Frank J. Gaffney Jr., CSP president, said Mr. Auchterlonie originated the idea of the report and began collecting data from the public pension funds on his own. In the course of collecting the information, Mr. Auchterlonie approached the center about conducting research to determine if the public pension funds invested in companies doing business in countries linked to terrorism. He provided the center with information he gathered up to that point; then on behalf of the center, Mr. Gaffney said Mr. Auchterlonie continued to gather the data from the pension funds.
Mr. Auchterlonie, however, said he never identified his connection with the center.
"Perhaps one could characterize it as misleading," he said.
Mr. Gaffney defended Mr. Auchterlonie's action in the way he gathered the information, because the information should be public and because Mr. Auchterlonie has a right to identify himself as a graduate student because he considered his activity independent study.
"The center benefited from the research this graduate study did," Mr. Gaffney said.
Mr. Auchterlonie told P&I he is a volunteer at the center and doesn't get paid. He clearly denied he works for or is paid by the center.
"I do not" work at the center, he said. "I volunteer."
Mr. Gaffney, however, said Mr. Auchterlonie is a paid part-time employee of the center. When told Mr. Auchterlonie characterized himself as a non-paid volunteer, Mr. Gaffney then qualified his own statement to say the center engaged Mr. Auchterlonie only a week before, the week of Aug. 23, to work on a part-time basis, and he has not been paid yet.
"There's nothing devious going on here," Mr. Gaffney said. "The guy has not been paid yet."
Mr. Auchterlonie said he had no specific purpose in mind when he began gathering the information from the pension funds, including seeking data from public pension systems in the 50 states, the District of Columbia, and cities such as New York, Los Angeles and Chicago, as well as the Federal Retirement Thrift Investment Board and two other federal plans.
The project was based on his academic interest in international finance, Mr. Auchterlonie said, although he acknowledged he is not pursuing any of the research in conjunction with a class or professor.
"From my point of view, he didn't need to be working with a professor," Mr. Gaffney said.
He said he just began as a graduate student at Johns Hopkins University, Baltimore. He said, however, he was "enrolled" as a graduate student when he collected the data, although he hadn't begun the program. His enrollment could not be immediately verified.
Public pension funds sometimes charge copying and related administrative fees to provide records, such as extensive listing of securities holdings. But often, in the case of student researchers, they will waive the fees.
Asked if the center should pay appropriate fees for the information Mr. Auchterlonie gathered for the report, Mr. Gaffney said, "I would be happy to hear what their standard charge for providing information is and would be willing to entertain on what basis they should charge for it."
"The relationships in this matter seem more than coincidental," Gary W. Findlay, executive director of the $5.9 billion Missouri State Employees' Retirement System, Jefferson City, said in a statement.
"First we received a request for information from someone who maintains that he is ‘a graduate student at Johns Hopkins University studying socially responsible state and local pension investing.' We provide the information requested and excerpts from it are later presented in a report with a highly prejudicial title prepared by an alleged think tank," Mr. Findlay said.
"The think tank shares a mailing address with an organization (Conflict Securities Advisory Group) that has been desperately attempting to market a product they maintain is useful in assessing terrorism risk in non-U.S. investments. Just before the CSP report is issued, a U.S. senator sends letters to the directors of the funds included in the CSP report, reminding them of the need to avoid investing in companies that may be supporting terrorism.
"I'll leave it to others to draw their own conclusions from this set of facts, but it just seems a bit too cozy to me. At the end of the day, a lot of what we do hinges on trust. I'm personally hard-pressed to trust people who employ nefarious means to collect data and who resort to political influence-peddling in an attempt to sell products.
"When I was contacted by the CSAG about possibly subscribing to their service, they told me that they ‘are not arsonists who are in the fire extinguisher business' (their words, not mine). The evidence available causes me to question that claim."
Mr. Gaffney said CSP and CSAG share the same office suite, saying CSP sublets the space to CSAG. He said CSAG's "principals have been colleagues and associates (of leaders of CSP) for some time." But he said CSP is independent of CSAG.
Mr. Gaffney said CSP paid CSAG for the pension fund evaluations.
CSAG officials didn't return phone calls.