DALLAS - Arizona's police and firefighter pension fund has been ordered to submit documents as part of a criminal investigation into whether pension-trust managers inflated real-estate investment values to trigger staff bonuses, according to the Arizona Republic.
The Public Safety Personnel Retirement System board voted March 7 to hire a criminal defense attorney to handle the grand-jury investigation, the Republic said.
PSPRS officials refused to release a copy of a subpoena ordering the documents to the Republic, despite an assistant state attorney general's opinion that it is a public document that should be readily released.
Kutak Rock attorney Michael Sillyman refused requests from The Republic and the newspaper's attorney to release the document, the newspaper said.
Another Kutak Rock lawyer publicly supported the trust's decision to report higher real-estate values on its books, the newspaper reported. Those values are now under federal scrutiny.
The U.S. Attorney's Office effort to obtain the documents comes after the system's in-house counsel and three high-level investment analysts quit in protest last year because of concerns over the way real-estate values were being recorded.
The three analysts who quit last year told the Republic that they had nothing to do with the accounting problem. One analyst, Mark Selfridge, said he warned the system not to double-count land values before he resigned in mid-July.
With more than 53,000 members, the system manages a $7.7 billion trust to pay for the retirement benefits of public-safety officers, elected officials and correctional officers.
