The Enron Debacle Pales Compared to this Scandal
By Robert Greenslade

There is a retirement scandal that makes the recent Enron debacle pale in comparison. A very well known organization told people that if they made contributions to a retirement fund, the organization would put the money in a special account for their retirement. As it turns out, the organization did not place the contributions in a special account as it promised, but placed them in the organization's general fund each year and spent them. It then paid out benefits from its operating budget the following year. In addition, every year the organization took in more money in contributions than it paid out in benefits. It called this excess a "retirement surplus." The so-called surplus was not returned to the individual contributors or credited to their account. Instead, the organization spent the excess each year to cover other expenditures.

When this case reached the United States Supreme Court, the Court ruled that the people were not actually making contributions to a special retirement fund because the contributions they paid to the organization were "not earmarked in any way." The Court also ruled that the organization was under no legal obligation to pay out benefits from the so-called contributions but if it did, the payments were in the nature of charity and were solely at the discretion of the organization. The Court subsequently ruled that if the organization decided to modify the program or stop paying out so-called retirement benefits, the people who paid into the program during the course of their life would not have any legal claim for promised benefits.

The reason Congress is not holding hearings and berating corporate executives about this scandal is because they are the organization perpetrating it. Its called Social Security.

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