here's our primetime lineup for tonight. >> and now on booktv, ellen schultz argues that many large companies have plundered employee pension plans over the past decades. she talks about the crisis the theft has created. this is just under an hour. >> some years back i went out to iowa, sioux falls, to meet with a group of retired meatpackers. and i don't know what you're image of retired meatpackers is,

but i suspect most people think they are a pretty tough law. i went out to this family diner on the edge of town near the bowling over the guys in lives would get together every month or so over the needs of special, say a prayer, they would read off a list of people who have died that month, if any. and to get a chitchatting, mostly social. but one of the things that kept coming up with them was the struggle they were having because their health benefits have been cut. these were benefits they have been promised decades ago. give you an example, one of the fellows there had started at hormel meatpacking plant right out of high school in the '30s. like a lot of the guys, he left to go to the second world war, survived and came back. then he worked another 30 or 40 years at the plant. retired to enjoy his remaining life, clayton was secure.

he had a pinch-hit our spirit he had retiree health benefits. these guys, there were millions of these guys out there, and women, who had earned maybe a trillion dollars in the for pay, which is essentially what attention is. its deferred compensation. they aren't pension. they earned health care. we cases they were promised death benefits and life insurance. these were not gratuity. this was pay. now, they retired and then starting in the '90s mostly they started getting notices telling them gee, we're really sorry but we can't afford to pay these benefits. it's just too expensive. they basically accepted the companies were struggling. who questioned when companies say retirees are expensive. it's or something you just can't question it. about the time i was meeting with these guys come in washington there was another meeting going on.

it was pension experts are getting together to talk about a terrible pension problem they were having. the big problem was there was too much money in pension plans. this might seem surprising now, with all the talk about underfunded pensions, but at the time in the late 90s there was a quarter of a trillion dollars surplus assets in pension plans. that's $250 billion. from the company's point of view the problem was that it was just a shame, shame that this money was locked up, company couldn't use it for something. a law had been enacted back in 1974 that said you have to find your pension plans and you have to keep your hands off the money. congress enacted this law because through the '60s and '50s that the many abuses. there were famous debacles like studebaker which went bankrupt and people lost a lot of their pension. congress put this law in place

that said if you offer pensions, which, of course, is voluntary, you have to fund it, keep your hands off, let it grow. this law work so well that by the 1980s there were huge surpluses in many lands. companies like ge, which to this day has never put a cent more into its pension plan, not since the 1980s. you had this growing amount of surplus, and then along came a bunch of pension raters, famous ones who saw these companies with that pension plans and said let's kill the plan off, take over the company and then we will be able to take the surplus. that was going on. you probably heard about this. many retirees were losing some of their pension. so can congress stepped in and said you can't do that, guys. we'll put an excise tax on this. you can't take the surplus. they put that in place. before the ink was drying,

employers and their lawyers and consultants were working together to work out how can you get around this inconvenience? because they still wanted that surplus. so what people didn't realize was that through the '90s employers had developed a number of ways to tap the surplus assets. one of the most common was during restructuring. they had hundreds of thousands, if not millions, of older workers in their 50s, early '60s who had been at the company for decades. they were expensive. they were in topeka pension earnings years, and this was the population you want to get rid of. so they use billions of dollars in surplus to help finance restructuring. they didn't use it to pay cash severance because you are not allowed to do that. instead, they called it an incentive benefit of some kind. for example, bell atlantic use $3 billion to get 25,000 of its management employees to leave,

and you had a number of companies doing this and billions of dollars going out of the plan. this was saving the company cash because they didn't have to come into the corporate coffers to pay for. they just use pension assets. meanwhile, you have companies like dupont which have pioneered this technique of taking money out of the plan to pay for retiree health benefits. again, this saved the company's cash because they didn't have to reach into the coffers and pay this for the health care. you had now two things going on. you had companies taking money out to pay for the restructuring and money to pay for the retiree health. that's a lot of money going out the door. to give you an example of how much, bell atlantic which took 3 billion then merged with gte and became verizon, and subsequently the company took 5 billion more out of the plan in the 2000. again, to pay for restructuring. unfortunately, this tendency, this practice was very popular

with companies that were in financial trouble. so take the airline, united and delta, u.s. air, after the september 11 disaster they were going down hill and they tap the pension plan a number of times to take billions out to pay, to lay off people. so they were using it for that. gm, ford, delphi, the spinoff, again, they were also taking out billions even as they were headed into disaster. so, meanwhile, as this was happening there were yet other ways companies were pulling billions out. the other ways are even harder to find out about. what they were doing was selling pension assets because in a swirl of mergers and acquisitions, they'd realize you could actually monetize the assets in pension plans. the way to do is let's say you're selling the unit, send over 25,000 retirees and employees, you send over the

pension to pay for what you send a little extra, maybe 100 billion. and the buyer pays you for that, patient 87 cents on the dollar so you get 70 million. you're happy. you cut 70 million for each money for that. the buyer is happy because he got something worth 10 million only paid -- e. paid 70 million for something worth 100 million. so they're happy. so who's not happy? will, the pension plan is less well-funded. so you take this strategy, there are many -- especially at the defense contractors, raytheon, you do this any number of times, no one is watching you. it's not disclose anywhere usually. and you have just buckets of money going out the door for this sort of thing. meanwhile, there was another way they're taking money out. and this was to pay for executive parachute that a number of companies, in some cases it was a minor amount like royal sun alliance which was and ensure that decided to lay off a

