A report from the Chicago Police Department Pension Board Accountability Group is accusing the management of the Policemen’s Annuity and Benefit Fund of Chicago of providing little transparency to plan members and mismanaging funds.
The pension board accountability group hired forensic auditor Christopher Tobe to conduct an audit. The report accuses the defined benefit plan’s board and staff of hiding tens of millions of dollars in investment fees.
The first call for an audit of the pension fund were voiced by a retired Chicago police officer Rosemarie Giambalvo in February 2020. After plan administrators said any audit would have to be paid for by those insisting on conducting a forensic review of the pension, the former officer raised the US$20,000 required to fund it.
“The purpose of a forensic audit is in substance to conduct an investigation as a means of discovering potential fraud, wronging doing or other financial crimes,” wrote the PABF’s board in a statement on its website in May. “Given that no legitimate cause for this type of audit exist, it isn’t a prudent use of fund resources to engage with an additional auditor to perform a forensic audit. The fund has and continues to respond to all proper inquiries made and public records requests as required by applicable law.”
In his report, Tobe noted that the PABF’s board and staff concealed and blocked access to information required by the forensic audit. He also wrote that the board denied Freedom of Information Act requests made to acquire some of the missing information in an illegal manner.
“The fund’s board structure itself creates this endless cycle of underfunding and adds to the lack of transparency. This board structure facilitates excessive conflicts of interest with the mayor’s immediate political goals of a city budget and political fundraising overshadowing long-term fiduciary goals.”
The PABF didn’t respond to the Canadian Investment Review’s request for comment.