- Board strips Propst of authority to give raises and promotions while investigation is pending
- Board asks AG's office to investigate Propst's actions
- State Treasurer Tim Eichenberg had previously asked the AG's office to investigate possible illegal actions by Propst
- PERA board dysfunction continues
- PERA's investments lost 2.5 percent in 2018
The trouble deepened this week for Wayne Propst, executive director of the state's Public Employees Retirement Association, when the PERA's board of directors voted to ask the state Attorney General's office to investigate the hefty raises that Probst has given himself and agency over the past five years.
The board also voted to strip Propst of his authority to hand out promotions and raises to PERA employees while the investigation is being conducted.
And, in what could be an even bigger signal of trouble for Propst and his allies on the board, state Treasurer Tim Eichenberg, who is a member of the board, revealed on Tuesday that he had independently asked the AG's office to investigate “possible illegal actions” by Propst in handing out the raises without board approval.
And the craziness and dysfunction that has plagued the PERA board for at least the past year continued when it was announced that two board members—Chair James Maxon and Natalie Cordova—had suddenly resigned from the 12-member board.
But wait, there's more. At The Feb. 12 board meeting, the board's fiduciary attorney, Harvey Leiderman, told the board members that they basically don't know what they are doing on several levels relating to internal governance. Leiderman told the board that they have no idea of what authority they have or haven't given to Propst over the years when it comes to his authority to give out raises and promotions to PERA staff.
To make maters worse, PERA's Chief Investment Officer, Dominic Garcia, reported that PERA's investment funds suffered a 2.5 percent loss in 2018. In comparison, the ERB retirement fund (teachers) earned 6 percent return during 2018. The PERA fund fell to $14.6 billion from $15 billion.
Propst has been under fire from several board members since at least last summer for handing out what they say were unauthorized raises and promotions. In 2018, Probst gave staffers more than $600,000 in salary increases, all apparently without board approval. Those raises were given at the same time that PERA management and the board have been pushing to eliminate, at least for a few years, annual cost-of-living increases, to the 80,000 public retirees that PERA serves. The money for those raises comes directly out of PERA's investment funds, and not from the state's general fund.
And the nuttiness that has gripped the board got even nuttier when the body agreed to spend $5,000 on a parliamentarian to help its new chair and vice chair, Jaquelin Kohlash (state employee from Taxation), and John Melia (municipal member from Albuquerque), run meetings according to Roberts Rules of Order. That money also comes directly out of PERA's investment funds.
Tuesday's meeting revealed some of the deep rifts between Propst's allies on the board and his opponents. Board member Loretta Naranjo Lopez said during the meeting that she thought Propst should be fired. Eichenberg said he thought that Propst should at least be suspended while his is being investigated.
Last month, state Auditor Brian Colón said his office has launched an investigation into Propst and the pay raisers and promotions he has handed out. The issue is whether Propst has the authority under state law and PERA rules and policies to give those raises without board approval.
And in another sign that the PERA board is clueless about what it is doing, an item on Tuesday's agenda asked the AG's office to investigate which board members talked to the ABQReport about the details of a Jan. 12 executive session the board held to discuss Propst and the raises he has given out. That motion went nowhere after Leiderman told board members that there was nothing in it's rules and policies that said that matters discussed in executive sessions were confidential.