In California, public investment officers with power over billions of dollars in pension funds must disclose just about everything about their personal stock market trading: the stocks they own, their rough cash value, when they bought them, when they sold, and any profits they made.
Ohio requires public investment staff to disclose all their personal stocks. So does Florida.
Not Pennsylvania. In the Keystone State, lenient laws mean that scores of highly paid investment staffers and top public pension plan executives are required to reveal little or nothing about their personal stock trading.
Robert Caruso, executive director of the State Ethics Commission, calls the weak disclosure rules “a loophole, a deficiency.” He adds: “It creates a lack of transparency if everything is not put out there.”
Pennsylvania, as is routine now in the United States, nominally requires elected and appointed officials, as well as many government employees, to disclose personal financial information to deter conflicts of interest.
Experts agree such disclosure is especially vital for officials of pension funds, where decision-makers hold sway over billions of dollars and may be privy to a steady flow of inside information. In Pennsylvania, the staff at the Pennsylvania Public School Employees’ Retirement System (PSERS), the giant pension plan for school employees, oversees $73 billion invested. The Pennsylvania State Employees’ Retirement System (SERS) fund for state workers has $35 billion invested.
The law in Pennsylvania has big loopholes. In fact, the state Ethics Act does not require officials or employees at the pension funds or elsewhere to reveal all of their investment holdings. It only requires a stock to be made public when any capital gains are cashed out and exceed $1,300 in a year.
That means officials can safely check “none” when asked for financial interests — even if they own a lot of stocks, investment partnerships, venture capital, and other valuable assets. There is no requirement to report when someone buys a stock and reinvests dividends.
These 70 or so top staffers at the two agencies do file another financial disclosure besides the one under the Ethics Act. This one, required under a gubernatorial order, is more rigorous. But the “disclosure” here is illusory.
A little-known 2012 state appeals court ruling neutered the law. It mandates that financial information must be stripped out before the public sees any of it.
Edward Siedle, a lawyer and public pensions expert in Boca Raton, Fla., said the reasons were simple why that taxpayer-paid pension staff should make detailed disclosures.
“All they do is manage money,” he said. “And it’s a public fund — it’s public money.”
As The Inquirer reported Sunday, James H. Grossman Jr., the investment chief for the PSERS pension fund, made more than 80 personal investments from 2018 through 2020. Experts who reviewed his portfolio described it as diverse and high risk, and…
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