The Dallas Police & Fire Pension Fund stumbled into a PR disaster when it went all in on the allegedly-art destroying Museum Tower, but that was far from its only foray into real estate. At times, as Anna reported last year, as much of a third of the fund's $3 billion portfolio has been tied up in luxury subdivisions, apartments, retail centers, and glittering residential towers.
The investments carry a high level of risk, but they have another side effect illustrated in documents released last week to the Morning News and WFAA: giving pension officials and board members a handy excuse to travel the globe.
The Morning News puts the travel expenses for trips taken by officials and board members at about $1 million over the past four years. The preferred destination seems to be Napa Valley -- there have been 18 trips there since 2007 -- but itineraries have also included jaunts to Hawaii, Italy, Scotland, Abu Dhabi and elsewhere.
Pension officials say they're merely doing their due diligence as stewards of the retirement savings of the city's active and retired police and firefighters. Firefighter Rick Salinas, deputy vice chairman of the pension fund's 12 member board, posted a statement on the fund's website yesterday, preemptively defending the travel costs.
Salinas writes that officials have been swamped by an "avalanche" of open records requests that staffers are "working tirelessly" to respond to. After all, "Sunlight is the best disinfectant," he quotes former Supreme Court Justice William Douglas as saying before launching into his defense.
"The Pension System investment portfolio is very complex and global by design; it does not put all of its eggs in one basket," Salinas writes. "The Pension System's investments are spread around the globe for the purpose of avoiding being corralled into any asset class or investment that would negatively affect the overall performance of the fund. Reflecting our core value of accountability, the Pension System Staff and Trustees travel only when necessary to perform due diligence."
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True enough. Pension officials and the 12-member board are indeed charged with overseeing the fund's investments, and one can't realistically keep tabs on a housing development in Hawaii sitting in the fund's office on Harry Hines.
Then again, it's awfully convenient that the most scrutinized parts of the fund's portfolio happen to be located in idyllic vacation destinations.
"We need to ask the tough questions," Councilman Scott Griggs, who sits on the pension's board, told WFAA. "Should we be involved in apartments in Arlington, Texas, or luxury properties in Napa Valley and Hawaii? What serves the pension fund best?"
He predicted that board members are coming to the realization that the luxury investments might not be necessary and could soon reduce its luxury real estate holdings. And, as the Morning News reports, pension officials are already downgrading their travel accommodations. For a trip to Napa last month, he stayed at a Holiday Inn Express.