V.I. Government Employees’ Retirement System Board Chairman Wilbur Callender defended the retirement system’s legal and ethical standing, during a GERS Board meeting Thursday, while addressing several subpoenas issued by Attorney General Claude Walker.
“Let me assure you that there is no corruption in GERS,” Callender said. “None.”
Callender made reference, in his monthly report to the board, to individuals spreading misinformation “on the airwaves daily” about his chairmanship, but he did not elaborate on specific complaints.
“I also heard that I was corrupt,” Callender said. “Let me assure you that that is the farthest thing from the truth … I certainly didn’t come on this board for self-interest. I came here as a member to help.”
Callender was subpoenaed by Walker on Oct. 9, after the board neglected to respond to a written request for its financial trading records made by the attorney general on Sept. 30. Legal counsel for the board had suggested at that time that Walker did not have the authority to make the request absent a formal investigation.
The subpoena elicited confusion from Callender, who said that he is not a repository for the system’s records. Walker has since subpoenaed GERS’s investment managers directly, as well as its custodian bank.
Walker has stated that the reason for his interest in GERS’s records — including all “security descriptions, trade dates, transaction types, and share prices and quantities” going back five years — is that “the governor has asked him to assist in implementing certain reforms.”
At Thursday’s meeting, the subpoenas were only referred to briefly outside of executive session, but a combative Callender, who is up for re-election as chairman next month, said if anyone has information suggesting GERS is doing anything illegal they are welcome to present it to the attorney general. If not, he said, “They need to shut up.”
In what might be read as a jab at the administration, Callender said he welcomes an audit by the V.I. Inspector General of all government credit cards, an idea recently proposed by Sen. Almando “Rocky” Liburd after increased media scrutiny of credit card charges made by Gov. Kenneth Mapp and his staff.
“And I wish he would do that. Because I think GERS is a great example of how credit cards should be handled,” Callender said.
He said only three government credit cards are in the hands of GERS. The administrator, the chief financial officer and the board chairman all have cards, Callender said, but they are only used for official GERS business.
The attorney general’s recent subpoenas for GERS’s records, which some board members have said is a political power play, comes during a time of increasing pressure for reform of the failing system, which is scheduled to run out of money in as few as 10 years.
A modest GERS reform bill that reduces some benefits and increases payments for more recently hired Tier II government employees has passed the Legislature, but its provisions would only extend the life of the system by a couple of years at maximum if it becomes law. A large infusion of cash, big contribution increases and cuts to future retirees’ benefits are needed to make a substantial difference in the system’s lifespan, GERS has repeatedly stated.
GERS Administrator Austin Nibbs said that after a meeting with the governor and his financial team, he is “not optimistic” that an infusion of cash is forthcoming. He has said that if the system receives no money via pension obligation bonds, the GERS will be forced to take drastic measures including making the temporary suspension of its loan programs permanent, selling off most or all of its real estate holdings, or even bringing legal action against the governor.
According to a report issued at Thursday’s meeting, GERS disbursed $134,498,094 more than it collected during fiscal year 2015. During that time, 296 retirees were added to the system and 246 removed, for a net increase of 50 individuals receiving retirement benefits.
In the short term, Nibbs said renting out a newly-renovated GERS-owned building in Havensight (the White House) is a possibility to make up some of the revenue that evaporated when GERS suspended its loan programs this year, forgoing the chance to collect interest on new loans. Work on the White House, Nibbs said, will be finished by the end of the year. Housing a museum in part of the building and charging admission has not been ruled out.
Nibbs also said that GERS has listed two of its real-estate holdings for sale, one property in Estate Coakley on St. Croix and one in Estates Hoffman and Nullyberg on St. Thomas.
He urged against selling the holdings as “distressed properties,” saying he thinks the St. Croix property should be sold for no less $10 million, and the St. Thomas property for no less than $8 million, well above the current values of the properties listed on GERS’s website.
Nibbs cited the property that is now Margaritaville on St. Thomas as a cautionary tale regarding fluctuations in V.I. real estate prices. In 2003, a Mexico-based corporation paid under $10 million for the property; when Wyndham purchased it just four years later they paid $ 31 million.
On Thursday, the GERS board also voted to:
– Ratify the poll vote for an expenditure of $500,000 for cash to pay outstanding payables for Carambola North West LLC.
– Ratify the poll vote for an expenditure of $259,939.60 for cash to pay insurance for Carambola North West LLC.
Board member Michael McDonald voted no on both measures. Desmond Maynard abstained from the second vote. All other members voted yes on both.
Also present were board members Leona Smith, Carol Callwood and Vincent Liger. Board Vice Chairman Edgar Ross was absent from the meeting.