The New York Times has a devastating article up on the incestuous relationship between public sector union officials and the New York state legislature. The actual controversy is downright farcical: legislators relied on a public sector union accountant to determine the cost of proposed increases to the state’s employee pension plan.

A reasonable observer might suggest that this arrangement represented a clear conflict of interest, but to New York state legislators it was just good book-keeping. According to the Times, the union actuary "reviewed" hundreds of bills for the state before being exposed by the paper’s investigation. What’s more, the Times reports that the actuary neglected to mention additional legislative costs of up $500 million in his original reports.

The Times’ description of the actuary’s "methodology" is particularly mind-boggling (emphasis mine):

" . . . in an arrangement that had not been publicly disclosed, Mr. Schwartz [the union actuary] was being paid by labor unions. He acknowledged in an interview that he skewed his work to favor the [union’s interests], calling his job “a step above voodoo.”

As a result, legislative leaders said they would no longer rely on Mr. Schwartz’s work, and a disciplinary board affiliated with the American Academy of Actuaries has begun a review of Mr. Schwartz’s conduct.

The Legislature relied almost exclusively on Mr. Schwartz — a consultant to District Council 37, the umbrella group of municipal unions as well as to unions representing firefighters, teachers, detectives and correction officers — to determine the cost of pension bills involving New York City employees."

Fortunately, Empire State legislators swung into action to reasssure the Times that they were monitoring the situation all along. I’m sure New York taxpayers are greatly reassured by their representatives’ scrupulous accounting procedures:

"Despite legislative leaders’ assertions that they undertake independent financial analyses of the pension bills, neither the Senate nor the Assembly could provide any records to bolster that claim."

Unfortunately, this sort of lax book-keeping is par for the course when it comes to union pension funds which are often managed for the benefit of union bosses, rather than the pensioners. The incident also highlights the dangerous potential for union political activism in the legislative sphere.

When things get too cozy, there really are no breaks on political corruption. In another instance, Schwartz analyzed a Big Labor supported bill and basically lied to the legislature — saying it would result in no additional costs to taxpayers.

"Mr. Schwartz conceded in an interview last month that he knew the bill would actually have a significant cost, explaining, “I got a little bit carried away in my formulation.”

He added that he made his projections look “as cheap as possible” to favor his clients."