Trustees spending fire and police pension funds on expensive travel
SAN ANTONIO - Taxpayers pay millions each year to make sure firefighters and police officers have a secure retirement. But an investigation by News 4 Trouble Shooter Jaie Avila reveals trustees in charge of the fund spending some of that on expensive travel while being wined and dined by investment firms.
Firefighters and police officers contribute toward their pensions out of their paychecks. But the city says YOU pay for the majority of it: $77 million a year. So we all have a lot to lose if things go wrong.
Rick Garcia retired in April after almost 33 years of fighting fires. Now he hopes to live on the pension he paid into all those years, and maybe travel a bit.
“For firefighters and police it's our social security. We don't pay into social security, so that is our income when we retire," Garcia said.
However, records obtained by the News 4 Trouble Shooters show the trustees in charge of the pension fund have already been traveling with some of that money. Spending more than $193,000 since 2015. There were dozens of trips to places like Las Vegas, New Orleans and China for investment conferences.
Of the nine pension fund trustees, the ones who traveled the most still work for the police and fire departments. When they travel the city says it often has to pay their salaries AND the salaries of people to replace them while they're gone.
Avila traveled to Key West, Florida in January to see what goes on at those investment conferences.
That trip was taken by Pension Board Chairman and Active Firefighter J.T. Trevino. Along with Trustee and San Antonio Police Department Detective James Foster. The conference ended by early afternoon each day, leaving time for drinks at a bar by the harbor.
Later that night our undercover camera spotted the group, joined by several other people, having dinner at a popular gourmet restaurant. Afterward we followed them on a night of bar hopping along Key West's famous Duval Street.
None of the pension board's most frequent flyers would agree to talk with us. But a spokesman for the fund defended the travel saying the conferences provide valuable education about the complex world of investments.
“To make good investments you kind of have to go above and beyond. Part of their travel is to conferences where they get that education about these different kinds of asset classes," said Joe Gimenez, spokesman for the San Antonio Fire and Police Pension Fund.
We also shot video of a dinner after a conference here in San Antonio last October. The dinner was hosted by the Philadelphia investment firm Cooke & Bieler, which was bidding for a contract to manage $75 million from the pension fund.
Several trustees attended, including Vice Chairman and Police Sgt. Jim Smith, Detective James Foster and retired Assistant Chief of Police Harry Griffin. Griffin could be seen sitting right next to the Cooke & Bieler executive hosting the dinner, Thad Fletcher.
Records we obtained show one month after that dinner, Cooke & Bieler was added to the list of finalists for the contract, at the specific request of trustees. Two months after that, the board voted to award the firm the $75-million.
Cooke & Bieler did not respond to repeated requests for comment. However, Avila spoke to Trustee Harry Griffin at a recent board meeting.
“Why would you go to a dinner that is hosted by a firm that is in the running for investment money from the fund?" Avila asked.
“Attending a dinner doesn't influence my decision whether I'm going to hire a manager or not,” Griffin responded.
“I understand there's a potential issue with the appearance of that," he added.
Griffin said while he does sit on the committee that recommended Cooke & Bieler, he was absent the day of the final vote.
A spokesman said the October dinner was not a violation of the Pension Fund's Standards of Conduct, which say: "Communications between trustees and persons seeking to influence the decisions of the board shall be minimized to the extent reasonably possible."
Last year we found out what can happen if a pension fund is influenced into bad decisions. The Dallas Police and Fire Pension went broke. Both retirees and taxpayers paid a heavy price. The legislature had to bail it out by increasing the amount retirees and the city have to pay in to the pension.
But pension officials in San Antonio said that won't happen here because they are financially sound with a successful track record of investing.
“The proof is in the pudding. When the pension fund earns $370-million like it did last year, I think the taxpayers should look at this and say 'it's great,'" said spokesman Joe Gimenez.
The City of San Antonio doesn't think all the paid travel by trustees is so great. City Manager Sheryl Sculley said the city was unaware the trustees were traveling so much. When City Hall saw what we uncovered it took immediate action to clamp down on travel.
In his follow-up report Friday night Avila will have an interview with Sculley getting her reaction to the investigation and what the city is doing.