The Securities and Exchange Commission has subpoenaed records from Macon-Bibb County as part of an investigation related to its pension plans and consultant.
The commission sent subpoenas this week to County Manager Dale Walker and County Attorney Judd Drake informing them of the investigation involving Independent Portfolio Consultants and the county’s pension plans.
The county must produce to the SEC any communications related to Macon-Bibb County, the pension plans and Independent Portfolio. The subpoena specifically requests documents concerning proposals and responses when firms bid on the plan, as well as how they were scored and selected.
Macon-Bibb County is fully cooperating with the investigation, Macon-Bibb spokesman Chris Floore said.
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As part of the investigation, Walker will have to testify on March 28 in Atlanta, according to the subpoena.
“The investigation is a non-public, fact finding inquiry,” the Feb. 13 letter said. “We are trying to determine whether there have been any violations of the federal securities law. The investigation and subpoena do not mean that we have concluded that you or anyone else has violated law.”
Among other duties, the SEC enforces the federal securities laws and regulates the securities industry.
Independent Portfolio, also known as IPC, manages the county’s $112 million main pension plan and a Division A pension. A different investment consultant has managed a separate fire and police pension plan since late 2015.
In January, the County Commission voted to request new proposals from firms interested in managing the main portfolio. The maneuver came after some shakeups in Independent Portfolio’s senior management and involuntary bankruptcies were filed by several investors. IPC officials said the bankruptcy filings would be quickly resolved.
Even before then, a battle over the pension plan had been brewing, led by County Commissioners Gary Bechtel and Larry Schlesinger. They’ve said they were misled when Walker recommended IPC to manage the three Macon-Bibb related plans in 2014. At the time the commissioners were unaware of Walker’s previous professional relationship with a then-IPC senior consultant.
Becthel and Schlesinger also questioned the scoring process used to rate Independent Portfolio against other companies bidding to manage the plans. And in the fall of 2016, they also raised concerns about what they said were exorbitant fees being paid for the plan.
Walker has denied to The Telegraph that the scoring process was rigged. An IPC official said that comparing fees for different types of plans is like “comparing apples to oranges.”
The SEC also subpoenaed any documents related to relationships between Macon-Bibb County and IPC, including Walker and the former consultant.
Under IPC, the Macon-Bibb portfolio outperformed its 2016 benchmark by $1.6 million. The firm’s CEO, Arun Kaul, informed commissioners in January that despite the changes Independent Portfolio continues to have a strong group of investors.