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The elevator rises swiftly and almost silently, gliding past floors 35, 36, 37, 38 before the doors open directly into a private apartment. The impeccably designed modern condominium, with views taking in all of downtown Dallas, sits inside Museum Tower, a 42-story building in the heart of the city’s arts district.

Completed in 2013, the building features sleek residences that fetch anywhere from $1.2 million for a one-bedroom apartment to $20 million-plus for a 9,350-square-foot penthouse. Amenities include a pool, gym, sauna and spa, a 24–7 concierge, and valet parking, as well as poolside butler service and on-site dog walking and grooming. Among Museum Tower’s well-heeled residents: private equity titan Tom Hicks, members of the prominent Bass family, and former Dallas Federal Reserve Bank president and CEO Richard Fisher. They enjoy all this luxury thanks to the building’s financial backer: the $2.1 billion Dallas Police and Fire Pension System.

Museum Tower should have been the crowning achievement of the DPFP and its ambitious former executive director, Richard Tettamant. Instead, it turned out to be a steel-and-glass albatross — and blazed a blinding light into the inner workings of a pension system gone badly wrong.

Problems started even before the tower broke ground in 2010. But they erupted into a full-blown crisis with a feud between the tower and neighboring Nasher Sculpture Center. The tranquil, elegant garden and museum is a jewel in Dallas’s arts crown. But soon after Museum Tower went up, a problem emerged: At certain times on a sunny day, light from the tower beamed directly into the museum, singeing artwork and angering patrons. The ensuing fight pitted firefighters and cops against the city’s elite.

Resentment over Museum Tower still smolders. For DPFP, however, far bigger issues have surfaced. The tower dustup caused the city — particularly its no-nonsense mayor, Mike Rawlings — to take a hard look at what was going on at the pension system for the city’s police and firefighters. What he found was alarming. Not only had DPFP engaged in a series of unorthodox, highly risky investments, but the board, with help from the state legislature, had granted overly generous retirement benefits, which the pension, with its finances in shambles, cannot pay. Its unfunded liabilities currently stand at about $3.3 billion; its finances are so bad that rating agencies Moody’s Investors Service and Standard & Poor’s have cut the city’s credit rating.

Interviews with more than half a dozen current and former DPFP staffers and trustees and pension fund experts, and a review of hundreds of pages of legal documents, reveal that the Dallas Police and Fire Pension System had all the elements of a pension plan in trouble: poor governance, little oversight by city or state representatives, sweetheart benefits, and a powerful executive director — in this case, former Baskin-­Robbins franchise owner Tettamant. Adding fuel to the fire: a board that was encouraged to make risky, illiquid investments and trustees who at times appeared more interested in elaborate travel junkets funded by taxpayer dollars than in risk control. The trustees who did ask questions say they were stonewalled or felt intimidated. Now Mayor Rawlings, a handful of trustees and city council members, and the Texas Legislature are scrambling to plug the hole and save the country’s tenth-largest city from going into bankruptcy.

Tettamant, who was booted from the fund in 2014, did not respond to requests for comment. But the crisis he left in his wake has thrown the whole city of Dallas into turmoil because of the pension’s billions of dollars in outstanding debt and obligations. Vital questions over what went wrong and who should be held accountable remain unanswered, while those fighting to save the pension plan find themselves at odds not only with the pension’s beneficiaries but in some cases with one another.

“The reason this makes us so angry is that no matter what happens now, we are still going to see police and firefighters who were promised things — things that they relied on — who are now not going to get them,” says DPFP board member and Dallas City Council member Philip Kingston, who is dismayed that the board has to slash benefits. “I am very resentful that I have to be the one to do that.”

The police and fire pension system is one of two public plans in Dallas. It counts as its beneficiaries some 10,000 cops and firefighters, and their families. Both the city and the workers pay into the plan, but the city functions as the ultimate backstop if things go wrong. Of the pension system’s 12-person board, however, only four members represent the city; they are city council members who are appointed to serve on the DPFP board by the mayor. The rest represent the various police and firefighter unions, and retirees.

Now, to save what money remains, the council trustees have been put in the position of blocking access to crucial benefits — specifically, the system’s controversial Deferred Retirement Option Plan, known as DROP. The program allows retired members to keep their retirement savings in the fund and earn interest on those savings if they stay on the job past their eligible retirement age. When they choose to redeem their benefits, they can take the assets out in a lump sum. The program was conceived as a tool to entice cops and firefighters to stay on the job; during the 1990s, Dallas had one of the highest crime rates in the country, and the city needed a strong police force.

But DROP proved to be far more expensive than anyone anticipated — all the more so after a 2001 DPFP board vote that tied the interest rate paid to employees on their DROP savings to the anticipated ten-year return of the pension plan, regardless of the actual performance of the fund or the economy. As a result, DROP members received an interest rate of between 8 and 10 percent, even when, as in 2008 and 2009, the pension fund was losing money.

Another crucial element: If there was ever an issue with the pension system, DROP members could simply withdraw their money. That is precisely what started to happen in late 2016 as DPFP beneficiaries became aware of the perilous state of their pension system’s finances. The pension plan, already low on funds, with many of its investments tied up in illiquid assets of questionable worth, was rapidly running out of cash.

In December, Mayor Rawlings, acting in his capacity as a private citizen, filed suit in Texas state court to halt DROP withdrawals. Then in February, after the 14-member city council voted to cover their legal expenses, the four council members serving on the pension’s board — Kingston, Jennifer Staubach Gates, Deputy Mayor Pro Tem Erik Wilson, and Scott Griggs — joined Rawlings’s suit.

The legal action turned up the heat on a situation already close to the boiling point. Samuel Friar, chairman of the DPFP board and a lieutenant in the Dallas Fire-Rescue Department, circulated a resolution among the city’s fire and police unions stating that if any DPFP council-member trustee went ahead with a legal claim against the pension system, the unions would implement a lifetime ban on political support of all four city council trustees.

When she heard about the resolution, council member Gates, the newest DPFP board member, contacted Friar to ask what was going on. Friar responded to this request with an e-mail that contained a copy of the document and an explanation of his actions. Friar said that because Rawlings had been able to sue the pension fund as a private citizen, Friar should have the right to provide the document to the firefighter associations of which he was a member. “It is unfortunate that events have brought us to this point. I believe all board members want this fund to survive, but bickering and making false accusations in a lawsuit is counterproductive,” Friar wrote in his e-mail, a copy of which was obtained by II.

“I too am sorry it has come to this,” Gates responded via e-mail, adding that “after my short time on this board and hearing stories of former trustees I have come to the understanding [that] the system has used bullying tactics in the past to keep trustees silent instead of addressing the financial issues of the fund. When I heard about this resolution my reaction was this is business as usual.” Tettamant may have left DPFP three years ago, but the pension system and its board are still mired in the kind of political infighting that has made it much harder to solve the plan’s real problems.

Aetna Springs is located in northeastern Napa County, California. The estate includes historic, federally landmarked land; 44 luxury-­estate lots; two commercial vineyards; and a nine-hole golf course. Once a popular holiday destination for wealthy Californians, Aetna Springs closed in the 1970s, fell into the hands of the Unification Church, and reportedly was used as a kind of brainwashing camp by devotees of Reverend Sun Myung Moon’s controversial religious group. In 2006 the site was purchased by developers with elaborate plans to create a private club — a vision that included not just the Aetna Springs land but a second site at nearby Lake Luciana, for a combined 3,000 acres. That same year they tapped DPFP as an equity investor.

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