Are Chicago Teachers Pension Fund Investment Committee Meetings no longer open to the public?
Former Teacher Trustee Tina Padilla, who retired last year and served as the Investment Committee Chair for ten years, wrote a letter to the CTPF Director Carlton Lenoir lambasting the decision to go into Executive Session that was closed to the public during the Feb. 27, 2024 Investment Committee Meeting.
“I have a concern regarding the closed-door meetings between trustees, money managers, and our consultants,” she wrote. “I believe that such meetings should not be held behind closed doors, and I am curious to know why this is happening.”
Padilla sent a Freedom of Information Request that was denied because they cited a clause in the Open Meetings Act.
“This denial and the upcoming Investment Committee Meeting raise more questions and concerns,” she wrote in an email to CTPF. “For example, why are investment committee materials being discussed in the executive session? Is it because all board meeting recordings can now be accessed on the CTPF website? Or is it because our hard-earned retirement savings will possibly be invested with Public Equity managers who have not acted in the best interest of Defined Benefit plans or teachers?”
Former CTPF Teacher Trustee Phil Weiss said he could not recall any time during his tenure as the chair of the Investment Committee discussing investment manager business behind closed doors. However, he added that he was not alarmed about this latest decision because the Fund needs to discuss certain fund business behind closed doors when there are legal problems such as criminal activites that could result in lawsuits.
“I don’t recall that happening when I was there,” Weiss said. “But it can be appropriate when discussing matters of litigation or sensitive matters. It’s unusual, but I’m not alarmed. There’s need for discretion on these matters.”
Watchdog groups have warned that public pension funds are doing more business behind closed doors even though they are public entities. Former SEC Attorney Ted Siedle who has audited many public pensions says there is little to no transparency concerning contracts with private equity companies even though such deals are highly problematic because of high fees and hidden costs.
What are they hiding?
Teacher Trustee and CTPF VP Jacquelyne Price Ward replaced Weiss as the new Investment Chair after last November’s pension election.
Tina Padilla heads the Pension Advoacy Group (PAG). She has been closely following the Chicago Teachers Pension Fund activities and she asks questions and makes presentations at CTPF monthly board meetings. She said it is very important for teachers, retirees and the public to speak at the public meetings and let the Fund know that we are watching where the pension money is being invested.
“We’re a watchdog group,” she said. “If we go behind closed doors we can’t fact check the managers and that’s our retirement savings. The due deligence piece is always done in open session and part of our fiduciary duties.”
Padilla said at investment committee meetings the trustees discuss the managers and how well they are managing the teachers’ retirment money. The managers need to make presentations and trustees can ask questions.
“When there’s a lot of money, there’s a lot of predators,” Padilla said.
The Feb. 27 Investment Committee Meeting started out with public participation. The Hospitality Workers Union, United Here Local 11 from Southern California, asked the Board to send a letter in support of their labor demands. The second speaker was Tina Padilla representing the Pension Advocacy Group. She said their concern is that not enough is being done to promote Defined Benefits for all members.
She wrote on the PAG blog that the Trustees then moved into executive session for over one and a half hours.
“The purpose of going into executive session was stated to be, Section 2(c)(7) of the Open Meetings Act. (7) The sale or purchase of securities, investments, or investment contracts. This exception shall not apply to the investment of assets or income of funds deposited into the Illinois Prepaid Tuition Trust Fund.”
“This is not applicable,” Padilla wrote. “The Pension Advocacy Group needs to see evidence that investment managers are engaged in a fair and open process for the coveted position of managing the hard-earned retirement money of the members of CTPF. They want to hear questions from trustees, consultants, and investment staff, allow the members and watchdog groups (to) analyze the data presented and conclude whether members are being served by the best of the best teams.”
The next CTPF Board Meeting is Thursday, March 21, 2024.
"Former CTPF Teacher Trustee Phil Weiss said he could not recall any time during his tenure as the chair of the Investment Committee discussing investment manager business behind closed doors. However, he added that he was not alarmed about this latest decision because the Fund needs to discuss certain fund business behind closed doors when there are legal problems such as criminal activites that could result in lawsuits." Criminal activities that could result in lawsuit? What exactly are they hiding?
Public pensions are supposed (required by law) to be the most transparent of all! Yet are most adept at cultivating secrecy.