And finally, a 2017 Huffington Post article entitled "Kentucky's Hedge Funder Governor Keeps State Money In Secretive Hedge Funds," is recirculating on social media in the wake of news that former Governor Matt Bevin pardoned a convicted murderer whose brother hosted a fundraiser in Corbin, Kentucky that netted the former governor $21 thousand to retire a campaign debt.
The article raises the often asked question whether Bevin, a hedge fund owner and investment manager, financially benefited from maintaining the pension systems' heavy reliance on alternative investments, like hedge funds.
The article clearly describes the events associated with the reconfiguration of the retirement system's board of trustees as well as the passage of SB2 in 2017, originally intended to increase transparency by full fee disclosure and to reduce the cost of pension investments by requiring competitive bidding for selection of firms overseeing investments.
The version of the bill that was enacted into law eliminated the competitive bidding requirement and diluted the fee disclosure provision. Additionally, financial analyst Chris Tobe explains, the bill that emerged from the 2017 legislative session "weakened fiduciary standards."
In an August 2019 special examination of system transparency in the Kentucky Employee Retirement System and Kentucky Teachers Retirement System, State Auditor Mike Harmon confirmed that the retirement systems have "abdicated [their] responsibility to abide by the Open Records Act."
https://www.facebook.com/419650175248377/posts/504540093426051/?d=n
KTRS's and KRS's responses to the special examination in October 2019 merited no known media coverage. In its response, KRS agreed to some recommendations but continued to assert that it was foreclosed from posting pre-SB2 investment contracts and authorized to implement redactions demanded by investment manager post-SB2 based on a 2016 open records decision that simply does not support that view as suggested.
KTRS elected to rely on its August 2019 response to the examination, reasserting that it would take no action because it "has complied with the letter and the spirit of Senate Bill 2 (RS 2017) and other applicable laws."
Whether you agree with the Huffington Post article or not, it summarizes the events leading up to its publication very well.
