Texas Attorney General Vows to Fight for Openness on Public Money in Investments

AUSTIN, December 14, 2004 - Texas Attorney General Greg Abbott today reaffirmed his commitment and leadership in defending open government in Texas by supporting a proposal that would usher in more accountability and disclosure in the investment of public funds.

“Texans must be able to find out how their hard-earned money is being managed by investment firms,” said Attorney General Abbott. “Taxpayers should never be shielded from information about the investment of their money. There is no proof that secrecy will ensure sound investments, but we know that secrecy can conceal bad investments.”

Attorney General Abbott joined Rep. Dan Gattis (R-Georgetown) today to emphasize the importance of Gattis’ proposed legislation addressing these issues.

If passed, the bill, which will also be filed today in the Senate by Sen. Robert Duncan (R-Lubbock), would significantly improve the public’s access to information about investments by government pension programs and other funds. Rep. Gattis acknowledged the public’s right of access to the information. He further noted, “Investment of public funds has grown rapidly and diversified widely in the 21st Century. My legislation will bring Texas open government laws, written in the 1970s, into the new century.”

Sen. Duncan concurred, saying, “Hard-working Texans deserve to know the fate of investments made with their money, and I am proud to work with Attorney General Abbott on this open government legislation.” As proposed, the legislation broadly views investments of public funds as “investments of and for the people, and the people are entitled to information regarding those investments. [The law] shall be liberally construed to implement this policy.”

The funds at the center of this controversy have maintained that certain disclosures about their investments of the public’s money would unfairly expose proprietary information to competitors. The legislation would acknowledge firms’ right to assert confidentiality of certain information, and balance that with the public’s right to know whether its money is being invested wisely.

The Texas Attorney General’s Office remains in a court standoff with the Texas Growth Fund over Abbott’s ruling earlier this year that the fund must release information about its investments of Texas Teacher Retirement System funds. The Attorney General noted that the fund had failed to show how such disclosures could harm its marketplace interests.

The legislative proposal would require government offices to publicly disclose information they possess relating to their investments. This would include the name of any fund in which the office is invested, the year the fund was created, the dollar amount committed to the fund and the return on that investment. The law would also require government offices to disclose the recusal of any governing board member on the basis of his or her investments. Also disclosed would be fees, expenses and other compensation assessed against the government office.

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