Chapter 2: Cover Up of Whistleblower
IN THIS LESSON
Executive Board (eboard)
8-26-26
The Executive Board has oversight of the South Dakota Investment Council (SDIC) and Dept. of Legislative Audit. Chris Karr is Chairman and Jon Hansen is Vice-Chair.
This is the South Dakota Statutes of the Executive Board Powers and Duties:
SDIC Board Meeting
There was an SDIC Board meeting that started 1 hr before the Eboard Subcommittee meeting.
Renae asks 3 simple questions during the Public Comment. Results in video below.
SDIC Board answering simple questions.
SDIC Subcommittee Meeting
Chris Karr teleconferenced in for the SDIC Subcommittee hearing that was not recorded or didn’t have any subject matter on the Agenda. The Subcommittee hearing was really no different than the SDIC Performance and Budget part of the full Eboard hearing that was recorded.
Of Note: Chris Karr says for the Public Testimony part that “If you are not going to be testifying at the Eboard hearing then you can testify now, otherwise you can testify at the Eboard hearing.” Of course, Renae wanted her testimony to be in the recorded session, so she didn’t testify at the Subcommittee. But then when she gets to the recorded Eboard meeting, Jon Hansen interrupts that testimony because it was not specific to SDIC Performance & Budget on the current agenda. Renae said it had to do with the trustworthiness of the presentation, which he seemed to not be very interested in, so she tweaked it a bit to hit the error in the Asset Allocation model that was one of the things she was likely fired for whistleblowing about, so he did let her finish on that. But it did feel like they had planned that out to block that testimony all together. Here is the docs uploaded the day before that they may have been trying to avoid being made public.
SDIC/SDRS Performance & Budget Meeting
Chris Karr and Jon Hansen discuss how they are going to do public testimony.
Renae had emailed both of them 5 days before to ask how the public testimony would proceed, but they never replied back.
Start of Hearing. Rules of Public Comment.
Kelly Meiners-SDIC Board Chairman and Matt Clark-State Investment Officer speaks about SDIC Performance & Budget Request
Kelly Meiners explains the SDIC Board and Management structure.
The next part takes Matt Clark about 45 minutes to explain, so will condense down to the more meaningful points.
First, he warns that he expects a severe market downturn in the future.
Which SDRS is warning will result in pension cuts in the future.
He then discusses the SDIC asset allocation vs. the benchmark.
He then shows a graph of 1, 5, 10, 20 yr performance with all negative, and a 30, 50 yr performance to show some barely positives.
He mentions the main reason the performance looks so bad is because some good years a long time ago rolled off.
“It all went off the rails”
Renae fully agrees with the above statement.
He then shows graphs of the 5 and 10 yr rolling average performance that proves Renae’s claim that the error in the Asset Allocation model started creating problems around 2014 when stock buybacks become high. But he does not spin it that way.
He says, “Why do you keep following the contrarian asset allocation approach if it’s killing you so bad? Well, because it has added value over the long term and we retain our faith in it.”
Renae happens to know that most of the staff has lost faith in Matt Clark’s asset allocation model, but they are not allowed to talk about it.
He says, “We’re more cautious than other’s while the market keeps going up and then boom, something will change and it will swing hard the other way and you will get a huge win quickly.”
Matt Clark will get a huge win in bonus. He has already warned earlier about a coming severe market downturn, which Travis Almond will later warn that a severe market downturn will likely result in pension cuts to stay 100% funded. So SDRS members will not win, but Matt Clark definitely will.
He says, “The original version of the modeling process, and I developed that way back then. We have continued to evolve it modestly over the decades, the model we have now, because I don’t track the performance of the different iterations that have gone along the way.”
Interesting that he tells us to rely on the performance of the model decades ago, but can’t prove all the changes that he has made over that time wouldn’t change the fitness of the model now.
They then talk about how Matt Clark, State Investment Officer is the only investment professional in the office that only gets a 200% max bonus, instead of the 225% that the others get is because of the optics of the COLA cuts, but the Chairman of the SDIC Board assured the EBoard it had nothing to do with his job performance.
The SDIC Board seems perfectly fine with all the negative performance, COLA cuts, error in asset allocation model, questionable yen trades, managers lying to each other and firing whistleblowers.
“We have some retirements and other turnovers that has caused some youngsters to be hired.”
Wonder what he meant by “other turnovers?”
