SDCERA Supported in Decision to Fire Investment Officer

The Commission upheld all the charges including that Baker violated SDCERA policies and was insubordinate in connection with SDCERA’s investigation of his conduct. The Commission found that the level of discipline—termination—was appropriate because this was a second violation of the same policy for which he had been previously reprimanded.  

SDCERA said Baker was terminated for repeatedly violating SDCERA’s Data and Information policy. When he was confronted with the first violation in October 2009, Baker vowed not to break the policy again. However, SDCERA later discovered that despite his promise, Baker had violated the policy again.  

During the hearing, neither Baker nor his attorney refuted this evidence.   

The case Baker and his attorney presented was that Baker was a whistle-blower protected from adverse employment actions. However, two independent bodies, the County Office of Internal Affairs and the Civil Service Commission, previously determined that there was no probable cause because the information had already been publicly disclosed.  

Baker made statements about the riskiness of SDCERA’s Hoisington Investment, but the Association noted that being a whistle-blower requires revealing previously undisclosed information.   

SDCERA said the Board of Retirement received several reports about the volatility of the Hoisington Investment both before SDCERA entered into the investment and on several occasions afterward. Specific examples include: the volatility of the Hoisington investment was discussed with the Board in detail before the investment was approved on August 19, 2010; details of the risk in the Treasury Program versus the benchmark were discussed with the Board at the February 17, 2011, Board meeting; and the modeling of the Hoisington investment was discussed with the Board at the December 16, 2010, Board meeting. The Board was well informed and understood the nature and performance of the investment.