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Tue October 8, 2013
Atlanta Police and Fire Pension Boards Remain Supportive of Gray Despite Alleged Misconduct
Many city of Atlanta police and fire pension board members remain supportive of Larry Gray, their longtime financial advisor. That's despite recent allegations of professional misconduct, which last month contributed to Gray resigning from the city’s main employee pension fund.
At separate board meetings Tuesday, police and fire pension board members called for an independent review of Gray’s firm and the millions committed to his hedge fund.
Still, board member Larry Mahle, a retired firefighter, said Gray remains trustworthy.
"If our fund was underperforming and we were getting bad information from Mr. Gray certainly that’s something to consider, but he’s a good consultant. Did he make some mistakes? Probably yes. But he's a good consultant."
Gray is accused of steering millions in pension money to his own hedge fund without disclosing his affiliation to some general employee board members. He also allegedly failed to disclose significant personal debt and a lawsuit accusing him of fraud. In addition, some say Gray's arrangement with the pension boards - serving as both financial advisor and money manager - is a conflict of interest.
A federal investigation is ongoing and Mayor Kasim Reed has called on the police and fire pension boards to sever ties with Gray.
Mahle, however, said removing the financial advisor at this point wouldn't be justified. He said unlike what allegedly happened at the general employee pension board, the fire pension board was fully aware of Gray's ownership stake before committing to his hedge fund.
"If reports come back and everything comes back above-board and clean, I have no intention of getting rid of Mr. Gray as financial advisor," said Mahle.
Police pension board members took similar positions.
"We're going to look at the numbers. We're going to look at the bottom line. We're not about relationships. We've never been about relationships. We're about returns and that's the bottom line," said police pension board member Jeff Glazier.
Still, the mayor’s appointee on the two boards and the city’s chief financial officer reiterated that removing Gray remains an option.
After the board meetings, Mayor Reed emailed this statement: "I believe the process is moving in the right direction and am confident that both boards will reach a decision that resolves this issue."