bunch of people, and by the way, we're going to give the h.r. folks and executives extra money out of the regular plan. now, this wasn't really a legal thing to do but thanks to google they developed they were taking money that was set aside for regular employees and put it over on the executive site. so this was going on as well. you had all these things happening, drawing assets out of the plan, people were not paying attention though because the bull market was going on for a lot of money, the assets were rising. people were not aware. but employers realize this is a good gimmick. to be able to use the pension plan like a piggy bank. so they want to actually continue to be able to do that, but the way they were able to postpone the impact was to cut benefits. because if you cut benefits, that's more money that stays in

the plan that you can pull out and used later for other things like paying executives or selling it. so you had in the '90s these waves of pension cuts, companies like ibm and at&t, large companies where again the a large older workforces in topeka pension earnings years. now, people didn't know their pensions were being cut because the employers use strategies that were very hard for the regular person to perceive. to give you an idea, generally if anyone figured it out it was an engineer because engineers, were very numbers oriented. they are get a hold of the plain and simple, how exactly, how is my pension changing? you would know from what the employers told you because they said what improving the plan, we are going to get rid of this old-fashioned pension plan and give you a better one, it's going to be portable. it will look like a 401(k). instead of his mysterious formula, years, you know,

average pay, we are going to instead give you something that looks like an account and you can take it with you when you go. so this was going on for years before finally enough people figured out what was happening was this formula was a way to hide the fact that their pensions were being cut i as much as 20-50%, especially for older people. being cut in two ways. not only growing as fast but for a lot of older folks at pensions were frozen altogether. sometimes for years. and if you think it was, it's harsh to say the companies hit it, i would point you to signum which found itself in federal court over this very issue when is retirees sued. because as it turned out cigna had a number of documents in which they detailed their efforts to keep these practices hidden. they didn't want to provoke an employee backlash so the idea was we just won't let them know

the benefits are being cut. and a celebrated afterwards. they were congratulating themselves on how effective this was because employees didn't notice. there was an element of deception throughout this process. so what you're having then are all these companies cutting benefits so they can pull the money out and continuing to pull the money out. but there's another reason that they were cutting benefits, even as they had these massive surpluses. they were doing it because of changes in accounting rules. this may sound incredibly dull and hard to grasp, but all you need to know is this, when these accounting rules changed in the early '90s it said companies, if you're going to promised pensions, you have this big liability to you have to put it on your books. now, a pension is a debt so it's like putting a great big debt on the books. so companies did this and actually there were sat at the

time because who likes to have a big debt go on the books? but it's equally i think they were thrilled because what happens when you take away some of the debt? got a dead, you generate gain. these gains going to profit, just like profits from selling trucks or software. so what happened was suddenly you're this trillion dollars owed to retirees both are pensioners, retiree health care, also for life insurance and other things. and the plans became cookie jars for companies. they realize if you can get the benefit, even if they're not costing you anything, even if you're not really plan to pay them out anyway, if you cut them you will get that going to keep the money which is wonderful, but you'll be able to generate profit to boost earnings. so what was going on in the '90s and into the 2000s is billions of dollars were being converted into profit for companies. it was going straight into

income. at some companies, at some quarters it was the only income they have. companies like lucent for example. so as this was going on, you could see that the plans were morphing into profit centers. so they were a source of cash, a source of earning. unfortunately for retirees and employees there was yet another thing going on at the time. this coincided with a shift in executive pay. instead of just giving executives great big salaries, companies were changing to more performance-based for tax reasons. so a lot of executive compensation now is being tied to earnings, stock went up, so will your bonus. so suddenly executives pay had a direct connection to earnings. and, of course, executives that were green lighting these moves to cut benefits, whether deliberately or not, were boosting their own pay.

and we have heard plenty about how paid for ex-exec gone up so dramatic and over the past 15, 20 years, but what was also happening was that as the pay grew, companies, executives were deferring it. so companies were essentially putting their executive pay on ebay credit card. it's no different from a pension liability. ..

>> even if you look at 10k, which few people do, but you'll see a big number, and pensions are costly. at some companies, the big costs was for the executives, and it still is because it's growing, so with these two trends, you have an almost unstoppable machine where the pensions and health care were just waiting to be trimmed, and companies could control when they were taking money out and control when they were cutting, and this process enables them to use the plans essentially to help manage earnings because if you need to, oh, hit your target earnings of two cents a share, you know how much to cut on the retirees' side to get that cut, two sents a share. you can choose discount rates and a number of other assumptions to make the debt go

down. this was going on and explains a lot to what was happening to retiree plans, and what became really tragic was with retiree populations because we've seen how retirees are often very helpless, in this process, companies, of course, were moving retirees around if they sold or bought a unit, so the retirees have become like a resource for companies. they are like a portfolio. you know, you have the debt, which is what's owed to them, you and had the assets which is the money in the pension plans and sometime retiree health care trusts. there's debts and assets, and with this portfolio, if you're the buyer and have this, your incentive now is to try to monetize that in a way, so if you want to cut the benefits, you'll get profit out of it, so, perhaps, a company that

impressed me with the most aggressive ability to do this was lucent, the at&t spinoff. they spun off all of its western electric and bell apps into lucent in the late 90s. they had 130,000 retirees, but started with more than enough money to pay for every single one both with the health care and pensions because they got that too, but over the years, they started to continually cut retiree benefits, and they cut it bit by bit here and there, union, salary, everybody got hit, and by doing that, they kept hold of the money which was boosting their earnings, and that was one company where in many quarters the only income was from retiree benefit cuts.

