Chicago Teachers Pension Fund Cryptic About Its Crypto Investments
By Jim Vail
|CTPF Investment Chair Phil Weiss|
Chicago Teachers Pension Fund Trustee Phil Weiss believed that CTPF was not invested in crypto currencies. After being wined and dined by crpto salespeople, Weiss, who chairs the Investment Committee, said no way.
Weiss agreed with experts who say crypto is not a legitimate investment. Some say an investment in crypto is even worse than a Ponzi scheme because it is an unregulated market. The spectacular collapse of FTX was proof in the pudding.
However, it turns out that the Chicago Teachers Pension Fund is indeed invested in crypto, in a very cryptic way.
At last month's CTPF Board meeting, Retired Teacher Trustee Maria Rodriguez asked an investment consultant if the Fund was invested in crypto directly or indirectly. Callan, the Fund's consultant, said the Chicago Teachers Pension Fund is invested in crypto, but it is minimal, although she could not say how much pension money was invested.
Trustee Weiss then interjected to say that he was first told the Fund was not invested, but then they later admitted upon further questioning that yes the Fund did buy into crypto, but at a minimum.
"We studied and decided crypto didn't meet the standards, it's not investment grade," Trustee Weiss said at the board meeting.
He said it was a good thing too as these investments like the subprime disaster that tanked the economy in 2008 have gone downhill. But he added that crypto has worked its way into a lot of places.
Indeed it has. Chicago Mayor Lori Lightfoot declared Chicago would be a haven for crypto currency because it would revolutionize banking and bring the city investment and jobs. Wall Street similarly sold subprime loans as a wonder for people who otherwise could not buy a home.
"We're fortunate to not get involved in this," Retired Teacher Trustee Lois Nelson said at the meeting. "We're not gambling, we're investing."
The Chicago Teachers Pension Fund appears to take its marching orders from the Chicago Machine. Its close ties to Ariel Investments and Chairperson Mellody Hobson who also chairs the Starbucks Board of Directors as they engage in a vicious anti-union campaign and has performed poorly for CTPF over the years and now this crypto investing after the Mayor declared it good for the city show the Fund's allegiance to politics over sound pension investments.
Second City Teachers filed a Freedom of Information Request to determine how much CTPF is invested in crypto currencies. All members who pay into the Teachers Pension Fund should be able find out how their pension money is being invested.
"With respect to CTPF, please disclose any direct or indirect investments, including through funds managed by external fund managers, in any of the following categories as it relates to digital assets."
However, CTPF attorney Daniel Hurtado denied the request.
"CTPF is unable to fulfill your request because it is not asking for existing public records, but is asking CTPF to research its records and then create a document or documents that contain the information you are requesting, which is not required under FOIA."
I then filed a follow up FOIA request that simply asked how much money has the Teachers Pension Fund invested in crypto currencies.
Public pension funds across the country are denying public requests about their investments in crypto currencies.
"America's state and local pensions are supposed to be the most transparent in the world," wrote Ted Siedle in Forbes Magazine. "After all, trillions of public dollars are held in these large unregulated investment funds and every state has established freedom of information act laws designed to ensure public accountability."
Siedle, a pension forensics expert and former SEC lawyer, says public pensions today have become very adept at circumventing state public records laws and stonewalling.
"All public pensions I have ever investigated refuse to provide even minimal information until forced to do so through litigation," he wrote.
The Chicago Reader recently obtained via a FOIA request that there were more than 2,100 complaints from Illinois residents filed with the FTC (Federal Trade Commission) alleging they lost more than $45 million to crytocurrency scams. In 2022, major cryptocurrency entities collapsed, including Voyager, Celsius, BlockFi and FTX who had an office in the West Loop.
"Emails sent by Mayor Lori Lightfoot's staffers between Dec. 2021 and Sept. 2022 illustrate the mayor's desire to position the city as a hub for the cryptocurrency industry."
But the crypto con spectacularly exploded after FTX declared bankruptcy. John Ray, who came in after Enron blew up, was brought in as FTX's new CEO.
"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occured," he was quoted in Jacobin.
By the way, FTX's former CEO was also the second-largest donor to the Democratic Party.
Fictional valuations and accounting manipulations used to artificially pump up balance sheets - that my friends is crypto.
Should our pension money be investing in this?