Treasury Probing IBM Cash Balance Document Alteration
Dennis Schindel, acting Treasury inspector general, told the House Financial Services oversight subcommittee Wednesday that his office was discussing potential criminal charges against participants in the incident with federal prosecutors, the Washington Post reported. Schindel told lawmakers his probe should be wrapped up in about two months.
The document, which IBM claims was merely reformatted to make it more clear that it was from the Treasury Department, was a list of “talking points” opposing an amendment that Representative Bernard Sanders (I-Vermont) offered last year. The Sanders amendment barred the Treasury from working on any regulations contrary to an Illinois judge’s widely followed finding in a case involving IBM that cash balance plans violate federal age-discrimination laws (See Murphy’s Law: IBM Loses Cash Balance Ruling ). Sanders’s amendment was later adopted (See Emotion Charged Cash Balance Plan Amendment Passes US House ).
IBM has contended that it didn’t alter the substance or wording of the document, which was headlined “Treasury strongly opposes the Sanders amendment to the Transportation/Treasury appropriations bill.” The company thought “we were distributing a public document that we understood was widely distributed by Treasury,” IBM spokeswoman Kendra Collins told the Post. “IBM has cooperated fully with the Treasury Department.”
Sanders said it was his understanding that the inspector general’s probe may implicate the Treasury’s benefits tax counsel as possibly having aided IBM. Schindel said only, “We are continuing to look into” possible involvement of Treasury officials.
Older workers, who fear they will not get the pensions they expected have brought a number of discrimination suits against cash balance plans in recent years Most of those suits have been rejected, but IBM’s workers scored a victory last year in the Illinois case. That ruling is on appeal, but IBM and other employers have been pressing the Treasury and Congress to clarify that cash balance plans do not violate federal law.
The department did issue regulations to that effect, but has withdrawn them (See Cash Balance Regulations Off Again….Again ). The administration proposed legislation earlier this year that it said would allow cash balance plans while protecting older workers.
“It is bad enough that the Bush administration is publicly siding with major corporations who are trying to cut back on the pensions that their workers were promised,” Sanders said in a statement . “It is an outrage that, from what we understand, a staff member in the Treasury Department illegally colluded with one of these corporations (IBM) to try to defeat a pro-worker amendment that I successfully offered which protects the pensions of millions of employees.”
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