An Arizona Superior Court has ruled that a federal grand jury subpoena received by the $7.9 billion Arizona Public Safety Personnel Retirement System is a public document and must be turned over to Judicial Watch, an open-government advocacy group in Washington.
Officials at Phoenix-based PSPRS had contended the subpoena — received earlier this year in connection with an investigation into valuation of properties in the PSPRS real estate portfolio — was exempt from the state's public records law.
Maricopa County Superior Court Judge Arthur Anderson disagreed.
“Although the public records law does not mandate disclosure of every document held by a state agency, a document with a 'substantial nexus to government activities' is a public record,” he said in an Aug. 4 opinion.
Judicial Watch attorney Michael Bekesha said the group will release the subpoena to the public as soon as the advocacy group receives it.
“This is a great victory for the taxpayers of Arizona,” he said in a statement provided to Pensions & Investments. “With the release of the federal grand jury subpoena, the public will be one step closer to fully understanding the extent of the criminal investigation into the numerous allegations and questions of abuse at PSPRS.”
PSPRS spokesman Christian Palmer said in a statement that the system's board of trustees has to decide whether to appeal the decision. But, he said in the statement, “the chairman of the board, Brian Tobin, is in favor of releasing the subpoena.”
Three PSPRS portfolio managers and the chief counsel for the investment office of the pension system resigned last year, maintaining the values of portions of the PSPRS real estate portfolio were improperly inflated.
In another matter, PSPRS also has reached an agreement with its former administrator, James Hacking, who was terminated last month following disclosures by the Arizona Republic newspaper that he had given pay raises to investment staffers without first getting approval of the state Department of Administration.
Mr. Palmer said an agreement negotiated by the attorney general's office would give Mr. Hacking a severance of around $107,250 and an annual pension of $86,704. Mr. Hacking's legal bills also will be covered, should he be named in any legal proceedings, Mr. Palmer said.
Mr. Hacking, who made $238,000 a year, had a contract that went through June 30, 2015.
“The attorney general's office reached what we consider to be a fair and agreeable settlement with Mr. Hacking,” Mr. Tobin said in a statement. “We sincerely wish him the best of luck in his future opportunities.”
PSPRS sources said the board felt it had grounds to fire Mr. Hacking for cause over the pay raises, but decided it did not want to engage in a legal battle over the matter.