Ethics complaints against San Francisco City & County Employees' Retirement System board member Wendy Paskin-Jordan could force her off the board.
The city Board of Supervisors, using a rarely used provision challenging a mayor's appointments, will hold a special hearing on Jan. 7, and then decide whether to rescind her reappointment to the retirement board by Mayor Ed Lee.
Supervisors received two complaints against Ms. Paskin-Jordan, who is the wife of former San Francisco Mayor Frank Jordan and runs her own money management firm, Paskin Capital Advisors in San Francisco, records show.
The complaints were filed anonymously.
The first complaint concerns her investment with Grantham Mayo van Otterloo & Co.
The $19.9 billion pension fund has a $388 million investment with the company. Ms. Paskin-Jordan, in a disclosure form, reported she had made a personal investment between $100,000 and $1 million in GMO in August 2011. The ethics complaint says that is below the company's minimum investment threshold of $10 million, alleging special treatment for Ms. Paskin-Jordan, who was on the retirement board at the time.
City rules also prohibit SFERS board members from investing with private equity, limited partnerships and non-publicly traded mutual funds that are doing business with the system.
The second ethics complaint says Ms. Paskin-Jordan received favorable fees for her clients invested with Northern Trust Asset Management between September 2011 and November 2013. Northern Trust is the pension fund's custodian.
It also alleges without going into detail that her clients are receiving “special favors” from several dozen money managers doing business with the pension fund.
“(Ms.) Paskin-Jordan has served the SFERS with many hours and deep knowledge,” said Supervisor John Avalos in a statement to Pensions & Investments. “At the time of her reappointment, we should have certainty that the cloud of questions hanging over her is cleared so that we are making the right decision.”
Mr. Lee reappointed Ms. Paskin-Jordan to a second five-year term to the retirement board on Dec. 8 and she has already been sworn in. But city supervisors have 30 days to reject the mayor's appointments, though they must have a super majority of eight of 11 board members.
A woman answering the phone at Paskin Capital Advisors, who would not give her name, said Ms. Paskin-Jordan would be in meetings all day and would be unavailable for comment.
The woman referred all inquiries to Jay Huish, the retirement system's executive director. Board Secretary Norm Nickens said Mr. Huish was unavailable for comment.
However, Pensions & Investments obtained a letter written by Mr. Huish to the city ethics commission, which is also investigating the matter, referencing the GMO investment.
Mr. Huish said Ms. Paskin-Jordan received a threshold waiver to invest with GMO from two former employees at Montgomery Asset Management, who went on to work at GMO. The three had worked together at Montgomery.
Mr. Huish said the pension fund considers GMO a manager of public market assets, and board members are allowed to make investments in those assets. Mr. Huish said in the letter that after consulting with staff and the city attorney, he did not believe Ms. Paskin-Jordan had violated the city's conflict-of-interest rules but acknowledged others could reach a different conclusion.
