Pension Fund

  • 12 Jun 2007 at 1:59 PM
  • Amaranth

Pension Fund Chief Denies Impeding Grand Jury

grandjury.jpgThe head of the San Diego Country pension fund accused of impeding a civil grand jury investigation denied that fund officials set out to interfere with the investigation. He admitted, however, that witnesses were told not to discuss privileged matters related to a lawsuit the pension fund has filed against the failed hedge fund Amaranth Advisors. The grand jury’s report found that the San Diego County Employee Retirement Association has attempted to “influence [witness] responses in almost every area of our investigation.” The grand jury connected this to the lawsuit against Amaranth for losses suffered when the hedge fund collapsed.
“In no way did we attempt to impede their process,” said Brian White, the chief executive of the pension fund.
The civil grand jury in San Diego is made up of 19-members, mostly retirees. It is not connected to the criminal grand jury process. Last week the grand jury filed a report on the pension fund. The report included a finding that the pension fund had impeded the grand jury’s investigation by “pre-screening” witnesses to instruct them about what they should and should not tell the grand jury. DealBreaker reported these findings yesterday.
“We are surprised at their finding,” White said. “We provided them with all the witnesses and documents they requested, without requiring the grand jury to go through the subpoena process.”
White noted that experts were provided to the grand jury at the expense of the pension fund. He said that witness interviews often ran over far past the allotted time, lasting two to three hours.
“We did tell them that the Amaranth litigation was not something we could discuss with them. And we told witnesses not to discuss matters they had heard in closed meetings related to the litigation,” White said.
California open-meeting laws allows the pension fund to hold closed meetings when the subject matter discussed will be on-going litigation, according to White.
“One of our concerns was that something privileged would end up in the grand jury report that may have been used by Amaranth in their defense,” White said.
Earlier: San Diego Pension Fund Impeded Grand Jury Investigation, Report Finds [6.11.07]

SANDIEGOAMARANTHLAWSUITMAOUNIS.jpgA San Diego County pension fund tampered with witnesses in a grand jury investigation into the fund’s operations, the county civil grand jury said in a report released last week. The grand jury found that the pension fund had “impeded” the investigation by “pre-screening” witnesses, perhaps out of concerns arising from its litigation against the hedge fund Amaranth Advisors LLC. The pension fund is suing Amaranth over losses it suffered when Amaranth collapsed after the market in natural gas futures turned against its positions last year.
The grand jury’s report states that the San Diego County Employees Retirement Association, SDERCA, sought to influence witnesses “in almost every area” of the investigation. The civil grand jury in San Diego is made up of 19 volunteers. It is not related to the criminal grand-jury system.
“During the course of our interviews, it became apparent that SDCERCA was pre-screening our witnesses and suggesting what information could or could not be said,” the grand jury report states. The report goes on to detail one instance where an expert witness declined to respond to questions despite the fact that the information was disclosed in public record.
“The efforts of the Grand Jury were, at times, impeded by SDCERA,” the report states as an official finding.
The grand jury’s findings of interference with the investigation contrast with the pension fund’s public statements about the investigation. The press section of the pension fund’s website calls it a “positive report” but makes no mention of the finding that it impeded the investigation. No other media sources seem to have picked up on this finding.
Last Thursday, the pension fund’s chief executive, Brian White, denied that the grand jury’s findings had anything to do with the lawsuit. “The report did not have any findings in relation to Amaranth or our investments in Amaranth,” White said, according to Bloomberg. White did not return calls from DealBreaker seeking comment.
[More on pension fund grand jury chicanery after the jump]

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