When Lee Partridge, the county pension fund’s investment consultant, suggested outsourcing the fund’s investment team to his own company, some pension board members questioned whether Partridge had a conflict of interest.
County Supervisor Dianne Jacob and Treasurer-Tax Collector Dan McAllister, who’d both opposed originally hiring Partridge to begin with, said they were concerned about the potential conflict arising from his involvement in drafting the proposal that would give work to himself.
Government officials are strictly prohibited from having a financial interest in any contract that they were involved in creating. In some circumstances, that extends to consultants, too.
Instead of giving the work to Partridge without soliciting bids from other companies, the San Diego County Employees Retirement Association board voted yesterday to invite a limited number of bids for the outsourcing plan, which would send the association’s investment work to a private firm. Partridge offered to do it for $10.6 million annually.
The board’s attorney, Steven Rice, said he’d analyzed relevant laws and acknowledged that a perceived conflict may exist, but that none had yet occurred. He said no legal issues would prohibit the board from picking (and paying) Partridge to lead the outsourced investment team.
The state Attorney General’s Office has opined on a similar situation — and concluded that a consultant who’d conducted a feasibility study couldn’t bid on the work resulting from it.
I asked Rice today whether he’d read that opinion, and whether Partridge was in the same situation — bidding for something that resulted from work he was involved in.
“I think now’s not the time to get into a detailed discussion of the legal issues,” Rice said. “The extent to which all these rules apply is something we’ll continue to look at. I’ll be advising the board on that. We’ll be continuing to look at it. The attorney general opinion you’re reading from talks about a feasibility study. It’s not clear whether Integrity (Partridge’s company) has participated in what would be considered a feasibility study. It’s not clear. We’ll be continuing to look at it. The board of retirement is aware and interested in these issues.”
I sent the opinion to Jacob, who reviewed it. She said through a spokeswoman that it raised a valid question. She’s called the retirement association to request a written legal opinion.
— ROB DAVIS