Judicial Watch, a Washington watchdog group, has filed a lawsuit in state Superior Court in Arizona seeking a federal grand jury subpoena served on the Arizona Public Safety Personnel Retirement System as part of an investigation into potential fraud at the $7.7 billion pension fund, said group spokeswoman Jill Farrell.
The lawsuit, which was served to system officials on Monday, says the subpoena should be available to the public under the Arizona Public Records Law and seeks to compel the pension fund to produce the subpoena.
Last week, Michael Sillyman, an outside lawyer for the pension fund, refused a request by Pensions & Investments to review the subpoena, arguing it should not be considered a public document.
Pension fund spokeswoman Christa Severns said in an e-mail that the pension fund would have no comment on the Judicial Watch lawsuit.
Three former investment officers for the pension fund have all given interviews to the FBI detailing what they characterized as improper activity at the pension fund, sources say. The three resigned from the pension fund last year after they accused management of improperly inflating the value of a $340 million joint real estate portfolio run by real estate manager Desert Troon Cos.
James Hacking, system administrator for the pension fund, has insisted in interviews with P&I and in documents on the pension fund's website that the pension fund was trying to avoid major losses in its real estate portfolio and it was acting in accordance with generally accepted valuation methods.
The pension fund has since changed its valuation methods and decreased the portfolio's value by $24.7 million after the Arizona auditor general said it was overestimating the value of the portfolio.