now, this was not sort of an equal paying situation. to give you an example, one of the more obvious cuts was to cut the death benefit. it told the re tire reis, you know, we've promised you or your predecessor companies promised you in the 50s or 60s or whatever, and it's the equivalent of your final year salary, and people counted on this. they were expecting to have $30,000 or 40,000, whatever their final salary had been, so what lucent did was tell people we can't afford to pay that. i know your prior employer promised that to you, but we just can't afford it. they cut the death benefit, and people sort of accepted it. they were unhappy, but they said, well, of course, they're struggling. we have to bite the bullet, but

the same year, they paid up $400 million in bonuses. 400 million cut from retirees and 400 million cut from bonuses. this process of increasing executive benefits was a parallel process. what surprises people also is the length to which companies have gone to try and finance those executive benefits. one of the things they were doing was using loopholes to tap the regular pension plan to take money out of it to pay for executives, and this has been going on at many of the major companies, and it's still going on. it's contrary to the intent of congress which says if you have a regular pension plan, you have to treat everyone the same. you can't have like a special deal where someone can come in and get another $100,000 out of it, so this continues to go on. meanwhile, in another more

colorful effort to finance executive pay, what i was surprised to find was that the companies were taking out billions of dollars in life insurance on their workers, and using the policies as like giant iras, tax shelters, putting money in, grows tax deferred, and ultimately when the retirees or employees die, the death benefit goes to the company. now, some people heard about that back in the 1990s because it was going on then, and many assumed it stopped, but it didn't. it's actually increased. companies have continued to by billions of dollars in life insurance on the employees, and the biggest buyers these days are the banks, buying billions in the subprime crisis because bank executive pay is bigger than anything else out there.

there's portfolios of life insurance on workers that can boggle the mind, and if you may wonder how your employer or former employer keeps track of when you die, it's simple. they just look at the social security death index coming out every month, do a run, hit all the social security numbers, figure out who died, and just put in the claim with the insurer, and so this is just to give you an idea of the kinds of things companies have been doing with the plans, and the effect of this, of course, is to constantly put pressure on the retirees to create a perception the plans are expensive and that explains to retirees why they don't want to continue to pay the benefits, but the plans are profitable to employers. a lot of pensions now are frozen like verizon, dupont, many of

the companies, ibm, they have frozen the plans so they are not growing for anyone anymore. they reached a point once the markets went down, there was not enough surplus, not enough asset, anymore, to protect the plan, so they become underfunded, so this was not an accident. it was not something that had to happen. the plans had big surpluses, and now they are underfunded, and companies continue to lobby for the ability to take more money out of the plans for these various purposes. usually explaning that it's good for retirement security that they have this flexibility, but it's continuing to have an effect on retirees, and employees. to continue to protect their ain't to take these assets out, companies have been very aggressive in the court system

with finding ways to fight retirees that try to fight back, 10 you've seen -- so you've seen many cases end up in the court, both over pension cuts which have been challenged by many retirees and retiree health care cuts. companies have been extraordinarily aggressive with techniques like suing retirees, especially union retirees because they have a contract, and if you have a contract, it's a little tougher for the company to just say we're going to discontinue your coverage, so what they've done is they go sue a retiree, get them into a court before a judge that has pro-business rulings in the past and try to argue to the judge that you really need to cut the benefits because, you know, they are expensive, and a company can't survive without it, and in some cases, they have used

arguments like, yes, we promised lifetime benefits. we didn't mean your lifetime. we meant the life of the contract, so this actually worked with some judges, and people lost their benefits, so if you feel somewhat beleaguered, this gives you a backdrop into what's been going on, and with that, i invite your questions because i suspect you might have some thoughts about some of this. anybody? yes, martha? >> i'm wonder wondering -- you know, you said this was contrary ton the intent of congress and not what they meant. they were trying to protect the plan participant. do you have any sense as to why congress hasn't acted to clarify either in the law or close

loopholes that would prevent this kind of practice? >> i think there's been such a strong argument made to congress by employers and the retirement industry that these loopholes need to exist, and mind you, they don't call them loopholes, but the practices need to exist in order for the companies to maintain flex the. this always seems to resinate if you go to congress and say, look, you know, don't tie our hands with this, don't have burdensome regulations because if you don't let us pull money out when we need it or put more money in than we need to when we want to, then we just won't have these plans at all, and that usually is a very effective argument to congress even though it's not actually true. i hope that helps. >> it doesn't feel good. i understand what you're say, but it doesn't feel good.

