In California, public investment officers with power over billions of dollars in pension funds must disclose just about everything about their personal stock market trading: the stocks they own, their rough cash value, when they bought them, when they sold, and any profits they made.

Ohio requires public investment staff to disclose all their personal stocks. So does Florida.

Not Pennsylvania. In the Keystone State, lenient laws mean that scores of highly paid investment staffers and top public pension plan executives are required to reveal little or nothing about their personal stock trading.

Robert Caruso, executive director of the State Ethics Commission, calls the weak disclosure rules “a loophole, a deficiency.” He adds: “It creates a lack of transparency if everything is not put out there.”

Pennsylvania, as is routine now in the United States, nominally requires elected and appointed officials, as well as many government employees, to disclose personal financial information to deter conflicts of interest.

Experts agree such disclosure is especially vital for officials of pension funds, where decision-makers hold sway over billions of dollars and may be privy to a steady flow of inside information. In Pennsylvania, the staff at the Pennsylvania Public School Employees’ Retirement System (PSERS), the giant pension plan for school employees, oversees $73 billion invested. The Pennsylvania State Employees’ Retirement System (SERS) fund for state workers has $35 billion invested.

» READ MORE: PSERS pension chief makes big bets with his own money

The law in Pennsylvania has big loopholes. In fact, the state Ethics Act does not require officials or employees at the pension funds or elsewhere to reveal all of their investment holdings. It only requires a stock to be made public when any capital gains are cashed out and exceed $1,300 in a year.

That means officials can safely check “none” when asked for financial interests — even if they own a lot of stocks, investment partnerships, venture capital, and other valuable assets. There is no requirement to report when someone buys a stock and reinvests dividends.

These 70 or so top staffers at the two agencies do file another financial disclosure besides the one under the Ethics Act. This one, required under a gubernatorial order, is more rigorous. But the “disclosure” here is illusory.

A little-known 2012 state appeals court ruling neutered the law. It mandates that financial information must be stripped out before the public sees any of it.

Edward Siedle, a lawyer and public pensions expert in Boca Raton, Fla., said the reasons were simple why that taxpayer-paid pension staff should make detailed disclosures.

“All they do is manage money,” he said. “And it’s a public fund — it’s public money.”

» READ MORE: Here’s how the PSERS pension fund keeps its communications secret from the public

As The Inquirer reported Sunday, James H. Grossman Jr., the investment chief for the PSERS pension fund, made more than 80 personal investments from 2018 through 2020. Experts who reviewed his portfolio described it as diverse and high risk, and raised questions about how his public job and private holdings intersect. A lawyer for Grossman said he follows all the rules.

Grossman’s portfolio became public for a short period. But this happened due to a bureaucratic error, a state official said, and Grossman quickly had them pulled from public view.

They were attached to his ethics filing with the State Ethics Commission by mistake. His lawyers recently informed the commission that the law did not require him to make public all of his stocks. The commission agreed and the listings — for 2018, 2019, and 2020 — were taken down. (The Inquirer is posting the portfolio here.)

Over those years, the listing obtained by The Inquirer showed, Grossman sold about a dozen stocks. However, under the law, he was not required to list those either if his gain was under $1,300.

The state ethics law dates back to 1978, part of the wave of reform after President Richard Nixon’s Watergate scandal. Caruso, with the State Ethics Commission for nearly four decades, thinks the law should now be updated to demand much more financial information.

He said the public should be able to see the staff’s entire holdings, not just those that have been sold. As currently written, staffers may check off “none” for financial interests even if they hold a substantial portfolio.

Said Caruso: “There are many deficiencies in the Ethics Act and that certainly could be considered one of them.”

» READ MORE: Amid FBI scrutiny, top PSERS pension officials update financial disclosures

A governor’s order

Aside from the Ethics Act, the other financial disclosure requirement for state workers is a more demanding form that has been renewed by consecutive Democratic and Republican governors. It requires that filers list all their stocks, their value, and any stock sales.

Yet under the 2012 Commonwealth Court ruling, this information is only seen internally within the government. Ironically, this is because of language buried deep within Pennsylvania’s Right to Know Law, the very measure designed to open up government to the public.

The law has a paragraph sparing some information from exposure. It cites Social Security, cell phone, and driver’s license numbers — and “personal financial information.” The appeals court seized upon the phrase to impose a broad ban on any financial disclosure.

The Inquirer requested some of these governor’s disclosures under the Right to Know measure. The results were mixed.

James Nolan oversees 17 staffers as the chief investment officer for SERS. His forms disclosed his securities holdings, which were heavily in so-called “passive” funds, such as those from the Vanguard Group. His disclosure seemed to go beyond the requirements of the law.

At the same time, his forms did not reveal the value of his holdings, information required internally.

Pamela Hile, a fund spokesperson, said in an email: “We provided the responsive record, redacted under the exception we believe we have the authority to apply.”

» READ MORE: PSERS chief counsel steps down as board approves contested lawyer fees

The governor’s form for Grossman, who oversees a staff of 50 experts, however, contained no financial information when The Inquirer formally requested it. No holdings were listed.

The 2012 ruling was reaffirmed in 2020 in an opinion by the Open Records Office rebuffing a request to see the financial information filed by state environmental officials.

Caruso said the court had swung a sledgehammer in enforcing a law that seemed aimed at the redaction of specific bits of financial information, such as an ATM number. “There are ways to address this,” he said, such as by blacking out the digits of a bank account.

Caruso said it wasn’t enough that the officials’ superiors could still see the information.,

“There is transparency to maybe your supervisor or your employer, but when you are in the government realm, you need to be transparent to the public as well,” he said.

Siedle, the pensions expert, said the stripping out of the information was “insidious” and imposed “two levels of secrecy.”

He said it meant the public could not evaluate the investments of the pension staffs — or whether their agencies were enforcing conflict of interest rules.