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Aetna Springs was only one of many illiquid and esoteric investments that the pension system made. In addition to real estate investments, DPFP made a series of commitments to private equity and natural-resources funds, including energy investments in Texas and elsewhere. The plan also invested in farmland, agriculture, and timber around the world, in such far-flung locales as Australia and South Africa. As of December the fund had a staggering 44.8 percent of its assets invested in a real assets portfolio comprising real estate (25.4 percent), natural resources (11.6 percent), and infrastructure (7.8 percent), along with a 15.8 percent allocation to private equity funds. Even for a pension plan without major liquidity concerns, such an asset allocation is unusual.

Many of DPFP’s investments were troubled. In the case of Aetna Springs, just as with Museum Tower, there were problems early on, when entitlement rights for a proposed golf course were not obtained. The issues and setbacks continue to this day. Separately, DPFP invested in a residential development in Hawaii that proved to be a money-loser.

Then there were the losing bets that DPFP made through CDK Realty Advisors. According to the complaint filed by DPFP against CDK in recently settled litigation, CDK put DPFP into a series of “high-risk investments [that] have resulted in write-downs and losses of more than $320 million.” These investments included land development deals in Iowa and Colorado in which DPFP acted as both an equity investor and a lender.

How did the pension plan come to be in this situation? Many point the finger at Tettamant, who was appointed the fund’s administrator in 1992, having previously worked for the city. These critics accuse Tettamant of promoting an investment strategy that included high-risk, illiquid assets that put the fund in the role of real estate developer — a role for which it was not qualified.

Tettamant did not respond to requests for comment for this story, but he provided lengthy comments to D Magazine in response to a January article titled “Why Richard Tettamant Could Cost Dallas $1 Billion.”

“In the early 2000’s the DPFPS Board voted to invest in separate account real estate investments to improve its returns,” Tettamant said in his comments. “It is not the responsibility of the DPFP staff, including myself, to recommend investment strategy or investment decisions, but rather to assist the Board as directed by its Trustees. All investments were vetted by the DPFPS Investment Advisory Committee wholly consisting of Trustees and reviewed by outside investment consultants. Prior to the purchase of almost every investment, the Board reviews the financials and in almost every case performs a site visit, including meeting and interviewing the investment managers.” The role of the administrator, Tettamant insisted, was merely to provide assistance.

Board members who served during Tettamant’s time paint a different picture. City council member Lee Kleinman, who was a pension trustee from 2013 until his resignation as vice chairman of the board in 2016, says it was almost impossible to get information on investments out of DPFP staff, including Tettamant, and that when information was provided, it sometimes seemed to be inaccurate or incomplete.

Other council member trustees recall similar experiences. “It is very difficult when you are sitting on a board and the professional staff are telling you everything is fine,” Kingston says. “It is very difficult to exercise your fiduciary duty as a board member if you are confounded with a professional staff that is trying to deceive you.”

Trustees say board members who raised questions could be subject to harassment. Scott Griggs was Mayor Rawlings’s first appointment. “I went on in 2011,” he says. “I was the only board member at the time asking questions.” In particular, Griggs asked about the Museum Tower project. As a result of his questioning, Griggs says, the pension system hired a PR person and a private investigator in an attempt to find evidence that could be used against him. He says Tettamant and Gary Lawson, the pension’s former outside counsel, were among those who oversaw the effort. Lawson, who no longer works for the pension fund, insisted in an e-mail to II that there was never an investigation of Griggs “of any kind,” saying, “I have the highest regard for Councilman Griggs but he is incorrect on this issue.”

For trustees who decided to go along, the perks of a position on the DPFP board could be enormous. For starters, there was foreign travel: Trustees went on extensive and expensive trips, all on the taxpayer’s dime. Under the auspices of due-diligence trips, some trustees visited Australia, China, Dubai, Hawaii, and elsewhere.

All three of the city council trustees who served on the board while Tettamant was still active and who spoke to II for this story said that within a month of their appointment to the board, they were approached about going on a due-diligence trip.

“On my first day I was offered an iPad and a trip to Australia for me and my family,” says Griggs. Kleinman adds, “Within a week or two, I was offered to take a trip to South Africa via Amsterdam.” Griggs and Kleinman declined these offers. Kingston was offered a due-­diligence trip to look at forestry assets outside London and Cape Town, South Africa. “What the hell forestry assets do we have outside of London?” wonders Kingston, who also turned down the trip. “Did we buy St. John’s Wood?”

Almost all of the DPFP board has turned over in the past few years, but Kleinman describes a deal-happy environment early in his tenure, with trustees voting to invest in transactions he deemed too complex for cops and firefighters to fully understand. “All they ever did is chase deals and look at how they could travel,” he says. “They got suckered into a bunch of stuff.”

The party came to an end in 2014 with the ousting of Tettamant after he had lost the confidence of the fire and police board members. The new executive director, Kelly Gottschalk, who joined in 2015, is widely regarded as being good at her job. But the pension system is still struggling with the aftermath of earlier bad decisions.

The parking lot behind the squat, four-story office block at 4100 Harry Hines Boulevard in Dallas — home to the DPFP — began filling up with pickup trucks at about 1:00 p.m. on Tuesday, February 14. Retired cops and firefighters hunkered down in their vehicles, sheltering from the rain and waiting for pension system officials to open the building’s doors. A special meeting of the DPFP board of trustees had been called for 1:30 p.m. to discuss, among other urgent items, the city council member trustee lawsuit. ?

The restless cops and firefighters probably did not know it, but 4100 Harry Hines Boulevard itself is a testament to their pension plan’s folly. DPFP owns the building, which the plan says it invested in at the recommendation of CDK; in turn, CDK managed the property for DPFP. But according to the pension plan’s lawsuit against the real estate firm, CDK did not operate the property in a “satisfactory and efficient manner.” Instead, the firm charged other tenants in the building, including its own attorney, below-market rents. CDK sold the top floor of the building to itself, in what the pension system alleged was a clear instance of self-dealing. CDK did not respond to requests for comment.

In 2016, the Federal Bureau of Investigation raided CDK’s offices as part of an inquiry into the pension plan’s investments. (The FBI also visited the DPFP’s offices.) The investigation is ongoing. A federal grand jury also is reported to be weighing evidence against the fund, and Rawlings has called in the Texas Rangers to review its actions.

As the cops and firefighters streamed into the boardroom for the special meeting of the pension board on that February afternoon, they seemed less concerned about where their money had been invested — although at a meeting the previous week there had been anger over this — than they were with what was happening to their retirement benefits and DROP money. As they waited for the meeting to start, they clustered in groups. Almost to a man they were dressed in jeans and sweatshirts; many wore baseball caps. They talked about retirement savings (“I just want my money”) and health care costs, and worried about what it is like to grow old in a system that they feel does not have their backs.

This Valentine’s Day their anger was very clearly focused on the city council board members. One cop who got up to speak objected to the fact that the council members were having their legal bills paid for by the city. Brad, a cop with 47 years of service, said the council members were being offered “unlimited funds” to fight their case. He told the council members in the room, “I feel like you are hiding behind a super-PAC.”

The city, however, does not have unlimited funds. Speaking before the Texas Pension Review Board in December, Rawlings warned that Dallas will be forced to file for bankruptcy if it doesn’t get a solution to its problem soon. The city council DPFP board members also are worried about the state of the city’s finances: A separate pending legal dispute could add even more billions of dollars in back pay. “It’s like jumping off a cliff and stabbing yourself on the way down,” says Deputy Mayor Pro Tem Wilson.

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