>> yes, ed? >> what kind of research went into your book as far as what documents did you look at, and, you know, are the same documents available to retiree groups to dig into? >> yes, the only way you can dig into this is through documents because it's not something employers will discuss if you call them up on the phone, and i was initialed surprised myself because i couldn't understand why companies were cutting benefits when they had billions of dollars in surplus. it didn't make sense. what led me down the path was when ibm cut their plan telling people it's a better plan now, but they told shareholders it's going to gave us $200 million. i didn't understand what they meant by that. i thought they were talking cash savings, which thigh were not, but talking about the accounting

effect. reducing liability by 200 million, and when you do that, that's 200 million into your profits immediately or over time, 10 the only way to see it happening is going into the annual reports of the 10ks with pension footnotes including numbers that show the size of the liability and different assumptions used to calculate it, so that gives you an idea. that's the only place you really can go for this. yes? >> i'm from at&t, and we just had our case get to the appeals court in philadelphia. it was like you described. the engineers are always an engineers, and it's been the greatest thing since sliced bread, you got more choice -- >> what company? >> at&t. and it's just like that, you

know, i was complaining or voicing my disstress at a company meeting, and a couple years later, three years later, somebody, you know, came back to me and said, you know, i have to apologize, joyce, you know, back when you talked at that town meeting and said, you know, don't do this, it's bad, i was looking at my lump sum, and i thought it was a lot of money, and he's like, it's not grown. i guess -- do you have a comment on -- among all the other things the judge dismissed in our case. they said that they let at&t off because they said, well, you didn't need to tell them there was a cut in benefit, which they clearly didn't tell us because that would have been confusing. that's what the judge said. do you have any comments on the

at&t case? thank you very much. >> actually, i've seen a lot of examples of this where companies have resisted making clear disclosures on the ground that it would confuse people if you gave them information. now, there is a law. there's a section under pension law 204h saying a significant cut in benefits must be disclosed, but as we've seen with companies like sigma, there's ways around that like just ignoring it, for example, or giving people a piece of paper that says your plan is changing these ways. by the way, 204h applies. now, that's -- companies said that complies with the requirements of disclosure, but it actually doesn't, and in my book, i talk about sessions where actuaries discuss how to avoid providing disclosure saying, well, you can say things

are changing, and you can refer to a 204h, but, you don't have to use the magic words "your benefits are big cut," so just don't use those magic words, 10 the disclosure issue was at play in a lot of pension conversions, and yet another one you raised as well is the lump sum payouts because a lot of companies at this time began offering lump sums to people saying, realm, with the new plans, we'll give you a lump sum. it's modern, portable, and that's why the pensions are better -- for a portable work force. the problem with that was the work force was not more mobile. the population they were trying to get rid of was not more mobile. they were people in their 50s trying to get to a point where their pensions was building to an adequate level, 10 one of the techniques to get people to leave was, you know, if you leave during this retirement window, you get extra pension in a lump sum so you can take it

with you, invest it, buy a franchise, whatever, so people were dazzled with what looked to be a large sum of money. the problem was though that if you give out a lump sum, you can give people less pension than they've earned. now, normally, it's against the law. it's pretty clear under pension law that if you give someone less pension than they have earned, you have violated the anticut back rule. that's clear. here's where lump sums make it possible. if you give someone a lump sum say of $300,000, and the person's actually earned a benefit worth $400,000, well, if they choose to take that lump sum not knowing they should have been given $400,000, then they are essentially cutting their benefits, choosing to cut their benefit. legally, that's sort of how it works, so you had a lot of people seeing big lump sum

dollars, not the engineers. they usually figured it out, but they saw the big pot of money taking it and running not realizing they were cutting 20% or as much as, you know, another 30% off of their pension. that also was a little disclosure issue. now, as to the case you're referring to, that's happened with a lot of the suits over pension chain r changes, but over alleges age discrimination, and there's two reasons for that. one was under pension law, you cannot have a declining rate of accrual. that's a complicated phrase nobody understands it. but in a nutshell it says you can't have a pension get smaller over time in a certain way, and these changes actually did that. when this got to federal courts, some judges said, yeah, this is clearly a violation of that. other judges said, well, you

know, why should the pension law apply to the plans. they look like 401k, so why should pension law apply? that succeeded in some circuits. the other element though that always has bothered me more than that even is that this practice of freezing older workers' pensions also in a deceptive way because people didn't know their pensions were being frozen, and how that worked was when you converted the plan, in a traditional method, several years multiplied by your pay, and let's say that's in present dollars worth $500,000. that $500,000 represents your 20,000 a month for life, okay? starting at age 65, so that's a finite amount, 500. what they did for some people, a lot of people actually, is

instead of giving them that $500,000 as their opening balance, they would lowball it giving them $400,000. now, since the person getting that balance didn't know the difference. they didn't know their pension was actually worth five would see the opening balance be 400, and they said, okay, well, that's what the pension's worth, but the trick is this -- because you're starting out under water, your pension's not going to grow until you have enough years of these new pay credits going in to bring it back up to the level that it was when they changed the plan, and companies like at&t, as you know, for some people that would take as long as 1 years. i -- 13 years. i talked to a woman who was at sigma in a pension area, and her pension was cut like that, and

she had no idea until she ran into a fellow executive at a going away party for someone, and he said, if you knew how much were pension had been cut, you'd be sick. she said, well, frankly, i was sick when i figured it out because for her it would have meant a pension cut for the rest of her career, so people didn't pick up on that definitely. they didn't understand that just the older people were being frozen. how can it be legal to have only older people be affected by a cut and not younger people? well, that's the magic of pension law. this concept called wear away has been bannedded now under congress, so it can't happen anymore going forward, but everything that took place up until the time the law changed a few years ago, it is deemed legal, so, i mean, congress finally caught up with it and

