Appearances matter to Kevyn Orr, emergency manager of Detroit. So does prudent use of city dollars.
That's why he's "very concerned" about Honolulu conference attendance by four board members from two public pensions funds, spokesman Bill Nowling says. Attorneys are looking into whether Orr can dismiss the trustees whose six-day Hawaiian trip began Friday, Joe Guillen reports atop the Free Press' front page.
Though the amount involved is relatively insignificant -- $22,000 -- the symbolism and timing create an issue the governor's appointee can't ignore.
The six-day event for public pension trustees is at the Hilton Hawaiian Village Waikiki Beach Resort.Orr already had targeted the funds for close scrutiny before learning of the trustees’ travel plans. . . .
"This trip shows a monumental lack of judgment, and it raises serious questions about how the board's exercising its fiduciary responsibility to mange the funds prudently," Nowling said in a statement.
"We are researching all of the emergency manager's legal options regarding the boards, including the removal of individual members." . . .
The taxpayer-backed pension funds are covering their $22,000 travel tab at a time when the funds are facing claims of mismanagement and said to be at least $600 million underfunded.
"It's mind-boggling that someone would think this is a good idea, given the city’s dire financial situation," Nowling tells blogger Steve Neavling of Motor City Muckraker. "If the emergency manager deems it necessary to remove the boards and act solely as the pension trustee, he will."
Here's who is at the Hilton Hawaiian Village Waikiki Beach Resort for the National Conference on Public Employee Retirement Systems, which starts Saturday:
- John Riehl and Cedric Cook of the city's General Retirement System Board. They're elected by employees.
- Angela James and Edsel Jenkins, appointed by Mayor Dave Bing to the Police and Fire Retirement System Board.
Jenkins, a deputy fire commissioner, flew first-class, according to Guillen.
In a Friday article that broke news of the trip, the Free Press reporter wrote that participants say the conference provides education they need to manage complex investments.
But other major public pension systems, including the Los Angeles Fire and Police Pensions, avoided sending their officials to Hawaii because of concerns the exotic locale sends the wrong message at a time when pensions nationwide are contemplating or implementing reduced benefits to cope with rising retirement costs and shaky investment returns."
Guillen noted that Ohio pension officials who had intended to go to Honolulu dropped their plans in late April as criticism mounted. He quotes a Republican state representative as saying:
“There are plenty of other opportunities — both actually attending a meeting close to home and webinars.”
