Dallas mayor says pension mismanagement could be “criminal”
DALLAS (AP) — Dallas Mayor Mike Rawlings wants state investigators to determine whether previous administrators of the city’s ailing police and fire pension fund committed crimes that contributed to the fund’s financial crisis.
Rawlings said in a Facebook post Friday that he requested the investigation by the Texas Department of Public Safety and has been cooperating with the FBI. Rawlings did not specify what crimes may have been committed or name any specific administrators.
“As I have learned more in recent years and months about how the (pension fund) reached its current crisis, I have come to believe the conduct in question may rise to the level of criminal offenses,” he wrote.
DPS confirmed Friday that Texas Rangers will investigate.
The fund spent almost a decade basing its financial health on artificially inflated asset values from risky real estate investments made under a previous director, Richard Tettament, who resigned in 2014. The FBI earlier this year searched an investment firm that once advised the fund.
A spokesman for the pension system released an emailed statement on behalf of the board Friday.
“The Dallas Police and Fire Pension Board and staff have been working with and fully cooperating with the FBI for more than a year on its ongoing investigation of previous activities,” the statement read. “We remain focused on working with city and state officials to find long-term solutions that will safeguard previously earned and future retirement funds for Dallas first responders.”
The fund devalued its assets by about $1 billion after Tettament left to get an accurate picture of its financial standing. That devaluing dropped its percentage of funded liabilities to 45 percent, which pension experts said meant it would be insolvent in 15 years.
Proposed changes to benefits aimed at addressing the solvency sent members scrambling to withdraw deferred retirement funds from the plan. Members ended up pulling more than $500 million from the plan over a four-month period, moving up the expected insolvency date to about a decade.
The board voted to freeze large withdrawals earlier this month.
Both the city and the board are working on plan changes to present to the Legislature this session in hopes of finding a way to increase the fund’s solvency projections.