said, oh, we're not going to let you do that, but sorry for you at&t and sigma folks. it's kind of too late. >> the thing that also really got me when they first did this, that didn't get much publicity, and i think it's legal, but it's morally wrong. when we had our traditional pension, multiply a percent for anybody, somebody making $40,000, somebody making $140,000, somebody, you know, making $200,000. when at&t changed it, they put a knee in the curve saying, okay, you're going to get half the rate up to the social security rates base, and doubled rate over the wage. same amount of money in the pot, didn't put more money in there, and i just -- i just want the to say that. it was just, you know, so it's doing what you're saying. they got a pot of money, and

they're skewing it. >> yes? >> i think you're saying many people didn't know, they were unaware of the change, and i think that says something in terms of retirees of the past were more trusting, ect., and i think that's the message going forward, you know? i don't think we can have trust anymore with companies, and i think as retirees, we have to be very proactive in this area to protect our earned benefits. your comment? >> i think when you're looking at a trillion dollars, there's always going to be a number of people, groups, interested in participating in that trillion dollars, so for people to assume they don't have to pay attention to what's happening to their benefits is naive. there's so many forces at work that want to manage that money,

take a bit of the money -- i forgot the mention the other way the assets were paid out of the plan. they could use the assets also to pay actuaries and lawyers who helped them cut the benefits, so no way to measure that, but it's probably fairly significant. yes? >> two things. number one -- i read recently a survey of employers done by one of the major compensation benefit consults firms, the showing of trends dropping health care for retirees. we've seen data from the pbgc in the drop in the number of defined benefit plans that exist anymore. given those two scenarios and what you found, what's the implications going forward for baby boomers and their pensions and their health care and their post retirement life? >> well, what you say about the

retiree health and the companies dropping it, you'll see that's not completely true and find that companies drop it for salaried employees, but it's a little tougher to drop it for collectively bargained employed because, you know, there's contracts that are tougher to get around using other strategies like suing them in a pro-business jurisdiction, so the pattern we've seen is that the first people to go are salaried. this happened with employees, any number of other companies where the salary folks were first luredded out the door of promises with retiree health care, and then, you know, low and behold a year later, oh, we can't afford that, sorry, so what has happened now is the retirees have seen their premiums have been going up steeply, incredibly steeply, and at some companies actually one reason they are going up steeply is not because the costs are

going up. that's the other thing that companies are not really clear about. their costs are not spiraling. see, years ago, most of the companies put caps on what they would spend. they knew that they would never spend more than x dollars for a population, so the people can get as old and sick as they possibly can, and the company's protected from that. what happens is once the cap is reached, all the costs get passed on, so in the salary groups yorks have people who hit that, and then the costs go up. people who afford it or have a spouse with coverage, they drop out because they can't spend $100 a month so what remains is older sicker people who have no other options creating a classic death spiral with increasingly, costly groups, and this benefits companies because the more people who drop out, well, that's people they don't have to pay for. another way that i've seen

another factor increasing these costs is that companies can charge salary people more, and some of them do, so subsidize what they have to pay for the collectively bargained groups. we are going to charge the salary guys more, use the excess amount to pay so we don't have to pay, and, of course, this is have a finite life, so i'll drop out, but we'll enjoy it while it lasts. that's a trend i've seen with the retiree health care. it's unlikely we're going to see the same kind of program exist for people now. >> i'm a retiree from kodak, no unions, and we're treated the same way. there's nothing to protect retirees from losses of health care, so we know we're at risk

just at the whim of the company, and its poor performance, they could drop or cut health care costs, which it's done. there's no longer spouse coverage after 2018. any portion supported by the company will be in a group, but we'll have 100% of the costs, and secondly, the company's contribution is capped for the retiree themselves. we saw that already. you mentioned something important, and officially, it was supposed to cover retire rebenefits, incoming health care, but in the courts during various court fights, employers succeeded in making the argument that health coverage was not a vested benefit like pensions, and they are allowed to change it, and even if they promised it as many did in writing, they prevailed in court because they putt a little -- put a little sentence in tiny

print somewhere in the document saying we reserve the right to change our minds someday, so people had no idea this existed, and they didn't know that that was all that mattered was which little clause in a document they would not see, and they believed in the handouts the company gave them, believed the hr people who said you'd have this, not realizing how flimsy that promise was. >> i appreciate your companies, and even though it does raise my blood pressure listening to you, i was -- my group was included in the latter example there. the company promises for 170 years, and low and be hold, that little clause buried 300 pages in the tinyist print of the whole booklet is what the federal judge -- >> what company are you with? >> john deere. >> oh, yes, yeah.

>> so it -- and as far as organized labor, they have the larger voice speaking for them than any salarieded group except for salaried unions which are a rarity. >> they do. what's actually been interesting is seeing how beleaguer the they are as well whether it's our steel workers groups, any number of them in manufacturing are constantly fighting these like brush wars with the companies because companies use a variety of tactics that i mentioned in the book, ways to try to get around the contracts they've made with unions. the strongest example i saw was this mid western company that made tractors and so forth, and back in the early 1990s, they actually, you know, all got together to think hard about how they can get out of paying the benefits, so they came up with a variety of tactics. one was to exaggerate the costs and tell people it was really, really costly and maybe the

