President of PAN AM Retiree Group Calls on Aging Committee to Investigate Inconsistencies in testimony of PBGC Executive Director

Business Wire, Sept 22, 2000

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 22, 2000

Richard Brooks president of the Association of Former

Pan Am Employees, Inc. says testimony at hearings justifies

virtually all of the Pan Am retirees' charges leveled at

PBGC for financial and management irregularities.

Richard Brooks, the president of The Association of Former Pan Am Employees, Inc. ("AFPAE"), today called upon Senator Charles GRASSLEY to pursue discrepancies in the sworn testimony given by David Strauss, the Executive Director of the Pension Benefit Guaranty Corporation ("PBGC"), before the Senate Select Committee on Aging.

"We commend the diligent work of the Aging Committee in documenting the PBGC's poor management, financial and contracting practices, resulting in abysmally poor service to the retirees it was formed to protect." The hearings confirm allegations leveled by AFPAE against PBGC for more than nine years.

However, Brooks continued, there still is a long way to go. Unfortunately, the Hearings did little to document systematic abuses in the manner PBGC treats participants. This is not a matter of how fast PBGC returns phone calls, stated Brooks, it involves depravation of the fundamental legal rights guaranteed by the pension laws. Participants who wait 7 to 10 years or more, to receive an "appealable" decision from PBGC, have only 45 days to appeal that decision.-a fundamentally unfair process.

It was clear that David Strauss could not adequately explain his agency's conduct, added Brooks. Strauss attempted to blame the poor quality of employees hired by PBGC's Atlanta contractor on the tight job market. In doing so, Strauss ignored the fact that the contractor, IMRG reduced the salaries of many of its employees. Strauss also failed to address the fact that PBGC had a full staff of experienced and knowledgeable former Pan Am human resources employees in Rosedale, NY. It abandoned most of these employees when it moved the administration of the Pan Am Plan to Atlanta.

PBGC and IMRG also need to disclose whether IMRG passed on the savings it realized by reducing salaries to employees. Taxpayers have a right to know whether IMRG defrauded the taxpayers, by pocketing the difference.

Finally, stated Brooks, we do not understand why Strauss failed to reiterate his previous response to allegations of impropriety by Bennie Hagans, PBGC's Director of Insurance Operations. Strauss has told every agency investigating this allegation that the charges were motivated by racism. Yet, when testifying under oath before the Committee, Strauss omitted this charge. The Committee is entitled to know whether Strauss simply used the "race card" for the purpose of impeding several Federal investigations.