Fired Pension Review Board Chair Claims It Was Because Of His Warnings About Troubled Pensions

I’m not sure how, but most blogs I regularly read missed the fact that Rick Perry has removed Frederick “Shad” Rowe, the chair of the Texas Pension Review Board. The Board oversees nearly 400 public pension systems in Texas that contain an astonishing $200 billion in assets.

Why did Perry fire Rowe? Perry’s answer, via a spokesperson, is that the chair of the board should pursue the best interests of Texans and not their own “personal agendas.” No elaboration from Team Perry, of course.

Rowe, however, offers a different story for why he was removed:

Dallas money manager Frederick “Shad” Rowe said the move was made because of his repeated warnings about financially troubled pensions and his criticism of some pension investment strategies, such as the use of hedge funds and other alternative investments.

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He also has been outspoken about what he considered gaming of public pension plans and helped to prompt the Texas Attorney General’s Office to scrutinize the pension plan for Fort Worth city employees.

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Rowe also said that he did have an agenda: total candor.

“I presumed I had built up enough credibility that I could ‘tell it like it is’ without worrying about politics,” he said. “I believe underfunded public pensions and other expensive promises represent a fiscal time bomb.”

But wait, it gets better:

Rowe said a Perry aide in recent weeks had asked him to stop talking to reporters and to stop soliciting help from the office of Texas Attorney General Greg Abbott, the Austin American-Statesman reported Tuesday.

Castle said it is “not the case” that the governor’s office asked Rowe to stop working with the attorney general. But she said, “It’s important that there .?.?. be an opening of the lines of communication before going to the attorney general.”

What, exactly, is that supposed to mean? Does it mean that Governor Perry doesn’t want talk of underfunded pensions being scattered around the state as he prepares for another run in 2010? Or, does it mean that Perry doesn’t want Abbott–a potential contender for higher office himself–getting credit for doing something about it?

Either way, it is clear that Team Perry wants to keep a lid on talk of any problems with the state’s pension funds. Could it be that many of the pension funds are invested heavily in businesses of his major contributors, such as was the case with the Employee Retirement System of Texas which lost money when stock in James Leininger’s KCI went down the toilet after a lawsuit verdict? Could these be the type of “risky investments” that Rowe wanted to stop?

Democrats like Sen. John Whitmire (D-Houston) praise Rowe, but say he overreached because the agency isn’t an enforcement agency:

State Sen. John Whitmire, a Houston Democrat who serves on the pension board, said Rowe was “a positive influence” who “helped professionalize the review board and get additional resources.”

But he might have overreached, Whitmire said, particularly in asking the attorney general to get involved in examining public pensions.

“Shad took it as more of an enforcement, oversight agency,” Whitmire said. “It really never had the tools to do what Shad wanted.”

Even so, shouldn’t we be glad that at least one lonely Perry appointee to some board or commission is actually trying to do something to help the people of Texas?

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