By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
We have come to a point of crisis in the matter of the sunburned sculpture garden and the pension fund. The clear appearance is that the mayor is injecting politics into the management of the Dallas Police and Fire Pension Fund. It's not exactly how the mayor of Detroit and his confederates wound up in the pen, but it's too close for comfort.
This ought to be simple. Politics. Pension fund. Never the twain should meet.
The mayor and some City Council members say the police and firefighters pension system needs to be audited. The city's firemen and police officers smell another agenda. They think the outside audit is a jawbone to bash the pension fund and help the sculpture garden.
(Note to out-of-towners who may have started reading this article by mistake. Forget it, Jake. It's Chinatown.)
People who live in Dallas and watch TV know by now what this is all about. The Nasher Sculpture Center, which opened in the arts district in 2003, was a gift to the city by a prominent Dallas family who had amassed one of the world's great collections of contemporary sculpture. Museum Tower, which opened across the street from the Nasher in 2012, is a glass-skinned 42-story condo building owned by the Dallas Police and Fire Pension Fund.
The Nasher argues that Museum Tower reflects way too much sunlight on it, burning up outdoor gardens and ruining natural lighting inside. But the Museum Tower and its glass skin fully comply with all Dallas ordinances and strictures. There is no rule the city can enforce to make Museum Tower do what the Nasher wants it to do.
In fact Museum Tower has offered to pay for a technical adjustment to the Nasher's louvered roof, a fix that would solve the indoor sunlight problem, according to Museum Tower. The Nasher has refused the offer, arguing instead that Museum Tower came along and caused the damn problem so Museum Tower should fix its own damn self.
There is a social and political subtext here. The people behind the Nasher include many of the city's most prominent and wealthy citizens, including people who have business ties to the mayor. Rusty Rose, for example, a strong friend and financial backer of the Nasher, was in the payday loan business with Rawlings until both cashed out in 2007. The list goes on.
The pension fund, on the other hand, is a grittier, more blue-collar presence in local politics. It has been active in funding several local high-profile real estate ventures. Its subscribers, some seven different police officer and firefighter associations, contribute money to political campaigns and play the local game, though at a more modest level than backers of the Nasher.
The first news organization in Dallas to raise serious questions about the financial underpinnings of the pension fund was the Dallas Observer, in a story by Anna Merlan published July 26, 2012. In it, Merlan revealed that the fund was investing heavily in luxury real estate including Museum Tower, for which the fund borrowed $160 million.
Fund officers told Merlan anybody who didn't like what they were doing would have to argue with their success. They said their record was consistently good compared with other similar funds. Merlan was able to raise substantive questions about the fund's operations without producing a smoking gun indictment. Whatever the story accomplished, it was utterly ignored by city officials and by The Dallas Morning News until the sunburned sculpture garden came along.
Now the mayor and the News are fluting their flutes and drumming their drums in a cry for an external audit of the fund, as if they know for sure that the fund is badly run. But just as we had to do with the sunburn issue, we need to pull back from this picture and acknowledge a certain factual structure where the fund's performance is concerned. It audits itself every year, pays for an external audit every three years, and all of those audits have concluded that the fund is well run.
So this is a bit ticklish, but I have to say it. It's wonderfully flattering that the city's only daily newspaper and the mayor have been so suddenly and powerfully converted to our cause here at the Observer, if indeed that is what's going on. They are all correct that the pension fund is ultimately a public obligation, and the public has every right to examine it and question its operation. The City Council has a right to demand certain amounts of disclosure.
But if the real agenda for going after the pension fund is to do for the Nasher politically what the Nasher cannot do for itself legally, then that is an intrusion of politics into the management of the fund. Last week I wrote a blog item drawing parallels between that possibility and what happened in Detroit, where local politicians got their hands on a pension fund and bled it for $84 million.
A reach? Not by much. Former Dallas City Council member Don Hill, now serving a very long stretch in the pen, was infamous for putting pressure on the pension fund to support the adventures of his friends — efforts in which we hope he was unsuccessful. But you see how it works in the world of good-for-the-goose. If the mayor, who is one vote on the council, can jawbone the pension fund to achieve his own political aims, then why can't another council member do the same?
If Rusty is pushing the Nasher agenda there's gonna be trouble at home. His wife, Deedie, was a primary catalist for the Museum Tower project in the first place. See the 1998 entry on the timeline here: http://museumtowertruth.com/timeline.php
The managers' investment in a luxury condo tower that never made much sense to begin with, is twice as big as originally planned, and has created a horrible public-relations mess that scares away buyers -- those are real management issues that I think the police and firefighters and City Hall should look into. If the glare from MT was the catalyst, that doesn't diminish the need for a review.
I agree the Nasher and Fund investing issues are separate and should not be linked. But this does not mean both issues should not be addressed. As for the Fund, it's actions raise at least three serious issues. First, Merlan's article raises disturbing questions about the Fund's investments. Second, the Fund seems to make every effort to deny these allegations but is kicking and screaming to avoid presenting the facts underlying its performance and fiscal health. Third, the Fund takes its denials to unheard of levels, namely threatening iat least one of its critics with expensive legal actions and attempting to encourage her employer to dismiss her from her employment. I hope the DO pursues all of these issues, especially the Fund's attacks on Christina Rees.