A little less than a month ago, Pando published secret documents outlining how one of the Wall Street’s biggest firms generates huge fees for itself from state taxpayers and public employees. Though these documents are related to business with state governments – aka the public – they have nonetheless been kept secret.
Following a New York Times forum on Pando’s reporting, financial sleuth Susan Webber of Naked Capitalism discovered 12 other sets of documents from private equity firms – these, in particular, doing business with the state of Pennsylvania, which spends hundreds of millions of dollars a year on Wall Street fees. Amazingly, she discovered them buried on the state’s own website, which might lead some to believe such documents aren’t really being kept secret at all.
But, in a move underscoring just how much both government and Wall Street are indeed trying to hide the lucrative fees and terms they are negotiating, the Pennsylvania State Employee Retirement System has now removed the documents from the state’s website. As the Philadelphia Inquirer reports:
The Pennsylvania Public School Employees’ Retirement System “has made the decision to remove alternative investment contracts posted prior to 2012 from the Treasury Department Website,” spokeswoman Evelyn Tatkovski tells me. That’s after I asked PSERS about statements by Susan Webber, the financial consultant who runs the NakedCapitalism.com Web site under the pen name Yves Smith, that the documents posted by PSERS on the Pennsylvania State Treasury Web site provide a “treasure trove” of seldom-seen fee and operations information on funds managed by Cerberus, KKR, TPG and other large hedge funds that run money for chronically underfunded PSERS.
PSERS had no immediate comment when I asked if there was a legal basis for the agency’s about-face and suppression of public documents, or whether money managers had threatened to drop the state as a client unless it surrendered.
Here’s the good news, though: no matter how angry the politicians or Wall Streeters may be, the proverbial toothpaste can’t be put back into the tube in the age of the Internet. Indeed, just as the Blackstone documents Pando uncovered are available for all to see, Webber has made sure all the documents she obtained remain available through her website. As the SEC promises greater scrutiny of these deals, these document releases will become all the more significant in educating the public about the relationships being forged between governments and the so-called “alternative investment” industry.
No doubt, that’s precisely why state and local governments are so frantically trying to keep these documents secret.