The Nasher, Politics and Pension Fund Management: Can This Be Good?

Categories: Schutze

Thumbnail image for Thumbnail image for Kwame.jpg
Former Detroit Mayor Kwame Kilpatrick, a pioneer in the use of political influence in public pension fund management.
Got a story in the newspaper newspaper this week I'd like you to see if you have a minute. It's about the Nasher Sculpture Center and Museum Tower, the condo building accused by the Nasher of reflecting too much light on it. I spoke with officers of the city's police and fire associations (unions) last week, and they expressed alarm over the degree to which the mayor and some City Council members are bringing a political issue into what should be the strictly non-political arena of public pension fund management.

The Dallas Police and Fire Pension System owns Museum Tower. The mayor and his friends are supporters of the Nasher. The cops and the firemen think the mayor is trying to beat up on their pension fund in order to make it bend to the will of the Nasher. His spokesman, Sam Merten, told me that was bullshit (my word).

But the police and fire association officials I spoke with had some persuasive detail to offer to support their fears. They told me they were informed last year by former City Manager Mary Suhm that their employment contract talks were on permanent hold until they got their pension officials to do what the mayor wants on the Nasher. Suhm does not respond to any of my emails, so I don't know what her version is.

Merten said the accusation is false, but he did confirm that the mayor met with association officials last July to discuss the contract talks and did discuss the pension fund at that meeting. State law prohibits public employee group officials from bringing up pension issues in contract talks. Merten said the law doesn't say mayors can't do it, and he said the mayor was meeting with them just to chat, not negotiate.

See also: Mixing Politics and Pensions

I looked up the law. Yeah, he's right. It doesn't say, "Oh, and by the way, this includes mayors, too." But the intent of state law is quite clear: Nobody thinks mixing politics, pay issues or other extraneous agendas with fiduciary issues is a good idea. It is, after all, a significant element in how Detroit got where it is today.

In my piece in the paper, I say this should be simple: The mayor and the City Council have every right to examine the pension fund. It is a public obligation in the end, and it will fall to taxpayers to set it right if it gets into financial trouble.

But the dispute between the Nasher and Museum Tower is by its very essence not a public issue. If there were a single ordinance or stricture the city could use to make Museum Tower do what the Nasher wants, believe me, it would have been invoked long ago. Museum Tower obeys the law, and that is why the Nasher has pursued its interests politically, socially, commercially and through The Dallas Morning News and D Magazine, all of which is its right.

But the mayor and the council ought to bend over backward to demonstrate that political, social and commercial interests, along with media suck-up interests, are not polluting the fiduciary waters at the pension fund.

So? Simple. As long as they are pursuing an audit of the pension fund, the mayor and the council should drop all reference to the Nasher issue and allow the private parties to duke it out however they may. Failing that, the police and fire associations have good reason to believe that what we are seeing at City Hall is Early Detroit.

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