SDIC Presentation Highlights
Renae has to adjust a bit as Jon Hansen knew what she had uploaded and planned to say, so created rules to block alot of it.
She starts with spinning it about trustworthiness of the presentations, “alert the Executive Board of EXTREMELY concerning behavior of Matt Clark, SDIC Management (Tammy Otten, Chris Nelson, Jan Zeeck, Darci Haug, Jarrod Edelen) and the SDIC Board in my being fired for whistleblowing about a collapse of internal controls and the actions Matt Clark, SDIC Management and the SDIC Board took in preventing an investigation into the incident and actively trying to cover it up.”
Chairman interrupts as he doesn’t think the public would be interested in the trustworthiness of the SDIC and Renae can only talk about Performance.
So Renae spins the formula error she found in the Asset Allocation model that Matt Clark refused to let us fix and was likely a reason she was fired for whistleblowing is a cause of the underperformance over the last decade.
“Matt Clark’s investment performance is negative for the last 20 years of his entire career of being the State Investment Officer from a starting point of significant outperformance when he began. It is likely from a formula error I found in the Asset Allocation model pertaining to stock buybacks that he refused to fix. This led to severe underperformance when stock buybacks became high and sustained around 2014-2024. Other concerning model quality issues in the Currency model and Emerging Market model also contributed to underperformance. So this underperformance of the last 20 yrs is not due to conservatism, but low model quality and reckless investment/management behavior. With the collapse of internal controls that I was fired for whistleblowing about, there is also likely a fraud going on.”
Renae’s 1st Public Testimony
Aaron Aylward asked a good question whether SDIC does FX (foreign currency) trading and what bucket that would be in?
It take Matt 4 minutes to explain this.
Matt explains that they occasionally hedge currencies if they are expensive or cheap vs. it’s history or if it is very cheap based on his long-term valuation model.
This is based on a very questionable currency model he developed.
Matt Clark’s basis for “long-term” is eternity, so he is never actually wrong, it just hasn’t been enough time to work yet. (See 20yr performance is negative, but the 53 yr is positive, so that is the justification of his genius.)
Or in extreme times, we will consider either buying extra currency to make up for not having enough stock exposure given how cheap the currency or to hedge the currency if we are worried it will hurt our performance.
We did the Yen trade on 3 month forward contracts that had the widest cost of carry (-6%), whereas the 2 yr forwards were half that. Renae asked Jan Zeeck if we could do that to reduce the hemorrhaging of losses, but she said no. Japanese equities were yielding about +1% at the time, so Matt Clark should explain how this is a hedge for anything.
Long story short answer. Yes, SDIC does occasionally trade currencies and they are hidden in the equity returns bucket.
Aaron asks whether they use stop-loss on trades.
It takes him a 1.5 mins to answer this, but the answer is no.
Foreign Currency Question and Answer
Chris Karr then showers the SDIC and the State Investment Officer with praise about how principled and trustworthy they are and concerned the EBoard might be too conservative with the State Investment Officer pay.
Renae Randall’s “SDRS/SDIC Whistleblower” bright yellow hat can be seen in the bottom right corner which was the front center of the audience seating.
Mulder then comments that he agrees with Chris Karr.
Chris Karr and Brian Mulder shower SDIC with praise
Travis Almond, SDRS Executive Director, discusses the funding status of the South Dakota Retirement System (SDRS).
Travis admits that the SDRS is operated differently than any other plan with fixed contributions and variable benefits. And statutes that require it to be 100% funded through “corrective actions” which he admits are just pension cuts.
The presentation slide warns if the market drops, pension cuts will be required.
SDRS Presentation
Renae testifies during public comment. Jon Hansen reiterates that she can only talk about SDRS funding status and nothing else.
A discussion is had if the trustworthiness of the presentation is in bounds of what Renae can talk about as Chris Karr made a big statement about how trustworthy Matt Clark and the SDIC was. Jon decided she can speak and he will stop her if she go out of bounds in her trustworthiness testimony because he wants to make sure not too much of that is discussed. Jon is very strict about public testimony procedures, but seems more lax on his oversite of the SDIC responsibilities.
Renae squeezes in a question about being demoted for Jan Zeeck lying to her about the Yen trade, and Jon was sure that Renae was not allowed to ask that question at this hearing.
Aaron Aylward, Renae’s D6 representative, asks Jon Hansen if Renae can’t speak at this hearing what avenue can she speak in? Jon says that it would have to be on the Agenda for her to speak about the whistleblowing situation.
