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Pension Fund Chief Denies Impeding Grand Jury

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The 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]