San Diego County Pension Terminates “Whistleblower”

The San Diego County Employees Retirement Association has terminated the employment of Jeffrey Baker, who had accused the fund’s investment team of failing to inform the its investment committee that risk budgets had been breached.

(October 19, 2011) — Jeffrey Baker, self-proclaimed “whistleblower” and a San Diego County Employees Retirement Association (SDCERA) investment officer who had accused the fund’s employees of failing to report a risk budget breach, has been fired.

According to multiple sources, Baker – who had been on paid administrative leave – has been officially fired from the pension fund. This follows an independent consultant’s recommendation in April that the position Baker held be eliminated, although the consultant did not specifically recommend that Baker be fired. In May, Baker filed a civil-service complaint against the fund, alleging investment and disclosure improprieties. He was subsequently placed on leave, although sources say that this was unrelated to his claims against the fund.

The complaint that Baker had filed directed allegations towards external portfolio strategist Lee Partridge, amongst others, and revolved around an alleged breach of risk limits in SDCERA’s emerging markets and Treasury bond portfolios. Baker claimed that his position was being terminated because of the concerns he had with Partridge’s actions. At the time, he was seeking $500,000 in damages and the retention of his position within the fund.

The complaint, obtained by the San Diego Union-Tribune, stated: “In 2009 Mr. Lee Partridge was employed as an SDCERA investment portfolio strategist consultant. Mr. Partridge advised SDCERA to invest $200 million in the HIM Treasury Program. On August 30, 2010, Mr. Baker alerted Mr. Partridge the risk associated with Hoisington Treasury Program fund exceeded SDCERA’s investment policy risk limits. Mr. Partridge disagreed, dismissing Mr. Baker’s concerns. Mr. Baker later learned from Jan Teague at HIM that Mr. Partridge specifically wanted HIM to run the Treasury Program at risk levels that substantially and materially exceeded SDCERA’s investment policy.”

At the time, SDCERA refuted Baker’s assertions. “The complaint alleges that the Hoisington investment is over the risk budget,” a SDCERA representative told aiCIO. “Hoisington is only one element of the treasury program as a whole. Additionally, SDCERA’s risk budget applies to the total investment class, not individual investments.” The fund continued in a statement: “SDCERA will establish through the Civil Service Commission process that Mr. Baker’s personnel claim has absolutely no merit. No one can be characterized as a ‘whistleblower’ on this issue because the issue was fully disclosed and well known before and after the investment was made.”

Any breach of the fund’s risk budgets must be brought to the Investment Board at quarterly board meetings – as opposed to monthly meetings, according to sources. This specific instance was reported to the board in its June quarterly meeting.

Baker, nor his lawyer, could be reached for comment. SDCERA declined to comment out of respect for Baker’s privacy.

<p>To contact the <em>aiCIO</em> editor of this story: Kip McDaniel at <a href=''></a> </p>