(May 20, 2013) -- Detroit's state-appointed emergency manager is looking into the legality of firing four city pension trustees over a $22,000 trip to Hawaii, the Detroit Free Press reports.
A number of other public pension funds have backed out of the National Conference on Public Employee Retirement Systems, which began on May 18 with a trustee seminar and runs until May 23.
The location—the Hilton Hawaiian Village in Honolulu, Hawaii—had raised eyebrows and generated an number of critical articles in the press, as the United States grapples with severely under-funded public pension systems.
Kevyn Orr, Detroit's emergency manager, is "very concerned" over the cost and appearance of the city trustees' attendance, according to his spokesman Bill Nowling.
"This trip shows a monumental lack of judgment, and it raises serious questions about how the board is exercising its fiduciary responsibility to manage the funds prudently," Nowling said. "We are researching all of the emergency manager's legal options regarding the boards, including the removal of individual members."
Detroit's two city pension funds have been struggling to improve their image a responsible fiduciaries.
In March, a former trustee and a current general counsel for city pension funds were charged with participating in alleged bribery and kickback schemes, amounting to pension asset losses of an estimated $84.18 million.
Government attorneys claim that former trustee Paul Stewart and attorney Ronald Zajac "used their positions as trustees of the retirement systems to personally enrich themselves and other co-conspirators by demanding or accepting bribes and kickbacks." According to court documents, these included cash, designer watches, Playboy party tickets, private plane flights, massages, hotel stays, meals, golf clubs, drinks, and gambling money, among others.