New Orleans Mayor Files Lawsuit Against Pension Trustees Over Alleged Incompetence, Malfeasance

New Orleans Mayor Mitch Landrieu filed a lawsuit on Monday against the trustees of the city’s Fire Fighter Pension and Relief Fund.

The lawsuit accuses trustees of making a series of bad financial decisions and investments that have led the system to become underfunded; the lawsuit alleges that some of those decisions violated their fiduciary responsibility to system members.

From NOLA:

The 17-page lawsuit, filed Monday (April 27) afternoon in Orleans Civil District Court, claims members of the Fire Fighter Pension and Relief Fund, past and present, showed a combination of incompetence and malfeasance that put the pension system on the road toward an early grave, a violation of their legal responsibility to look out for its health.

The board members are accused of:

* Misinterpreting state law to juice benefits and allow earlier retirements;

* Granting cost of living increases when it shouldn’t have;

* Investing in dubious financial ventures;

* Overspending on expenses and engaging in financial transactions with conflicts of interest.

* Failing to implement basic financial policies that could have prevented many of the other issues.

Louis Robein, attorney for the firefighters’ union and the Pension Board dismissed the allegations as rehashed old news. The bad investments and overspending referenced in the suit happened years ago and have been well documented in the media. The board members involved were ousted in 2013.

As for the COLAs and the supposed benefit inflation, those are simply allegations at this point, Robein said. The filing is merely a ploy by Landrieu meant to exert leverage over the firefighters, who are holding his feet to the fire in other suits, he said.

This isn’t the first legal battle between the city and its firefighters.

Over the past few years, the city had not made its full required contributions to the pension fund; but last year, a judge ruled that New Orleans had to pay the fund $100 million in previously unpaid pension contributions.

The city refused to pay that figure, and eventually agreed to re-pay about $30 million in missed payments. So far, only $4 million has actually been paid to the pension fund.