PENSION EXEC TOOK FREE TRAVEL

The vice chairman of the city's pension board has accepted free trips to conferences, some underwritten by money managers who seek business from pension boards, without informing the board and in apparent violation of the board's travel policy.

William Rubin, 40, is vice chairman of the Philadelphia Board of Pensions and Retirement, an employee in the city commissioners' office and treasurer of Local 696 of AFSCME District Council 33.

He's taken two expense-paid trips this year to what he calls "educational" conferences, one in San Francisco and another in Lake Las Vegas, Nev.

Both conferences were sponsored by a company whose events are substantially underwritten by money managers who want to network with pension-board members like Rubin.

A third trip to an event in Grantville, Pa., was sponsored by an association of public-employee retirement systems.

"It's very clear that the travel should have been approved by the executive director or the board," said Romulo Diaz Jr., the city solicitor who also sits on the pension board.

Vincent Jannetti, the city finance director who serves as the pension board chairman, agreed.

"If someone is going to be asked to speak at a conference, then they should go to the executive director and vet it through the board's process," he said.

When the Daily News raised questions about his undisclosed and subsidized travel, Rubin initially argued that the pension board's policy on travel didn't require him to disclose it.

"I have followed the policy to the 'T' and I called the Law Department," Rubin said. He said he would file the appropriate state and city financial-disclosure forms next year to document this year's travel.

Several days later, Rubin changed his mind, saying he would henceforth disclose his intinerary, as well as his past travel, even though his interpretation of the policy did not require the disclosure.

"I think the policy needs to be amended," Rubin said. "It should be called an educational policy and not a travel policy. I think the language should be tighter."

In just his first term on the pension board, Rubin has become a mover and shaker, as well as a lightning rod for controversy.

His biggest move came early last year when he pulled together the four union members on the board and a fifth board member, City Controller Alan Butkovitz, in a coalition that has seized control of the board from the Street administration's four members on many issues.

The new majority has pushed a Sudan divestment policy, hired its choice for chief investment officer, become more sympathetic to union grievances, pushed to hire more minority money managers and elected Rubin as vice chairman, a position that hadn't existed for many years.

Board-member travel, often to sunny vacation spots, has been a point of contention for years. In general, union members tend to travel while administration officials don't.

Payments come from a fund known as "commission recapture," which is essentially rebates from money managers on their various trades on behalf of the $5 billion pension fund.

"I just want to make it clear that it's pension-fund money that is being used to finance these trips," Jannetti said.

Gwendolyn Bell, pension board executive director, said she knew of no board members who had accepted free travel.

"I can't say that I know all of the board's travel," she said.

When asked about Rubin's travel, Butkovitz said the controversy surrounding the issue was "an outgrowth of the tensions on the board."

He defended Rubin, saying: "He's not out there junketing. I think he takes the idea of the fiduciary responsibility and being a warrior for labor very seriously, and I give him credit for being one of the best-educated members on this board."

But the controller acknowledged that before leaving town, Rubin should have disclosed his proposed travels and the payments he was accepting from conference organizers.

"In my mind, the issue is ethical," Butkovitz said. "It's like if someone else buys you dinner, what are they getting for that?"

The travel policy was established in 2003. It limited board members to two city-paid trips per year, though members who belong to pension-related organizations were allowed to attend their own organization's conference, Bell said, for a third trip during the year.

But even that limit has been exceeded. For example, union member Carol Stukes, a four-term pension board member, had taken five trips through October of this year. She took three trips in 2006 and six in 2005.

In the last three years, the four union members on the board have spent more than $63,000 on travel with Stukes leading the way with almost $19,000 in expenses. Rubin has put in for $17,500 in expenses.

The policy also sets the terms for conferences that seek pension-board members as speakers. The board chooses who will speak at the event. That speaker can accept payment for transportation, meals and lodging paid by the organizer.

But the board is supposed to receive the payment, the event must discuss policy or practices relevant to the board's mission and the organizer can't have any financial interest in any pending board matter six months before or after the event.

Rubin said that he originally felt no need to disclose his travel because the company sponsoring the events, Information Management Network, asked him personally to speak at events in San Francisco in October and in Lake Las Vegas, Nev., last March.

He also spoke in Grantville near Harrisburg at an event sponsored by the Pennsylvania Association of Public Employee Retirement Systems, but he required no travel or lodging subsidy.

Though he was listed as vice chairman of the city pension board on conference materials, Rubin said he was speaking at these events as an individual.

"They wanted my expertise as a board member, a city employee dealing with the election process, and a union member," he said.

Diaz, the city solicitor, didn't buy the logic of Rubin's analysis.

"He may have made a good faith effort at making a distinction between his travel and that kind of travel requiring board approval, but the policy doesn't recognize such a distinction," he said.

While conceding some events are more about "junkets and alcohol," Rubin said he focuses on "solid educational events."

And if conference organizers are seeking pension-board business, he said he will not attend the event or accept a subsidized speaking engagement.

Rubin said he began accepting subsidized engagements just this year and saw no reason to inform his colleagues on the board.

That changed when he decided to attend the Public Fund Boards Forum in San Francisco Dec. 9. He told the board he wanted the city to pay for part of his stay.

Rubin wanted to count the San Francisco conference as one of his two city-paid trips; the other was earlier in October in Palm Springs, Calif.

The San Francisco event, run by IIR Holdings, a company based in Dubai, paid his airfare and one night of lodging. The city paid his other expenses.

Rubin had planned to accept a free trip to Scottsdale, Ariz., in January to attend a conference sponsored by Opal Industries but canceled that because it conflicted with his union's meeting to nominate officers. Like most of the conferences, the Opal event is sponsored by money managers.

Rubin said he does plan to attend a one-day event in New York in January.

In mid-March, he's listed among five key speakers at the Fairmont Miramar Hotel in Santa Monica, Calif., where Terrapinn, the event organizer, is sponsoring a conference on an arcane investment strategy known as 130/30 funds.

Rubin said companies like Opal, Terrapinn and IMN are not looking for city business.

"They provide education to [pension] trustees," he said.

Erica Kirwan, a spokeswoman for IMN, noted that money managers "are our biggest supporters." IMN designs the event based on what the industry wants to see.

And although pension-fund trustees may come to learn about arcane investment practices, the "service providers," the banks, lawyers and money managers "are there for networking," she said. *