OMAHA, Neb. (AP) - The U.S. Department of Justice has launched a preliminary inquiry into the Omaha Public Schools pension fund, according to a district memo.
The Omaha School Employees’ Retirement System gave notice of the inquiry to staff in a memorandum last month, the Omaha World-Herald reported. Staff and trustees must maintain all records, emails and texts regarding their role, the memo said.
“We intend to cooperate with the DOJ in this inquiry and don’t believe that it will lead to anything to be concerned about,” wrote Donald Erikson, an Omaha bank executive who is the president of the system’s trustees.
The inquiry comes after the newspaper published an investigation in January that found mismanagement and bad investment decisions at the retirement system caused a more than $770 million budget shortfall. The school district has cut $19 million from its budget this year, and will likely have to make budget cuts annually to compensate for the shortfall.
Cecelia Carter, the director of the retirement system, declined to comment. Monique Farmer, a spokeswoman for the Omaha Public Schools, also declined to comment. Michael Norris, chief of the general crimes unit in the U.S. Attorney’s Office in Nebraska, said he couldn’t comment on whether his office has opened an investigation.
The newspaper’s investigation also raised concerns about ties between retirement system leaders and the fund’s main adviser, Connecticut-based Atlantic Asset Management. Atlantic advised the fund, but also sold trustees investments. Half of the pension’s $1.2 billion portfolio was invested in businesses that are connected to Atlantic.
The Justice Department and U.S. Securities and Exchange Commission has already investigated Atlantic in connection with a fraudulent scheme that resulted in the retirement fund losing $16 million.
It’s unclear if the inquiry is related to the newspaper investigation or the case against Atlantic.
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Information from: Omaha World-Herald, http://www.omaha.com
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