Dallas Police Pension Investigating Former Top Officials Over Sour Real Estate Investments

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The Dallas Police and Fire Pension System, with $3 billion in assets, is currently shouldering $8 billion in liabilities.

That’s due in part to a series of real estate investments that imploded to the tune of $96 million in losses in 2013 alone.

The officials who signed off on those investments have since been ousted. But the pension fund isn’t done with them, yet.

On Wednesday, the fund’s new executive director disclosed that she – and possibly the FBI – is investigating the former officials to “hold people civilly liable for malpractice”.

More from the Dallas Morning News:

Former top officials of the troubled Dallas Police and Fire Pension System are now being pursued by attorneys intent both on recovering lost funds and determining what went so wrong with the $3 billion fund.

On Wednesday the Dallas City Council listened as the shaky state of the pension fund was dissected. During that briefing the fund’s new executive director, Kelly Gottschalk, told the council the board has hired a law firm to investigate fund mismanagement dating back at least a decade.

Richard Tettamant was administrator during that period, leading a board that made risky investments — most involving real estate — and allowed the public safety workers’ deferred retirement program to spiral out of control. Both are among the reasons the fund is imperiled.

[Dallas City Councilman] Kingston said the board is hoping to “hold people civilly liable for malpractice. That is, if you go back through the independent audits, did they disclose everything? Should they have been more forceful about notifying the board our investments were out of whack?”

[…]

And the law firm is not the only one taking a peek at the fund’s books: The FBI is also conducting an inquiry, according to a report from WFAA. The bureau would not independently confirm anything.

“The old way of doing things is over,” said council member Scott Griggs, who’s also on the pension system board. “The decadence, the trips, deals being done without caution over a steak dinner and a bottle of wine, the cozy relationships with our consultants.”

The investigating law firm’s report is due in early 2016.

 

Photo by TaxRebate.org.uk

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