DALLAS — Former Houston Mayor Bill White, who is challenging Texas Gov. Rick Perry for the state’s top post, said Tuesday that appointees to the Teachers Retirement System of Texas improperly funneled investments toward the incumbent’s political contributors.
White, a Democrat, said Perry appointees have “steered hundreds of millions of teacher dollars — and millions in fees — to firms run by Perry donors.” He said system fund managers “let political and personal agendas run roughshod over the recommendations of professional staff and financial analysts.”
In response to White’s charges, the Teachers Retirement System released the findings from a 2009 investigation that found no improprieties by the trustees. The Republican Perry has appointed every trustee since taking over as governor in December 2000.
White cited an internal memo from Michael Green, director of the retirement system’s private market team, to the system’s director.
In the message, Green said Britt Harris, the system’s chief investment officer, pressured analysts to change recommendations against some investments. He said Harris was “manipulated by board members and investment managers to the detriment” of the system beneficiaries.
“The damage to our reputational equity and creation of a culture where board members feel empowered to finance their personal agendas with teacher/retiree/taxpayer $$$ don’t seem to concern him,” Green said in an e-mail attached to the memo. “Is it my imagination or does there seem to be a renewed urgency … to close a bundle of questionable transactions?”
Perry spokeswoman Katherine Cesinger said White was looking for wrongdoing where none can be found. She said Green’s complaints were investigated by an independent legal consultant, who found no improprieties.
“That review was then turned over to the State Auditor’s Office, as would be standard in such matters, and they have taken no further action,” Cesinger said.
In one case, Green said, staff and outside analysts recommended against an investment in an energy fund founded by a businessman who has given Perry a total of $300,000 in campaign contributions. A second analysis was performed by another consultant, which Green said was “highly unusual,” and the rejection was reversed.
White called the memo “explosive” and “a smoking gun.” He called on Perry to release all relevant documents and
“Perry and his people have milked our teachers’ retirement for campaign cash,” White said. “Perry’s used state government as a political machine. Our teachers’ retirement fund should not be for sale to help a political campaign.”
State auditor John Keel said he recommended closing the issue after reviewing the investigative report on Green’s allegations. In the report completed in August 2009, investigators said they found “no definitive evidence that any trustee improperly influenced any investment decision.”
The teacher trust fund dropped to a low of $67 billion in March 2009 but now totals $102.4 billion.