A federal grand jury investigating the $7.9 billion Arizona Public Safety Personnel Retirement System sought several hundred files related to PSPRS' investments with its largest real estate manager, Desert Troon Cos., and confidential letters the pension fund's Chief Investment Officer Ryan Parham wrote to PSPRS board members, the subpoena shows.
The PSPRS board voted unanimously to release the subpoena on Monday after a Maricopa County Superior Court judge ruled last week that the subpoena was a public document. Judicial Watch, a Washington advocacy group, sued PSPRS in March after the Phoenix-based pension fund refused to release the document.
Judicial Watch provided the document to Pensions &Investments on Tuesday morning.
The vote by the board to release the document came on the same day the board voted 4-2 to give Mr. Parham a two-year contract extension as the pension fund's CIO.
Mr. Parham, who makes $268,000 a year and is the highest paid state employee in Arizona, will not be getting a raise. But he will receive two $25,000 retention bonuses over the next two years.
Mr. Parham was a key proponent of a plan that increased the value of PSPRS' portfolio with Desert Troon by calculating the investments at its value based on recovery of the Arizona real estate market, instead of its market value.
The portfolio had declined in value after the collapse of the Arizona real estate market during the recession.
Three of the pension fund's investment officers and the chief counsel for its investment office all resigned last year over the valuation dispute, maintaining it was improper for the retirement system to calculate the Desert Troon investments at potential future value instead of a market-based appraisal.
The documents requested by the federal grand jury include valuation records regarding appraisal of the Desert Troon portfolio and confidential written investment reports Mr. Parham sent to the PSPRS board between 2010 and 2013. Sources say those reports included Mr. Parham's comments on the performance and value of the Desert Troon portfolio.
James Hacking, the pension fund's former administrator, has insisted that retirement system officials acted properly and in the best interests of PSPRS regarding the valuation of the Desert Troon portfolio.
Mr. Hacking was terminated last month over another controversy involving his approval of pay raises for some members of the retirement system's investment staff without the required approval of the Arizona State Department of Administration.
The documents named in the federal grand jury subpoena are a subset of documents taken from PSPRS by Anton Orlich, one of the investment staffers who resigned over the controversy involving Desert Troon.
The pension fund had filed a lawsuit in Maricopa County Superior Court last October demanding the return of the documents that Mr. Orlich said in legal filings he took to protect them from being destroyed.
Mr. Orlich received a federal grand jury subpoena earlier this year for the documents. But he turned over the documents to the Maricopa County Superior Court for safekeeping as part of an agreement with PSPRS until the legal dispute was settled.
The federal grand jury then subpoenaed PSPRS for the documents related to Desert Troon.
