Embattled former alderman uses loophole to double pension
CHICAGO - He's at the center of a growing federal corruption investigation, but former Chicago Ald. Danny Solis has just started collecting a pension of nearly $100,000.
Now, a FOX 32 investigation has found Solis was able to more than double his pension payout by taking advantage of a little-known loophole when he suddenly resigned from office earlier this year.
It’s been months since anybody has seen the former alderman in the 25th ward. The new alderman's name is literally taped over Solis' name at his old ward office.
"The mess that was left for us here in the 25th ward, there's got to be justice,” said Ald. Byron Sigcho-Lopez.
Solis disappeared after it was learned earlier this year that he had been ensnared in a federal corruption investigation and had been secretly cooperating with the FBI for at least two years, possibly wearing a wire.
Federal documents show Solis flipped after the feds caught him trading political favors for campaign contributions, Viagra and trips to a massage parlor.
However, it turns out Solis' biggest political payday is perfectly legal.
We showed pension expert Bill Zettler what we had found. In a letter to then-alderman Solis last year, the municipal employee's annuity and benefit fund informed Solis that if he retired in May he could expect a pension of about $3,600 a month, or $44,000 a year.
However, they also informed Solis of a sweetener only available to elected officials in Chicago, allowing them to purchase pension credits retroactively.
So in January, Solis wrote two checks to the pension fund totaling a little more than $128,000. That allowed Solis to more than double his pension payout to $7,900 a month and $94,000 a year.
Zettler says Solis’ pension boost will pay off that $128,000 investment in just two and a half years, and also put another $1.3 million in Solis’ pocket if he lives another 15 years, which is 10 times the initial investment.
“It's a can't-lose situation for the people involved,” said Zettler.
Amazingly, Solis was able to buy retroactive pension credits for his three-month stint working for the Chicago Public Library in the 1960s when he was 17 and have it paid out based on his six-figure aldermanic salary.
Solis's replacement says what's frustrating is that despite the corruption scandal, Solis will be able to keep his aldermanic pension if he's not convicted, and because he's cooperating with the feds, he may never be charged.
“He seems to be very astute when it comes to playing the system and taking advantage of loopholes. Not so much about thinking about the public good,” said Ald. Sigcho-Lopez.
The pension loophole benefitting elected officials was done away with by the legislature several years ago, but still applies to anyone who held office before 2011.
The city pension fund that's paying Solis is only 25 percent funded and in danger of going broke.