An Arizona pension fund, already embroiled in controversy, voted yesterday to sign its Chief Investment Officer to a two-year contract extension and gave him a $50,000 retention bonus. That bonus is in addition to a $75,000 bonus the CIO was already scheduled to receive later this year, on top of his $268,000 annual salary.
The move is controversial because the fund—the Public Safety Personnel Retirement System (PSPRS)—is in the midst of a federal criminal investigation over actions that happened under the CIO’s watch.
The fund’s Chief Investment Officer is Ryan Parham.
In January, the FBI began investigating the fund over suspicions that investment staff were inflating the value of real estate investments to trigger performance bonuses.
A federal subpoena, reluctantly released by the fund this week after a court order, indicates the inflated assets had to do with investments made with Desert Troon Companies.
According to the Arizona Republic, Ryan Parham was directly involved with Desert Troon Companies investments.
The Arizona Department of Administration, which approves state contracts, has already voiced its apprehension about Parham’s contract, especially in light on illegal raises given earlier this year by the fund. From the Arizona Republic:
The Arizona Department of Administration, prior to Monday’s vote, formally raised concerns about the contract. However, the state does not have the power to reject it outright. All employment contracts, however, need formal review from ADOA.
Administration Department Director Brian McNeil in a July 31 letter to the trust said he was not giving any “formal consultation” on the contract until the board clarifies its intention to extend Parham’s contract.
The board by a 3-2 vote (with two members absent) on Jan. 15, authorized Hacking to negotiate a contract extension with Parham, but Hacking did not do so. Hacking was forced out on July 16.
The trust submitted Parham’s amended contract to the state two days later.
McNeil said in the letter his department has concerns about the “significant gap” of time between the board’s action and contract submittal. In addition, McNeil said, he’s concerned about “the circumstances surrounding the days/weeks prior” to receiving the contract.
Phoenix City Councilman Sal DiCiccio is calling for the Attorney General’s Office to investigate the raises given by PSPRS over recent months.
“This is insane. They have the worst financial record of any of the (state) funds, and they are giving him a bonus?” said DiCiccio.