union would agree to give them some concessions. the other way was to create a unit and spin it off and have it go bankrupt, and then, of course, the retiree health care would be wiped out. the other was what they called a creeping take aways, and it works like this. you know, you make a little tiny cut one year, maybe raised dental by $5 a month, something like that. do a couple of those, and then a few years later cut everything or make a big cut, and if they fight back in court you say, look, there's a precedent here. you accepted the cuts we made, so that's, you know, tentively you've agreed to this, and that worked in a number of venue, and this particular company, it did all of these things, every single tactic over the years, and the retirees lost bit by bit, although because of the steel workers union, trying to

fight to protect it, many were able to hold on, but other companies, the retirees lost in many cases. >> that said commentary for the loyalty that people felt towards their companies, that the companies took advantage of it by doing it bit by bit, and then using it in the long run against the retiree group when they tried to fight it. >> well, also one of the tactics i failed to mention was drag out the litigation as long as possible because they'll give up or die, and, in fact, they do. in the book i mention the group of retirees with gen corp., the predecessor was general tire, and this group of retirees saw their retiree health care cut and say got together and hired a lawyer and sued, but it took so long. you know, they have to

that moral said, well, the law was not necessarily -- i mean, it made it very gray so that, again, the corporations have that leeway. also, so now that we're knowing what to look for and can become aware of it, we've also, you know, tried to face it through litigation. it's very difficult for the

average retiree to do thinking about all the things you're talking about so is your sequel planned on telling us how? [laughter] >> you're right. people are pretty helpless the only way they have any leverage at all is to come together with an issue. as i've seen your group do with the bankruptcy issue, the hooter situations that we've seen where companies stop contributing to their pension plans, airlines, for example, u.s. air, and the plans are less and less well funded, and then the company's only too thrilled in bankruptcy to dump it on the federal pension insurer. the problem with that of course, is when the plan is underfunded, not enough assets to pay out full benefits, and then people lose out especially people in the higher income ranges. pilots were devastating losing

up to 80% in some cases in their pension because of rather odd corks in the law, and also lost supplemental savings. there's pilots in the book who had a retirementment income of $8,000 a month now living on $95 a month. it's pretty preverse, and this temptation continues to exist with private equity firms buying companies. it's no different that the 80s, but a different way to do it. go in, buy a company, the plan is over funded, great, kill it or milk it, use the surplus, and then later you can kill it, or if it's really unhealthy, just stop criminal intenting it, let it sink, go to bankruptcy court and say, gosh, you know, judge, we can't possibly emerge from bankruptcy with this horrible liability, and judges are easily swayed by this argument, and tragically for retirees, they

are not first in line. you know, the creditors, other creditors are in front of them. they get paid before the retirees, so the pension gets dumped, the retirees are left with a fraction of their pension, and the shareholders are better off. the executives and creditors are better off, and just to get a flavor of that, last year the gao came out with a report in which they looked at ten of the largest company bankruptcies in the past five years, and they found that of these companies, which included airlines, poll -- polaroik r d and others. just in the few years not putting money in the plan, $350 million went out to the executives at the companies, so it would be probably a good idea if there was something that halted this process or made it tougher for companies to dump

the pensions. >> if you have other questions, catch her, and i'm sure -- >> i just wanted to ask that's it's very inflammatory what you are saying, and what do you think is the next step? are you hiring personal protection? [laughter] you know, are you expecting in terms in terms of company and retiree response? >> okay this last question, and then catch her during the hospitality. [laughter] >> none of this is a surprise to employers. i've been reporting on aspects of this over the past decade, and everything i reported on has been run by them and they all had opportunity to correct me or to challenge. there have been no corrections, and they can't challenge it, so the numbers are in the filings. it is the facts, so it's not like this will come as a big shock to them, so i think it's more of a shock to the general public ha has not followed this

issue, and they would be surprised to hear some of it. >> [inaudible] >> let's give ellen a hand. [applause] >> thank you. [applause] >> i don't discuss the films i'm making while i'm making them for all the obvious reasons. >> host: are you currently working on one? >> guest: maybe. i don't talk about it. they just appear when they appear, and i mean, i just -- it's just not in the best interest of the film to give a head's up. you know, with fickle, before i made sickon, i made a mistake of

saying i was making a film about the health care industry, and the health care industry went on high alert, and, in fact, the pharmaceutical companies went on real high alert, and even though the film was not about them, but the health insurance industry, the pharmaceutical companies spent hundreds of thousands of dollars preparing for me. i would get all internal memos sent to me from people who worked at different pharmaceutical companies saying, you know, we had an in-service today hiring a michael moore actor to do role-playing with us if you show up at the billing, this is how you handle him. there's a hotline. if i show up at the regional offices around the country, to call this number in new york, and they were just -- an executive at sigma health insurance wrote a great book last year, and he -- when he was the vice president of sigma, he talked about the millions of

dollars they spent hoping to discredit me, to attack me, to -- if necessary, figuratively, not literally, i hope, push me off a cliff, so they, so, you know, i learned the lesson there. not a good idea to give advance notice of what i'm working on. >> booktv interviewed him. use the search function on the upper left hand corner. this e-mail, as an iranian-american, i'm concerned you may be planning a trip to iran. the pro-government press has written more than once you've been invited to come do iran and you've accepted. they would consider that a coo if it happens. >> guest: i have been invited for many years. i think one of my films, it might have been "bowling for columnbine" won an award in iran

