LA State Police Fund Grapples with Gift-Giving Questions

February 2, 2005 ( - Once again, officials of a Louisiana state pension fund are in hot water for accepting gifts from those looking to do business with the fund.

An Associated Press news story quoting a Louisiana state auditor’s report said that board members of the state’s pension system for state police employees and their families may have run afoul of ethics rules designed to prevent potential conflicts of interest through accepting gifts. The auditor’s report said the gifts totaled $290 during a 14-month period, including holiday gift baskets and investment-related books. Louisiana ethics rules prohibit government workers from taking items with any economic value if they know the gift-giver is trying to do business with the state.

The news report said retirement system staff and trustees also accepted $2,852 in meals during four occasions, including a December 8, 2003 gathering sponsored by Bank One for trustees and retirement system staff members that totaled $1,754.

Though that isn’t a violation of state ethics regulations, it does raise a potential conflict of interest, state Legislative Auditor Steve Theriot told the AP. The Louisiana Code of Governmental Ethics excludes food and drink from gift prohibitions.

Part of the 46-page report was requested last year by lawmakers concerned about possible improprieties between investment advisers, consultants and managers and those who run state public retirement systems. Retirement officials said they planned to seek an opinion from the Louisiana Board of Ethics on whether the those gifts were allowable.

The study warned that the issue is important because staff members are involved in screening, selecting, monitoring and evaluating investment managers and custodians hired by the retirement system. Any gifts received by staff members “could be viewed as attempts to influence … oversight decisions,” the report said.

Irwin Felps, executive director of the State Police retirement system, told the Associated Press that the officials decided in December not to allow gifts in the future for staff members and that money managers have been notified of the policy. However, retirement system officials said they plan no changes because of that exception.

The Louisiana State Police Pension and Retirement System handles investments for 2,128 current and former State Police employees and their beneficiaries. The fund has assets of about $338 million.

Last Frbruary, the state’s Ethics Board ruled that a Dallas fund manager had violated ethics rules in its dealing with the Teachers Retirement System of Louisiana, a finding that supported allegations by a former fund director who had complained about potential ethics problems relating to gift-giving violations (See LA Ethics Board Ruling Supports Former Director’s Charges ).