The resignation of a trustee of the Teamsters, Central States Southeast and Southwest Areas Pension Fund, a fund once infamous for corruption, is troubling.
R. Jerry Cook, the trustee, had been under investigation by a court-appointed special investigator for allegedly funneling more than $30,000 to his wife while he was a trustee of another pension fund, the Southern Conference of Teamsters Pension Fund in Atlanta.
Participants in the Central States fund, based in Rosemont, Ill., ought to be concerned. For more than a decade the Central States fund, forced by the courts, has tried to clean up its management and its image. But how well it has achieved that goal is hard to judge. It does not help Central States' image that Mr. Cook was most recently one of its trustees.
One apparently errant trustee should not implicate the entire pension fund. But the Central States fund, one of the biggest in the country with more than $12 billion in assets, has far-reaching responsibilities. It has some half-million participants and beneficiaries, who depend on it for retirement income, and some 10,000 employers throughout the country, which contributed close to $1 billion a year, according to the last available figures. The Central States fund also has a continuing obligation to the federal government which, through court action, still oversees it.
The fund, as it cleared out the corruption a decade ago under the guidance of the late George W. Lehr, adopted a policy of openness as integral to the effort to restore and maintain the fund's integrity, and boasted it would become a model for multiemployer funds. But since Mr. Lehr's death in 1988, the fund has turned increasingly inward and secretive again. How then can it be a model when it operates in the dark? And that secretiveness stirs concern when one of the trustees steps down under a cloud.
For these reasons, it is incumbent on the Central States to be more open to the public about the management of the fund. Its actions are a matter for public concern. Someone has to watch the watchdogs, so to speak.
Unfortunately, the executives at the Central States, and its named fiduciary, Morgan Stanley & Co., have behaved in just the opposite manner.
So what are participants to think? Until concerns are dispelled, until the fund is more open, they should worry.