Dallas Mayor Requests Criminal Investigation Of Past Pension Fund Administration | KERA News

Dallas Mayor Requests Criminal Investigation Of Past Pension Fund Administration

Dec 30, 2016

Dallas Mayor Mike Rawlings says he has spoken with the Texas Department of Public Safety to request a criminal investigation of the past administration of the Dallas Police and Fire Pension Fund.

In a press release, Rawlings says the past administration of the troubled pension fund "committed a grave breach of trust with our first responders with serious ramifications impacting current and former police and fire personnel and their families, as well as Dallas taxpayers."

A spokesman for the Department of Public Safety tells KERA the Texas Rangers will be conducting a criminal investigation. 

The ailing fund has asked for a billion-dollar bailout. If no changes are made, it faces insolvency in as soon as a decade. Dallas City Council was briefed earlier this month on a proposed plan to fix the fund, which would target some of the fund's most generous benefits. 

The mayor also says he has been "in close cooperation" with the FBI on the matter. A FBI spokesperson didn't immediately respond to a KERA request for comment; the FBI typically doesn't comment on investigations. 

The pension board released a statement this afternoon: "The Dallas Police and Fire Pension Board and staff have been working with and fully cooperating with the FBI for more than a year on its ongoing investigation of previous activities. Meanwhile, we remain focused on working with city and state officials to find long-term solutions that will safeguard previously earned and future retirement funds for Dallas first responders.”

Here's the full statement from Rawlings:

"The past administration of the Dallas Police & Fire Pension System committed a grave breach of trust with our first responders with serious ramifications impacting current and former police and fire personnel and their families, as well as all Dallas taxpayers. As I have learned more in recent years and months about how the DPFP reached its current crisis, I have come to believe the conduct in question may rise to the level of criminal offenses. Therefore, I recently spoke with Texas Department of Public Safety Director Steven C. McCraw to request that the Rangers conduct a criminal investigation of the past DPFP administration.  In addition, I have been in close cooperation with the FBI on this matter. Anyone brazen enough to commit crimes that harmed those who sacrifice so much to keep our city safe must be brought to justice.”

Board votes to allow small withdrawals

The mayor's statement comes after the Dallas Police and Fire Pension Board reversed itself and will allow some small withdrawals from deferred retirement funds.

The board voted Thursday to allow withdrawals for small amounts requested in November. The panel had voted earlier this month to shut the gates entirely on withdrawals from the ailing pension fund.

More than $500 million has been withdrawn since August.

Rawlings filed a lawsuit on Dec. 5 to stop the lump-sum withdrawals, which he said have accelerated the estimated insolvency projection for the fund to about 10 years. A judge issued a temporary restraining order to stop the large withdrawals, but approved smaller monthly payments.

The board is expected to take up possible larger fixes for the fund at its January board meeting.

In a video posted Wednesday night, Rawlings says it will take public help to find an answer, and that the city has a plan to fix the pension problems. 

Some Dallas City Council members respond

Dallas City Council member Philip Kingston, who serves on the pension board, said he’s critical of the new investigation, calling it redundant with separate investigations already ongoing from the FBI and a law firm the pension board hired.

"The board had examined criminal prosecution long ago and determined that our first duty was to see about getting the maximum recovery we could for the beneficiaries," Kingston said. "After that, of course, we were anxious to see anybody who broke the law go to jail — but the FBI can handle that."

City Council member Jennifer Staubach Gates, who also serves on the pension board, said she’s not hopeful that the investigations will recover any funds — but that they may hold the right people accountable and be an example for public pensions across the country. 

KERA's Stephanie Kuo, Gus Contreras and Molly Evans contributed to this report. 

The Associated Press contributed to this report.

Read KERA News coverage on the Dallas Police and Fire Pension Fund below.