WASHINGTON, DC -- Central New York union workers were represented on Capitol Hill today in a hearing of the House Financial Services Committee which is investigating the effects of the Bernard Madoff ponzi scheme.
"My members have no real coverage," said Gregory Lancette who is the union steward for Plumbers and Steamfitters Local 267 in Syracuse. "Because my members like millions across the country rely on pooled investments for their retirement. SIPC coverage does not protect them."
Lancette detailed the enormous financial losses from the fund that provides money to the 1,115 pension plan participants with Local 267. He said at the time of Madoff's arrest the union had $34 million invested directly with Madoff. They also had $6.5 million in a Beacon and Associates fund that was 40 percent invested in Madoff. Out of those tens of millions lost the pension fund can only recoup $500,000.
The problem with the Securities Investor Protection Corporation legislation is it treats each investor as an individual. Consequently a union that invests as a group is only entitled to a maximum of $500,000 in relief.
The scandal that broke a year ago when Bernard Madoff was arrested at his Manhattan penthouse and the biggest investment fraud in U.S. history came to light. Losses are estimated at $13 billion to $19 billion.
Thousands of individuals - including ordinary people and Hollywood celebrities - as well as big hedge funds, international banks and charities worldwide lost money investing with Madoff. He is serving a 150 year sentence in federal prison after pleading guilty in March.
Democratic Rep. Dan Maffei of Syracuse sits on the House Financial Services committee and was recognized by Greg Lancette as he began his testimony.
Information from the Associated Press was used in this report.