a number of years ago, and the prize was a beautiful persian rug they sent me. i'm not going to iran to the film festival. i don't know if it's really -- you know, the thing is with iran, i've been active in the last year or two, they've had a couple of filmmakers that have essentially been under house arrest, and i've been active with other filmmakers in this industry to convince the iranian government release them, leave them alone, and make their films. iran has the greatest filmmakers right now. they are really, really good if you have a chance to see a film. it's definitely a country who loves the movyings. we saw through the green movement here a few years ago, there's a huge sentiment in the country to be free of the

dictates of those who would, you know, want to run the country. you know, iran is a democracy on a certain level. i mean, they actually do have free elections, anyone can run, and there's been documentaries about this that are really, really incredible things. they're not -- you know, i try to avoid any sort of evil ax us of evil discussion because i know there's people in our government now that we had our way with iraq, want to move on to the next monster, and iran seems to be it, and there are certain forces that want us to now go to war or bomb iran or things like that, so i try to avoid any kind of -- i don't want to be associated with my government of anything again attacks anybody else on this planet ever again. leave it to the iranian people.

i think they'll stand up and get the country that they want, and i'm hopeful for that. >> host: michael moor's most recent book "here comes trouble: stories of my life." john from oregon, you're on the air. >> caller: i saw some of your films over the years, and i notice you try to edit things so people think something happened when it didn't, and i wanted to ask about "fahrenheit 9-11" because there's a section asking congressmen to send their kids to iraq, and one congressman or republican congressman said he had two nephews in afghanistan and you edited so he just doesn't respond, and it looks like he has no response and walks off, and that's not what happened. i wanted to know why you didn't include his actual response if you're supposed to be a document tearian. >> thank you for that question. first of all in that particular

scene, i asked him a very specific question, and i asked it of every congressmen i ran into, republican or democrat. would you send your son, your son or daughter, to iraq. he didn't answer the question. instead -- and a number of others said, oh, i've got a nephew or an uncle or a cousin, or i got somebody down the block that's in iraq right now, and it's like, no, i don't think you understand my question. would you send your son or your daughter, not your sister's son or daughter, your son or your daughter. he would not answer the question. they adopt want to answer that question because at that time when i made this film, fahrenheit, there was only, i think, one member of congress who actually had a son or daughter in iraq, and i just thought, well, that's interesting. there's 535 members of congress,

a majority of them voted for the war, but they don't seem to want to be willing to sacrifice somebody from their own families. send kids from the other families, those who live on the other side of the tracks, let them go do it. that's the point of that. he was just giving me a politician bodily dodge answer theying he had a relative over there. that's not the answer to the question. i still think it's a relative question. you know, if you're gong to vote to war, would you be willing to send your son or daughter there? i was over -- i had not seen the world war ii memorial until yesterday, and i went over there, and when you walk in on the very first stone as you walk into the memorial, it says world war ii memorial in big letters, and then under it it says george w. burr, and that shocked me for a second.

oh, he was president when it opened, but i don't see that on the washington monument who was president when it was opened or what's his name specifically doing on the world war ii? here's a guy who supported the vietnam war, but wouldn't go. here's -- i mean, at least with clinton, he dodged it too, but he was opposed to the war, so that's a consistent position. he didn't like the war, so he didn't want to go. i get that, okay, but bush was for the war back then, and he thought other people should go, not him. strings are pulled, and he's in the national guard, and then his name is on the very first stone as you enter the world war ii memorial? a war that my uncle died in, that 405,000 americans died in, and your name is on this? i'm just like, you know, it took me back to the caller's question about, you know, yes, they are

good at supporting war, getting us into wars, but if they had to die or their kid had to die, i don't know about that, but let somebody else's kid die. it's just abhorrent to me. >> host: there's a story about your father in his world war ii experience, but there's also a story about you in there taking a trial run to canada. >> guest: yes. my dad was in the first marine division of world war ii, and was in many of those island battles right on the beaches, horrific stuff, and i tell the one story in there about the christmas day of 1943 where he was in the battle of cape and new britain in the part of new beginny, and it was -- ginnie, and it was a friendly fire incident where he and his unit took a hill, and the american planes coming in

thought they were japanese on the hill, and they strafed the hill, and everybody in the unit was shot, everyone killed or wounded. the only one not shot was by dad. he told me, you know, growing up that every christmas day he remembers he's grateful for being alive, that somehow he survived that incident, and i tell the longer, you know, story of it in the book. my incident, of course, i was opposed to the vietnam war, and as i became near draft age, i'm thinking what will i do? i'm not going to kill vietnamese, and so i -- i and some buddies, we decided, we were like 16 or 17 years old, we were not going to go to jail. we were not go do service, some

other service, you could do that for the government. we decided to move to canada if we had to. we knew nothing about canada, and one day we took a car and a boat over to port huron michigan to do a dry run, see how to escape to canada if we had to. we got there and forgot the motor to the boat. we tried to take the car across the bridge thinking we'd be met with military and check points, and we or all scared, and the other guys were smoking a joint to relax. i didn't do drugs, so i was the designated driver, and so i tell the story about getting across the blue water bridge into canada in our great escape. the next year there was a draft lottery, and my number came up like number 273, so i was not drafted. >> host: richard, richmond,

