Professional Documents
Culture Documents
Gb2WdisC
14 District Judge
15 APPEARANCES
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ALSO PRESENT: David T. Meberg, Joseph Geiger, John DeLollis,
23 Michael Cavanaugh, Robert Lesniewski, Trustees
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3 that I'd like to talk about, but if there is anything you would
4 like to talk about, just feel free. The principal one, as you
7 report about the funds and not unlike other people had some
10 for a long time. I don't know them one way or another, but I
13 they see a dip, they talk to three other people and see who
19 Mr. McGuire was very positive, said we'll get on it right away.
20 And then I was a little disappointed not long after that to get
22 Anyway, there's been back and forth, and now it's November and
25 to you from you, Boyd, and also from you, Glen, but I'd be more
5 trustees, and I know that I speak for them and for Ms. O'Leary
9 part of the trustees not only to doing the best job they can
12 the way they invest the money and, frankly, about the returns
15 trustees have not about looking at this but I think just the
16 process of it, and you've heard from a lot of lawyers and I'm
17 not sure that's always been the most instructive. And I think
21 they have, but to be more clear about the concerns about the
24 path forward here, but I know that the trustees would be glad
19 how the assets are invested in any way whatsoever. They come
2 managing these funds are absolutely and above and without fail
8 THE COURT: You could search high and low for the
14 me, and I'm the only one who's been talking on this subject. I
15 have no idea.
20 honest, it's never come up. I don't even know really Gallagher
1 putting out every year who came in first, who came in second,
3 somebody else, we've got to make more money for the school,
15 You were here, you were in small-cap equities and that returned
20 results came in, of course we would have been there. But it's
23 for one thing. And second, you gave that hypothetical, but
1 get your money out when you need to get it out because it gets
2 tied up or stuck," and floats the idea that it's not a good
5 say they say that and let's say a fund lost a half a billion
15 suggestion for you to make, the trustee being the fiduciary for
21 they say Harvard did this much better than you did last year,
14 jobs they have, but with respect to these investments, the CFO,
20 that would say, You could have done better if you took this,
25 could be sued.
5 right thing and nobody should look at them. That's why we got
8 this, but could you just say who the trustees are, so to speak.
15 six from labor. I'll just go over, the management trustees are
21 MR. MEBERG: I'm one of the few who are actually still
25 association.
4 company?
14 paid to be a trustee?
19 it lunch.
22 can think some more about this, but maybe under seal to your
24 talk some more about that, your Honor, but I do think that
4 well, I think they understand how important their jobs are and
6 concern this could be the bottom they're about come into now
13 what the real concern was. And the real concern, I think,
14 translating what you wanted to them and what they wanted to you
15 and what the concerns were to you was simply that the union and
19 the funds, and I can honestly say that I think the leadership
22 but are constantly under scrutiny for everything they do, and
23 don't do. And I think there was a real concern that the
24 expectation was that by seeking new advice when they had some
5 whatever happens when these guys leave the room, they may get
9 the ground with these guys, they take this fiduciary obligation
14 And I know you never questioned that, but I think it's worth
18 idea and somebody says, Yeah, we'll get on it right away, and
19 then I get a lawyer letter two weeks later that says, Rah, rah,
21 to the next meeting and I say, Hey, what about that, and they
22 say, Yep, trustees are all for it, and here's the questions you
24 didn't think that was a good way to go, and I thought for the
1 but you don't want to limit the questions because then for the
4 get the worst of both worlds. You get limitation and then you
6 taking a good look. Anyway, P.S., P.S., and now it's November
21 that the funds adopted addressed that and they say you should
23 to.
10 issue RFPs -- I think we can get them out by the end of next
13 or anybody responds?
15 we think are good candidates for us, and since normally if you
16 knew the people were going to bid for it, you would definitely,
19 for it, because usually when you do it private like this, you
11 those returns and see where they fall against the measurements
18 cat, per se, as we had discussed, and I'm just going to float
21 the past number of years, over the past couple years, even
4 $500,000 for their services, but they are due for an RFP
7 services.
14 haven't they?
25 department of labor?
3 was great concern about what was going on with the funds and
11 Gallagher. I'm just saying that you've got a lot of money out
15 three bonds and the guy called me the other day and said, Maybe
16 we should shorten the curve on the bonds, you know what I mean,
20 of the things I would have added, you have three topics, and I
2 does get that advice from them, and as we discuss this, an RFP
13 that out.
16 to Ms. O'Leary saying one where you give us this advice and
22 come back and say Gallagher's great, you're doing just the
23 great thing. Once you put out an RFP, then Gallagher could say
3 now and have been for a long time, but I would just get some
4 people who would do it. How much could it cost, by the way? I
8 maybe even less than that, but who knows. It's a drop in the
17 tiny?
19 has like three mutual funds since they only recently got into
20 investments.
1 about.
6 better price.
8 different fund?
22 decisions.
25 individually.
7 doesn't read her own mail, so I read the mail, and it says
8 they're changing the funds that you can now select from.
11 drop and which ones to add? That's the whole point. I mean,
12 it's a lot of money there, and for a while you could only
14 an index fund shows up and it turns out that the index fund is
18 the consultant to put the majority of the effort and then these
25 possible and we'll get it out there and get this ball moving
1 forward.
4 It's what all the trustees are doing these days, evaluating and
5 reevaluating how they can get the most money for their class
9 that may or may not have been on your list was the issue of the
12 conversation maybe with the trustees, who you have now met,
18 on the part of the monitor, Mr. McGorty, and also on the part
19 of the trustees. The issue is really that there are more facts
20 that are out there in the public record now because of the
21 hearing.
24 facts.
9 so those are the numbers that we've come to. We think that
10 what might make sense, just to clarify things and I think would
13 the facts.
19 through the trustees to try to recoup the moneys that have been
20 lost and otherwise address the issues that have been raised.
1 actually release the report publicly, and the only reason for
4 come talk to us with the idea that what they're saying is going
13 the case I was doing this morning, as soon as I get the letter
14 that says "filed under seal," nobody can see this thing, and
15 blah, blah, blah, then everybody in the world wants to see it,
18 is 50 times more powerful than the same letter that doesn't say
21 unless they've had due process and blah, blah, blah. But
23 jumped all over it and are fixing the problem, everybody has
2 it. Does that mean that some guy's not going to come along and
6 and says, It's not enough. But that comes with the territory,
17 on things.
21 being sealed.
25 I think we could, frankly, work more and more and more to get
6 draft, I'll take a look at it and I will also deal with the
8 there's been several, that that will satisfy them. They're not
21 everybody.
6 been doing this now for a while, and I don't remember anybody
8 meeting I've ever had, except for my law clerks when they're
9 supposed to do something.
14 the dissidents, and it's a rumor mill and they put a twist on
15 things and you have members that go and read that. And every
21 then word on the street, it's always those six individuals that
22 speak the loudest get heard the most. And that's what happens,
23 the rumor mill starts, goes on a blog spot and we start getting
25 good, and I believe we've come a long way over the past four or
1 five years under the monitorship not only by Glen but by Dennis
2 Walsh as well, and for five or six people to go and ruin all
3 the hard work and effort that has been put in in the last five
9 the members.
11 right?
18 (Adjourned)
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