The state pension system for
Illinois teachers spent nearly $700,000 on lawyers to investigate two top
officials at Teachers' Retirement System, one who was fired in June and the
other who resigned in August after being placed on administrative leave.
The figure comes from TRS's
response to a Freedom of Information Act request from Illinois Times,
which asked for billing records, personnel records and a copy of reports
outlining any allegations of wrongdoing by Richard Ingram, former TRS executive
director who resigned in August, and Jana Bergschneider, the pension system's
chief financial officer, who was terminated by Ingram in July.
The nature of investigations
conducted by two Chicago law firms isn't clear. TRS refused to turn over
reports on any impropriety, proven or not, by either Bergschneider or Ingram.
Bergschneider was hired last month as a fiscal officer by the state appellate
defenders office at an annual salary of $120,000, which is $70,000 less than
she earned at the teachers' pension system, according to records in the state
comptroller's ofice. Reached by Illinois Times, she declined to
answer questions about her new position or why she was hired for a state job
despite being fired by TRS. Ingram could not be reached for comment.
The FBI has shown an interest in
Ingram's departure from TRS. Seven days after his resignation, a
Springfield-based special agent asked for a copy of a report on an
investigation conducted by the Chicago law firm of King and Spalding, which TRS
paid more than $577,000 between March and September to conduct the
investigation that resulted in the executive director's resignation. It's not
clear whether TRS turned over a report to the FBI. The agent declined comment.
TRS in August would not say whether the investigation uncovered evidence of
criminal activity, and it remains unclear why Ingram was placed on
administrative leave by unanimous vote of the TRS board during a special board
meeting convened days before his resignation.
The King and Spalding
investigation into Ingram was headed by Zachary Fardon, former U.S. attorney
for northern Illinois, who billed TRS $1,116 per hour of his time; Michael Johnston,
a fellow partner in the firm, was paid $1,129 per hour. In addition to King and
Spalding, TRS paid nearly $114,000 to the Chicago law firm of Elrod Friedman,
also between March and September, according to records provided in response to
the newspaper's request for bills paid to firms that investigated Ingram and
Bergschneider. Ingram approved payments to Elrod Friedman until his departure
from TRS, the records show, while King and Spalding sent bills directly to
Devon Bruce, TRS board chairman.
In a July 2 letter to
Bergschneider, Ingram wrote that she was being fired due to work performance
and conduct related to the procurement process for the Gemini Project, a
software overhaul aimed at modernizing the agency's pension administration
system. The Gemini Project, which last March was expected to go live in
January, now is undergoing review, according to a request for proposals issued
last month by TRS.
In its request for proposals, TRS
asked prospective bidders to evaluate the Gemini Project, which has been under
construction for two years, and "conduct a high-level review, assessment
and oversight." Bidders were told that the pension system, among other
things, wanted to know whether the project was properly planned, whether
"rigorous methodology" was followed and whether issues were being
addressed in a timely manner.
With $53.4 billion in its
investment portfolio, TRS is the state's largest pension system. As of the end
of last year, the system was underfunded by 40%, but TRS paints a rosy picture
on its website, saying that the pension system expects to break even on the
fiscal year that ended June 30 and has a 40-year return of nine percent, higher than the
target of seven percent.
Illinois Times
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