virginia, thank you for waiting. you're on the air. >> caller: an absolute pleasure to be speaking with you this afternoon. how are you doing? >> guest: thank you, sir, i'm doing well. >> caller: i have a question to ask. i located my local american cancer society concerning an event they're going to be holding. i suffer from a brain injury and some other illnesses, and i'm -- year piece on sicko was beautiful. i loved it, beautiful. my question, sir, is how do aapproach or how would i 2k3w0 about a-- go about approaching the american cancer society concerning a study they did in 1974 with thc shrinking tumors

in mice and them not wanting to go that direction? >> i actually -- i do have some memory of something about that. i can't speak to it. i will say this, the thc, an active ingredient in marijuana. you know, our drug laws in this country, i mean, this is another whole show are just so out of whack, and things like that where, you know, medical marijuana, things that have been -- people try to use it to help people. i think years from now, historians will look back at this era and wonder why we did so many of the things that we do. you know, i would say that for you and for -- i get questions like this all the time actually from people who, you know, they've seen my movie and they need help because of a medical

problem or their hmo doesn't pay for them to see a specialist. remember, the insurance companies want to provide as little care as possible because that's how they make a profit, and so, you know, i say to you, sir, you know, definitely, get behind -- there's organizations that are trying to free up the studies, use these drugs. there's people who have been fighting the fda for a long time because they take so long when treatments that are used in europe and other places are not being used here. remember the fda, of course, is controlled essentially by the lobbyists, so the pharmaceutical companies and others who have a vested interest in making a profit. in sicko, i told the story -- i told the story in the last film actually in capitalism: a love story. jonah invented the polio vaccine, and people were

shockedded that he didn't want to copyright it, that he decided to just give it away for free to the american people, to the world, and he just -- he said he thought it would be immoral if he were to own that or make a profit off it. he said, you know what? i'm a doctor, a researcher, i get a great salary, live in a big house, what more do i need? disclosure this for the people -- i did this for the people. where is that sense? i mean, talk about patriotism, not just for america, but the world. we don't have that many these days, and i sure would like to see more of it. >> watch this and other programs on booktv.org. >> when i started selling the books, every person i worked with, i had a rejection letter from which was cool. you went to a meeting, they

said, oh, i love your stuff. then i said, what about this? >> ben questions the motivations, ethics, and morality of brilliant people. his account of mark and the creation of facebook was adapted from the screen as the social network, bringing down the house following a group of mit students who won millions in vegas, and the latest, sex on the moon, tracking the possible astronaut candidate as he steals a nasa safe filled with moon rocks. call, e-mail, or tweet ben on in-depth live today at noon eastern on c-span2. >> let me get right into it, and i'll begin by telling you a story. it sounds dramatic, sounds kind of purple prose, but it's this story, a story of a would-be suicide bomber who waits outside the home of a man who is leaving

for church. the assailant waits in the car ignored by security who is to protect the man, but the wife's come to the door with the child, and he doesn't want to kill the man in front of his story. the man in question, the target is the president elect of the united states. the only reason why that story is not implausible is because it happened. the suicide bomber was richard, 73 years old, a deep seeded hatred of the catholic church and keep disclosure family. his target was the kennedy family, he stalked them across the country, and he was parked december 11, 1960 holding a switch with seven words of dynamite, enough to level a small mountain. if not for his wife's aperps at

the door, john would have been killed, and there never would have been a president kennedy. the secret service chief at the time said we were seconds away from that disaster. then what? some of you remember or read it in history, but we're talking about a month after the lerks of the youngest legislated president, a transformational generation president from the oldest legislated to the youngest elected. how do you deal with that drama at a time when violence against public officials was undealt with. how would johnson with assumptions and a mind set different from kennedy's dealt with civil rights? or with the cuban missile crisis? that's one of the questions i've tried to answer in this book called "then everything changed." what this is is a trio of alternative histories that center on con seven rare

american -- con contemporary american politics. they are rooted in one notion that the smallest twist and turn of fate can produce radical consequences. they are written as fictional narratives, not essays, with dialogue and imagined seans, but they are all histories i tried to ground in plausibility based on the thoughts and beliefs of impulses of players has drawn from histories, oral histories, biographies, and several interviews with people who knew the player, and the common thread is that history doesn't turn on a dime, but on a plugged nickel. there are theories about history that focus on gee geography, climate, natural resources, theology, ideology, mass movements, great leaders, but the smallest random acts in fate is one that we've, human beings, like to see patterns in our lives and our history, sometimes

ignore. there's two examples that i don't deal with in the book. one is february 15th 1933, arrived later than planned to at the bay front park climbing up on a chair to see the speaker stand which meant that when he pulled out a weapon, a bystander noticed, jostled him, meaning he shot and killed the visiting mayor of chicago rather than his presumedded target president elect franklin roosevelt. that was a matter of a few minutes delay in his arrival. that five minutes may have met we would have had as president in the great depression, the speaker of the house, crusty texasian with little charm, less charisma, and the capacity to move a shaking nation that was minimal. up deed, there's a -- indeed, there's a book called

"man in the high castle" predicting a nazi victory in europe because there's no roosevelt to mobilize a nation. think about a british politician in new york city looking the wrong way while crossing the street. he was hit by a taxi, almost dies. slightly different injuries, slightly worse illness, and there's no churchill to lead britain in its time of need. i wrote a trio of history each based on random chance leading to huge ri cons consequential results rooted in a 34r5uzble scenario i could construct helped by the sometimes startling things i discovered that really did happen in matters great and small. >> you can watch this and other programs online at