Big Pa. pension fund says it won’t require board to sign confidentiality oaths to hear key report

Board members of Pennsylvania’s $73 billion school pension fund won’t be required to sign nondisclosure agreements until they hear the long-awaited findings of an internal investigation into the mammoth plan on Monday.

The public school employee pension system still asks the board to sign the confidentiality pacts, but does not insist, the plan’s spokeswoman said. His statement clarified a previous controversial email from the chairman of the board, asking members to sign NDAs without saying they had the option to decline.

A law firm is due to unveil the results of its investigation during a closed session for the PSERS board of directors on Monday morning. But the board has yet to decide if, when and to what extent those findings will be made public after the meeting, which is closed to the public.

The firm, Womble Bond Dickinson, was hired 10 months ago to conduct a parallel investigation into matters that have also been investigated by federal prosecutors, the FBI and federal financial regulators. The investigations examined the fund’s adoption of an inflated number of investment profits as well as the PSERS’ purchase of real estate near its Harrisburg offices. The board then corrected the profit figure, forcing school staff to pay more to the pension fund, but said nothing for months about any issues.

Womble’s attorneys at one point said they could file their report on Nov. 18. the report have strong legal rights to defend their reputation. At one point, one of Womble’s top lawyers warned the board that transparency might not be “the right answer.”

Board member Katie Muth, a Democratic senator from Montgomery County, strongly criticized the call for NDAs and said she would not sign one. “I’m not signing because it’s unnecessary and redundant since the executive session is already confidential,” she said. His lawyer, Terry Mutchler, said it was “the right decision” not to demand them.

“I’m glad to hear they clarified that,” Mutchler said. “Half the battle is making the public believe what you’re saying is true and accurate.”

The agency had “indicated last week that the price of admission to attend an important closed session was to sign a nondisclosure agreement,” added Mutchler, former head of Pennsylvania’s Office of Open Records. . “We are very pleased that they have now declared that the NDA is not a requirement.”

Another board member, state treasurer Stacy Garrity, won’t sign any NDAs, according to Samantha Galvez, the treasurer’s spokeswoman.

Garrity and Muth asked the agency to make a quick public report of the investigation’s findings. The same goes for Governor Tom Wolf and the Democratic and Republican candidates who intend to succeed him.

Paula Knudsen Burke, an attorney with the National Journalists Committee for Press Freedom, said the report should be widely distributed and uncensored.

“There has to be a balance that weighs the public interest in disclosure against the reputational concerns of employees,” she said. “Given the massive sums of public dollars involved in PSERS operations, the scales weigh heavily in favor of transparency.”

Burke, who researched PSERS records on behalf of The Inquirer, added: When taxpayers help pay for a report from a “public institution…they have a right to see how their money is being spent.”

PSERS is funded by working educators, taxpayers and returns on investment. The fund sends $6 billion in pension checks to 250,000 retirees each year.

Although Womble has so far revealed little about his work on the board, sources say the company told the panel it found no evidence of wrongdoing on the part of the board. PSERS staff – points echoed by attorneys for executive director Glen Grell and former chief investment officer James H. Grossman Jr.

Grell and Grossman announced their retirement in November in a fund management shakeup.

“Based on my thorough review of the facts, I know that Mr. Grell did not engage in any criminal conduct,” his attorney, Marc S. Raspanti, wrote. “Furthermore, our client has not taken any action that would or could give rise to any civil liability.”

Of Grossman, his attorney, Matthew Haverstick, said: “As an employee of the organization, he did what he was told to do and did nothing wrong.

Haverstick could not be reached for comment on Wednesday. He welcomed the call for NDAs, saying they would protect staff reputations and prevent the board “from being unfairly criticized”.

In response to a question from The Inquirer, PSERS spokesperson Evelyn Williams wrote on Tuesday that “PSERS board members have been asked to sign an NDA but are not necessary sign to attend the January 31 meeting. The focus was on her.

Williams, in her statement, left the issue of public disclosure unresolved: she only wrote that, at the meeting, “the board will determine appropriate next steps.”

In a landmark 1996 decision, Simon v. Commonwealth of Pennsylvania, the Commonwealth Court prevented a state criminal commission from identifying people as being linked to gangsters without giving them the right to defend themselves in advance. Christopher Santa Maria, the chairman of the PSERS board, cited the decision in his initial email to members, asking them to sign confidentiality oaths.

As the decision noted, the Pennsylvania Constitution lists reputation as a fundamental right. It is one of the few state constitutions to do so.

Yet state officials have already found ways to make explosive investigative reports public while looking out for the interests of those identified in the reports.

In 2014, then-Attorney General Kathleen Kane released a lengthy report examining whether prosecutors had made missteps in the investigation of child molester Jerry Sandusky. The report includes written responses from 13 former prosecutors and others whose actions were explored as part of the investigation.

In 2018, a dozen priests among hundreds to be identified and criticized in a massive report by Attorney General Josh Shapiro into child abuse in six Catholic dioceses challenged the document before it was released.

The state Supreme Court backed the priests. In the end, Shapiro released an 884-page report that made headlines. However, many sections were blacked out, including the names of priests who questioned the report. It also included an additional 400 pages of rebuttals from those it criticized.

In an opinion, the High Court acknowledged that censorship could be “unsatisfactory for the public and for the victims”, but said fairness demanded redactions.

Dolores W. Simon