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Bombshell: FOP president says contracts ‘fixed’

The Chicago Fraternal Order Police officially removed beleaguered President Mike Shields from his post — just months after its Illinois

The Chicago Fraternal Order of Police officially removed beleaguered President Mike Shields from his post — just months after its Illinois counterpart suspended him. | Sun-Times files

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Updated: January 18, 2014 6:20AM

Fighting for survival, Fraternal Order of Police President Mike Shields is making an explosive allegation: that the last two police contracts dictated by an independent arbitrator were “fixed” and that the recent sergeants’ contract may also have been “rigged.”

Shields leveled the stunning charges Monday in a letter to Inspector General Joe Ferguson, demanding an investigation. A copy was delivered to FOP board members, including a handful of potential rivals whom Shields is now accusing of being in cahoots with the city.

“I was advised by the organization’s general counsel Paul Geiger that the last two arbitrations involving the City of Chicago were . . . fixed,” Shields wrote in the letter to the inspector general, obtained by the Chicago Sun-Times.

“Specifically, Mr. Geiger informed me that past president Mark Donahue, current and past First Vice-President Bill Dougherty, current and past Financial-Secretary Rich Aguilar and past Third Vice-President Greg Bella had entered into ‘pre-determined’ and backroom deal’ arbitrations — which included precise, agreed-to findings and language — with the city and an arbitrator.

“Mr. Geiger further explained that this tainted process was used in order to give Donahue, Dougherty, Aguilar and Bella political cover against FOP members’ potential accusations that the FOP leadership had ‘sold out’ to the city.”

Arbitrator Edwin H. Benn presided over both of those FOP contracts.

Shields said he’s also “deeply concerned” that the sergeants’ contract recently handed down by a different arbitrator, Steven Bierig, “may have been fixed,” allowing the city to dictate “favorable terms” that will now become the “baseline” for other unions.

Jim Franczek, the city’s chief labor negotiator on all three arbitration decisions in question, called Shields’ allegations “totally baseless.”

Pressed on what would motivate Shields to make such a charge, Franczek said, “He’s desperate because he’s coming up for an election. On Tuesday, FOP candidates are getting their petitions to run. I can only conjecture that’s what this is about.”

Shields stood behind his letter, but provided no additional proof to substantiate his explosive allegations.

“I’m greatly concerned about what impact the sergeants’ arbitration award will have on my membership and I have knowledge of past practices of fixed arbitrations that I think have done a clear disservice to Chicago Police officers and detectives. Lawyers have billed the lodge thousands and thousands of dollars for an arbitration that was phony,” he told the Sun-Times.

Sergeants Association President Jim Ade was dumbfounded when told of Shields’ accusation that the sergeants’ arbitration was rigged in the city’s favor.

“Wow!” Ade said.

Asked if there was any truth to the allegation, Ade said, “Of course not. It’s so ridiculous, I don’t even want to comment on it. Obviously, Mike [Shields] is having trouble with his negotiations and he’s trying to pull out all the stops.”

Pressed on why the sergeants’ arbitration hearing was so short, Ade said, “All I know is, we sat there for two full days of testimony on the points we were arbitrating and the arbitrator came up with his decision.”

Bella, who has not been involved in the FOP leadership for the past three years, called the allegations in Shields’ letter “ludicrous.”

Shields recently apologized to his membership for a paperwork mistake that threatened to deny rank-and-file police officers their automatic right to a retroactive pay raise in 2012. Shields’ blunder has made him politically vulnerable. Dougherty is said to be considering a race against him in the election for FOP president in March.

A top mayoral aide, who asked to remain anonymous, agreed, saying Shields “reminds me of a politician who throws a brick through his own window to get attention. The day before opponents start running, he comes in and drops this bomb.”

Shields’ letter said the “fraudulent nature” of the sergeants’ ruling was demonstrated by the quick-trigger demand for arbitration; the fact that the hearings lasted “only two days” and generated just 250 pages of transcripts, “well below enough evidence” for sergeants to “defend against” the city’s positions, and that the decision was reached with “extraordinary” speed in just seven weeks.

Earlier this year, an actuarial analysis distributed by Shields helped torpedo a sergeants’ contract that Mayor Rahm Emanuel had hoped to use as a road map to solve the city’s nearly $20 billion pension crisis.

The failed agreement would have given sergeants a 9 percent pay raise over four years in exchange for raising the retirement age for sergeants to 53; increasing employee pension contributions from 9 to 12 percent by January 2015; hiking health care contributions for new retirees to 2 percent of annuities; forfeiting cost-of-living increases every other year and limited C.O.L.A. in intervening years to 2.5 percent with simple interest.

City Hall and the sergeants union had also agreed to seek state legislation that would have given the city seven years to “ramp up” funding for police pensions, instead of coughing up another $600 million to stabilize police and fire pension funds in 2015.

The arbitrator’s award, expected to cost Chicago taxpayers $7.6 million, guarantees sergeants an 8 percent pay raise over four years. But it requires those who retire between the ages of 55 and 65 to contribute 2 percent of their annuities toward health insurance that’s currently provided for free.

Rank-and-file officers, meanwhile, continue to work under an old contract.

Shields took flak from his membership for failing last year to notify the city between Feb. 1 and March 1 that he intended to terminate the police contract and commence negotiations on a new agreement.

If that notice is not given within the one-month window, the contract automatically rolls over for another year.

When the same one-month window rolled around this year, Shields acknowledged his earlier mistake by sending the city the required notice to avoid having the old contract roll over for a second straight year.

Last month, the Chicago Sun-Times disclosed that Emanuel wants rank-and-file officers to pay a price for their union president’s mistake.

The newspaper reported that Emanuel was offering Chicago Police officers a 5 percent pay raise over three years — with no retroactive pay raise — and demanding that active officers double their health care contributions while new retirees pay 4 percent of annuities for coverage now provided for free.

Shields said he was stunned by the mayor’s “insulting” first offer.

The FOP has demanded a 12 percent pay raise over two years to make up for losses suffered in the last contract, when arbitrator Benn awarded rank-and-file police officers a 10 percent pay increase over five years, their smallest increase in 30 years.

Starting pay for Chicago Police officers currently stands at $43,104 a year, $61,530 after the first 12 months and $86,130 after 25 years of continuous service.

In 2005, Benn handed down a police contract that set the standard for health care for all city employees. It increased employee contributions by one-third — from 1.5 percent of salary to 2 percent — and raised deductibles to ease the burden of skyrocketing health insurance costs.

At the time, then-FOP President Mark Donahue declared victory, saying, “I personally believe we did get the better end” of the deal. He singled out then-Corporation Counsel Mara Georges for criticism, saying she failed to understand officers’ frustration of going without a contract since mid-2003.

Then-Budget Director John Harris, who was later convicted of corruption along with former Gov. Rod Blagojevich, responded: “We did our duty to protect the taxpayer.”

Aguilar, Benn, Bierig, Donahue, Dougherty and Geiger could not be reached for comment.

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