eight columns referred to public employee pensions as “burdens” on society. In eight columns he used the word strangle to talk about the effect of public pensions on government. By comparison, Borenstein only mentioned Proposition 13 in five columns. The subject of corporate tax breaks only appeared in two columns (one of which was actually about the need for politicians to stand up to public employee unions and demand cuts to workers’ benefits). Affordable housing got one mention in Borenstein’s body of work, but it was in a column praising Governor Jerry Brown for disbanding redevelopment agencies, the main source of funding for cities like Oakland and Richmond to build affordable housing. The terms inequality and austerity only appeared once, in separate columns. The terms food stamps, corporate subsidies, mortgage fraud, predatory lending, Head Start, and child poverty did not appear in the writings we downloaded. Borenstein wrote one article about the minimum wage in which he called Oakland’s Measure FF, which boosted pay for the city’s lowest-paid workers to $12.25 an hour, a “poorly crafted measure.”
So, did local municipalities take the financial medicine prescribed by Borenstein? Not really. The drumbeat calling for cuts to public employee pensions proffered by Borenstein and fiscally conservative politicians may have had a modicum of success over the years, but likely not nearly enough to their satisfaction. In many municipalities, public employee bargaining units eventually agreed to pay more toward their own pensions.
“I’ll admit he did a good job of marginalizing public employee unions like us,” said Jeff Del Bono, president of the Alameda’s firefighters union IAAF Local 689. But Del Bono thinks Borenstein’s power has run its course. “Some people read it and others don’t even pay attention anymore.” Last month, the Alameda firefighters union and the City of Alameda agreed to create a trust fund to pay its retiree health benefits.
In Oakland, the PFRS liability today is a non-issue. The most recent pension bonds have provided Oakland with a payment holiday until 2017, and the system’s funding level has bounced back to 71 percent and rising, according to a May 28 report to the Oakland City Council. Oakland will pay off other debts by 2017, including tens of millions of dollars in lease revenue bonds, which will thus free up a stream of funding to pay off any remaining liabilities to the PFRS system.
And while Oakland’s CalPERS contributions are expected to rise, the city isn’t without hope there either. Oakland is booming with business and development projects that will likely increase revenues by many millions over the next decade, allowing the city to better fund its retirement obligations. The same is true for the city’s medical retiree debt, also known as other post employment benefits, or OPEB. Although, as of 2014, Oakland had an unfunded OPEB liability of $463 million, it was much improved from 2010 when the liability was $591 million. Oakland has been paying down this debt, and Mayor Libby Schaaf’s 2015-17 proposed budget includes $17.4 million to reduce the OPEB liability.
“I believe you grow your way out of recessions,” said Quan in defense of her record. “You don’t cut your way out.”
By financing the PFRS contributions and delaying other long-term liabilities — against Borenstein’s insistence — Quan was also able to avoid cutting staff in the city’s planning and economic development departments, a move that helped jumpstart major real estate deals, including the Brooklyn Basin housing project and the Army Base redevelopment. It also helped the city attract businesses and maintain services that are now raking in an added $115 million in taxes above last year’s receipts.
Despite the fact that the-sky-is-falling point of view about pensions has been widely disregarded by economists and discredited by research and history, Borenstein continues to wield considerable power and influence in East Bay political circles. Earlier this year, the Oakland League of Women Voters featured him as their “expert” speaker on pensions at a forum in City Hall. And over the years, many East Bay politicians have declined to say anything negative about Borenstein publicly because they fear him.
Those who have endured Borenstein’s interrogations describe them as nerve-racking, and some public officials have called his demeanor “rude” and “patronizing.” Sometimes, Borenstein’s over-bearing behavior can even force a candidate to rush to the aid of his or her opponent. Corina Lopez, a San Leandro councilmember, said that during her endorsement meeting last year, Borenstein repeatedly “talked down” to her and her two female opponents. Lopez said that since the city’s police union had already endorsed her, she thought she had no chance of getting Borenstein’s endorsement, but was appalled when he told another candidate, who like Lopez, was an Ivy League graduate, that he could educate her on pensions. According to Lopez, Borenstein said, “If I can make you understand this, I can make anyone understand it.”
“I couldn’t believe it,” said Lopez, who said she felt obliged to defend her opponent in the endorsement meeting. Lopez did not get the Bay Area News Group (BANG) endorsement.
“He has an extreme amount of power, an arrogance of editorial power,” said former Oakland mayor Quan. “It [was] almost like a vendetta from the very beginning.” The Oakland Tribune editorial board pounded Quan early and often for her handling of the city and even told her to not seek re-election before the 2014 race had begun. And Quan said that during her endorsement interview, the discussion focused solely on pensions. “I was pretty disgusted and walked out,” she said. “I didn’t expect fairness, but if you’re interviewing someone for mayor you have to have a much broader range of issues than this narrow pension issue.
“He asked no questions about public safety or economic development,” Quan added, referring to Borenstein. “The fact that I brought in this huge Chinese investment — a billion dollars [for the Brooklyn Basin project] — he didn’t care. He didn’t care that violent crime was down. Being mayor is about more than the long-term pension debts.”
However, there is evidence that in recent years, some politicians have begun to realize that Borenstein is not as powerful as they once believed. In 2012, Jim Prola, a labor-friendly candidate who was then vice mayor of San Leandro, decided to skip the BANG endorsement meeting with Borenstein. “I had already figured out Borenstein would never treat anybody that ever belonged to a union fairly,” said Prola, who is a local board member of the union AFSCME. “I don’t have a lot of respect for the paper. I don’t have a lot of respect for Borenstein. He doesn’t treat people fairly. I do think he’s arrogant and I didn’t see any advantage to go in and get interviewed and waste my time.”
Borenstein endorsed Prola’s opponent, a school board member who pledged to rein in the city’s unfunded pension liabilities. But Prola won re-election, and for progressive candidates in the East Bay, it showed that ignoring Borenstein and BANG didn’t necessarily hurt one’s results at the polls. Corina Lopez learned the same lesson two years later when she won election without Borenstein’s imprimatur.
But while Borenstein’s views and political endorsements may not resonate with progressives west of the hills in cities like Oakland, Berkeley, Richmond and San Leandro, they sing to the choir in the more moderate and conservative Tri-Valley in Alameda and Contra Costa counties. In areas where Republican Catharine Baker can win a seat in the state Assembly and moderates like Steve Glazer can win over voters by antagonizing labor unions, Borenstein’s opinions appear to be well received.
And when Borenstein is sufficiently satisfied by local pols, he can be downright ebullient in his praise. Few editorials in recent years have been more glowing of government than one that appeared last year in support of the hard line taken by Hayward City Council during contract negotiations with more than three hundred city employees. In February 2014, the council voted to impose a 5 percent wage cut on workers after an impasse in negotiations with the union. An unsigned editorial that strongly echoed Borenstein’s views on municipal finance said of the council’s vote: “It took political courage, especially in an election year. And, while painful, it had to be done. Even with those concessions, more cuts are needed or the city will go broke in four years.”