public records request

Florida Supreme Court Hears Jacksonville Pension Records Case

The Florida Supreme Court on Tuesday began hearing a case centered on public records requests and the Jacksonville public safety pension system.

The dispute is between the Jacksonville Police and Fire Pension Fund and a resident who says he was charged exorbitant fees to gain access to public pension records – records which are supposed to be available to the public at reasonable cost.

Background on the case, from the Florida Times-Union:

The case began in 2009 when [Jacksonville resident Curtis] Lee, a frequent critic of the pension fund, was told he would have to pay $326 before he could review documents that were sitting on a table at the pension fund office.

Lee was then told he would have to pay $280 in advance so that a staff member could watch over him while he reviewed records for up to eight hours. Pension fund managers then wanted Lee to pay $27.66 an hour for another employee to make copies of Lee’s public record’s request.

Lee sued, arguing that the pension fund was excessively charging him in an attempt to discourage him from seeing documents that are subject to the state’s Government in the Sunshine Law. Circuit Judge James Daniel agreed that Lee had been overcharged but declined to award him attorney fees, saying that the pension fund didn’t knowingly violate public records laws.

An appeals court then sided with Lee, and ordered the pension fund to reimburse Lee for his legal fees. The fund appealed the case to the state Supreme Court.

Photo credit: “Bluefl”. Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Bluefl.png#mediaviewer/File:Bluefl.png

New Jersey Pension Encounters Difficulty Exiting Investment With Firm At Which Mary Pat Christie Holds Top Job

It’s been nearly four years since New Jersey’s pension system terminated an investment with Angelo, Gordon & Co, an investment firm where Mary Pat Christie, wife of Gov. Chris Christie, is managing director.

But as the International Business Times reports, the pension system is still paying fees to the firm because certain portions of the investment are particularly illiquid – the pension system has yet to be able to exit them fully.

Some say the situation is a troubling conflict of interest. Others say it is emblematic of one of the criticisms of alternative investments: pension funds can’t exit whenever they like.

From the International Business Times:

When the New Jersey pension system terminated a $150 million investment in a fund called Angelo, Gordon & Co. in 2011, that did not close the books on the deal. In the three years since state officials ordered the withdrawal of that state money, New Jersey taxpayers have forked over hundreds of thousands of dollars in fees to the firm. As those fees kept flowing, Angelo Gordon made a prominent hire: Mary Pat Christie, wife of Gov. Chris Christie, who joined the company in 2012 as a managing director and now earns $475,000 annually, according to the governor’s most recent tax return.

The disclosure that New Jersey taxpayers have been paying substantial fees to a firm that employs the governor’s spouse — years after state officials said the investment was terminated — emerged in documents released by the Christie administration to International Business Times through a public records request.

[…]

New Jersey’s original $150 million investment in Angelo Gordon was initiated in 2006, under Gov. Jon Corzine, a Democrat. By October 2011, state records show, the investment — which was in a multi-strategy hedge fund called AG Garden Partners — had generated just a 5.5 percent return in six years. That month, New Jersey investment officials sent a letter telling the firm to “withdraw, as of December 31, 2011, one hundred percent of the [state’s] capital account.” Yet the state subsequently paid Angelo Gordon management fees of more than $255,000 in 2012, more than $132,000 in 2013 and more than $82,000 for the first three quarters of 2014.

[New Jersey Treasury Department] Spokesman Santarelli told IBTimes that while “New Jersey redeemed its interest in the AG fund and ended its investment [in 2011] we still have a remaining market value of $6.6 million invested related to illiquid investments, which have been winding down slowly over the last few years.”

New Jersey State Investment Council chairman Thomas Byrne gave his reaction to the IB Times:

“This is standard; we are not doing something different here that is outside the norms of the financial industry and the world of private partnerships,” he said.

“We are paying fees on whatever money is left in there, so it could be an asset that could be increasing in value,” Byrne said. “So why should the manager work for free if they are hamstrung in the short term but they have made an investment that makes sense? A contract is a contract and presumably both sides are working in good faith to get out of it, and a deal is a deal.”

Read the entire IB Times report here.

Photo by Timothy Appnel via Flickr CC License

Redacted Document Demonstrates Secrecy Surrounding Pension Funds and Private Equity Investments

The New York Times recently obtained a copy of a private equity limited partnership agreement from Carlyle Partners, and the document offers outsiders a rare peak into the opaque world of private equity investments.

[Document can be viewed at the bottom of this post, or by clicking here.]

The document is heavily, heavily redacted, but it’s important because it reveals just how few details are publicly available regarding the private equity investments of pension funds.

Many pension funds sign agreements just like this one – in fact, the list of pension funds that invest in Carlyle funds is long:

New York City Retirement Systems

CalPERS

CalSTRS

Illinois Teachers’ Retirement System

Florida State Board of Administration

Michigan Retirement Systems

Texas County & District Retirement System

New Mexico Public Employees Retirement System

Los Angeles County Employees’ Retirement Association

and many more.

Pension360 has previously covered how private equity firms encourage pension funds not to comply with FOIA or public records requests pertaining to private equity investments.

That sentiment is reflected in the Carlyle agreement, which pushes pension funds to resist public records requests if possible. From the New York Times:

Another blacked-out section in the Carlyle V agreement dictates how an investor, like a pension fund, also known as a limited partner, should respond to open-records requests about the fund. The clean version of the agreement strongly encourages fund investors to oppose such requests unless approved by the general partner.

Some pension funds have followed these instructions from private equity funds, even in states like Texas, which have sunshine laws that say “all government information is presumed to be available to the public.”

For an in-depth foray into the redacted elements of the agreement and its implications, head over to this Naked Capitalism post or the New York Times article.

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Photo by Truthout.org via Flickr CC License

Update: Naked Capitalism vs. CalPERS

The CalPERS Building in West Sacramento, California.

Last winter, Susan Webber, who runs the financial blog Naked Capitalism, filed a public records request with CalPERS seeking the fund’s private equity return data. According to Webber, CalPERS didn’t fulfill the request – and so Webber filed a lawsuit to get it.

After a few months of back-and-forth, CalPERS said last week it had given Webber the data she requested. But Webber, in a post over the weekend, says otherwise. From Naked Capitalism:

To update you on the state of play with CalPERS: since we received some financial data in February and March, CalPERS has engaged in foot-dragging. Even though CalPERS said in court filings that it stood ready to provide the data we sought, it has failed to do so. For instance, CalPERS’ Deputy Executive Officer for External Affairs, Robert Glazier, promised in mid April that he would send an important missing spreadsheet the following week. More than six months have passed and CalPERS has yet to provide it.

We have three types of data we are seeking: the spreadsheet mentioned (CalPERS has provided an 627 page image, but under California’s version of FOIA, they are required to provide machine-readable records in data form, but continue to fail to comply), commitment dates (CalPERS has consistently ignored this request) and detailed cash flows (of which CalPERS has only provided partial information; by our count, we are still 351 funds short). So of three requests, for two we have yet to receive any information, and for the third, we have received only partial information.

You can read more about the lawsuit and the FOIA results here. CalPERS’ response to Webber’s blogging can be read here.

Photo by Stephen Curtin