Renae’s “situation” as everyone on the EBoard knows is that she has been blocked by several oversite entities from reporting the whistleblower firing, the state lawyer/SD State Bar President has blackballed her from getting a lawyer, the Treasure has blackballed her from getting a job in finance and she is suffering from cyberattacks from the State of South Dakota.
So Jon does let Renae speak a bit about the trustworthiness issue about the numerous Conflicts of Interest on the SDRS Board, but not too much. Jon Hansen, Speaker of the House, says he is completely powerless to make the SDRS Board put the audio of the June 4 2025 meeting back on public record after deletion. But does say that he does want to hear more about her whistleblower firing, just not at this time.
Renae mentions that she had emailed Chris Karr and Jon Hansen five days before this hearing of how the testimony was going to work, but they never replied back. Jon shrugged, and ended discussion.
2nd Renae Testimony
Russ Olson then presents the Legislative Audit budget request. His main request was to bump up starting salaries for entry-level auditors.
Renae then does public testimony:
Renae speaks her full testimony on Dept. of Legislative Audit. Jon Hansen does not interrupt or stop her this time.
Renae asks Jon if he is interested in her whistleblower report, can she contact him. Jon says “absolutely.”
Senator Mehlhaff mentions that he saw Renae’s Whistleblower Billboard in Ft. Pierre earlier this year and took a picture of it and forwarded it to the AG to look into it, as the AG had gotten alot of Internal Control and Whistleblowing laws passed recently. He then asks if the AG ever contacted me about it.
Renae discusses how Hank Prim (SDRS Board member) was her AG contact, but after she sent the Notice of Claims of Wrongful Termination that Sara Frankenstein from GPNA Law firm sent her, Hank never contacted her again after that. So last contact with the AG office was on Oct. 14, 2025.
Aaron Aylward then asks for a run down of the steps Renae has gone through to try to report her being fired for whistleblowing, but Chris and Jon decide that would be too much information to discuss at this time.
Chris and Jon discuss how they can’t put something like this on the agenda unless there was enough interest or to build a coalition to put something like that on the agenda just like legislation.
Note: Chris Karr was the first legislator that Renae notified about her whistleblower firing and error in the Asset Allocation model effecting investment performance around Christmas 2025 and Jon found out about her whistleblower firing by Feb 5, 2026 Retirement Laws Committee Hearing, but neither have ever replied back to her or contacted her in any way by this hearing on Aug 26, 2026.
The EBoard has oversite responsibilities of the SDIC and Legislative Audit, but apparently one needs to build a coalition and possibly hire a lobbyist to force them to actually do the oversite part.
Jon then encourages Renae to re-engage the AG office that has refused to reply back to her and may have been a participant in the cyberattack against her.
Aaron then asks that in order for him to get this on the agenda for the next meeting, will he have to get an agreement with everyone on the committee. Chris replies back that he doesn’t need everyone, but would need broad agreement to discuss the topic, because they would need to make sure it wasn’t a waste of their time or tax-payer money.
The topic is the trustworthiness of the SDIC/SDRS and Leg. Audit and the likely fraud at the SDIC and fraudulent FY25 Audit from Leg. Audit of which the Executive Board has oversite responsibilities. But Chris and Jon feel that a whistleblower report about a likely fraud at the SDIC and fraudulent FY25 Audit isn’t part of those oversite responsibilities.
3rd Renae Testimony
Senator Mulder and Gosch then shower Russ Olson and Legislative Audit with praise.
Senator Mulder and Gosch showering Russ Olson and Legislative Audit with praise.
EBoard then approves the Legislative Audit budget request.
EBoard then goes into Executive Session for an evaluation of the Auditor General, Russ Olson.
When out of Executive Session, they approve giving Russ Olson a raise.
Fraud Report sent to Dept. of Leg. Audit before FY25 close. They never looked into it and issued a clean audit. This makes the FY25 Audit likely fraudulent.
SDIC illegally changing their Whistleblower policy to something different than state law in Nov 25 after Renae refused to sign NDA. Staff can only report to the people involved in sending Renae Randall an NDA. This should result in a FY26 “Adverse Opinion” from Dept. of Legislative Audit.
Renae is concerned that Executive Board may not make her documents publicly available, so she has made them publicly available throughout this page and at the bottom of this page.
Prediction: The SDRS/SDIC Whistleblower reporting story is going to be the most famous and laughed at case study in college-level finance.