A leading pension investigator claims that under Minnesota Gov. Tim Walz — Vice President Kamala Harris' recently tapped running mate pick — the state's public school teachers' retirement system is manipulating financial reports by significantly understating annual fees paid to Wall Street investment managers, and showing unrealistically high returns, the New York Post first reported.
Edward Siedle, an independent pension investigator, alleges that the state-run Teachers Retirement Association (TRA) has only revealed less than 10% of the $2.9 billion in fees it spent over the last decade. He also criticized TRA for reporting gains that barely exceed its own benchmarks by 0.2%, which he described to The Post as "virtually impossible."
"Even Bernie Madoff didn’t claim to beat the market every single year — and certainly not by the exact same percentage," Siedle said, and called the TRA performance a "Madoff miracle under Walz’s watch."
The late financier Madoff orchestrated the largest investment fraud in Wall Street history, and pleaded guilty in 2009 to running a Ponzi scheme that swindled thousands out of their life savings.
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Walz, who has been serving as chairman of the Minnesota State Retirement System since January 2019, oversees $140 billion in state employee funds, including $28.2 billion for teachers, the outlet reported.
"I don’t know if the man had any pre-existing knowledge of finance or pensions, but as chairman, he should have educated himself," Siedle said. "Pension board members have a fiduciary duty to monitor fees, and to ensure that the investments’ performance is accurately disclosed."
Katie Dickerson, a teacher nearing retirement, testified in February that despite high contribution rates, there have been no improvements to the retirement system, leading to extended work years and significant penalties for early retirement.
"Not only do we have a high contribution rate to TRA, but we . . . are forced to work many more years unless we are willing to be hit with huge penalties," Dickerson reportedly told the Minnesota’s Legislative Commission on Pensions and Retirement.
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For FY 2023, the TRA reported an 8.9% return and $24.19 million in management fees. But Siedle estimates actual fees to be between $334 million and $467 million, or 5% to 7% of TRA’s private assets. Even a 1% fee would total $280 million — over 10 times the reported amount. Siedle’s requests for investment documents have not yet been fulfilled by the TRA or state agencies.
Siedle’s report notes that the Minnesota attorney general and state auditors, who typically investigate such issues, are on the same state pension board chaired by Walz. Consequently, Siedle filed a whistleblower complaint with the SEC and FBI in July, according to The Post.
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The Harris-Walz campaign did not immediately respond to Fox News Digital’s request for comment.
