freebeacon.com By Andrew Kerr
Renowned fraud investigator’s probe into misuse of teacher pension funds posed ‘a very serious risk to trust in government,’ Walz administration said
Minnesota Gov. Tim Walz knew he had a big problem on his hands when members of his administration caught wind in February that thousands of angry public school teachers had banded together to retain a renowned pension fraud investigator to probe their state retirement plan.
The teachers’ long-simmering rage about Minnesota’s two-tiered teacher pension plan—in which teachers hired in 1989 or later get much smaller retirement payments than teachers hired before 1989—was reaching a boil. Many “Tier 2” teachers, hired after 1989, felt they were effectively subsidizing the lavish benefits of their older “Tier 1” counterparts, while their own retirement payouts would be much smaller. Even worse, they feared the chronically underfunded pension fund might not be able to afford their reduced retirement benefits when it came time for them to exit the workforce. These fears were compounded by what the teachers said was Minnesota’s “demonstrated lack of transparency” and history of presenting the public with misinformation about the pension.
And so in February, the angry teachers raised $75,000 and hired Edward Siedle, a former Securities and Exchange Commission lawyer who has won some of the largest whistleblower awards for financial fraud in American history, including forcing tens of millions of dollars in payments from J.P. Morgan over its failure to disclose conflicts of interests to wealth management clients. The educators raised the money in just 19 days, “which shows you how absolutely pissed off teachers are,” Minnesota teacher Maggie Temple, a leader in the effort to hire Siedle, told the newsletter Political News Items.
As governor, Walz chairs the $146 billion Minnesota State Retirement System—which includes the teachers’ $28 billion pension fund—even though he says he’s never owned a stock or bond in his life. According to a private Facebook group set up by aggrieved teachers and viewed by the New York Post, Walz, despite being a Minnesota teacher himself, has “not shown any support whatsoever” for the teachers’ pleas for more transparency.
The Minnesota teachers had Siedle conduct an independent audit of the state’s pension program. His 114-page report, published in late September, details evidence of what Siedle says amounts to systemic and brazen fraud in the Minnesota pension system Walz oversees…
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