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The Public Safety Personnel Retirement System chairman and vice chairman were stripped of their leadership positions on Thursday, after The Arizona Republic reported the two trustees had business dealings with a former director of the pension system.

Chairman Will Buividas, a Phoenix detective, and Vice Chairman Mike Scheidt, a Tempe firefighter, will, however, remain on the board that oversees the pension system for judges and first responders despite calls for them to step down.

Before the board reached that decision, a group of retired Phoenix police officers, the 780-member Foundation of Retired Police Officers, called for the ouster of Buividas and Scheidt.

Buividas and Scheidt later told The Republic that they would not resign and declined additional comment.

Carl Richardson, of the Foundation of Retired Police Officers, said if Buividas won’t resign, he hopes Phoenix Police Chief Jeri Williams would pressure the detective to step down.

Before the board voted to strip the trustees of their leadership positions, it met in executive session to discuss Buividas and Scheidt earning thousands of dollars assisting former Administrator Jared Smout’s purchase of a home in 2018. Buividas and Scheidt have side jobs as a loan officer and Realtor, respectively.

Smout’s attorney has said Buividas approached Smout about representing him in the real estate deal and then brought in Scheidt.

In the months that followed the real estate deal, Smout approved travel expenses for the two board members to stay at upscale hotels during out-of-state investment conferences, records obtained by The Republic show. In early 2019, Buividas, Scheidt and the rest of the PSPRS board approved a retroactive raise for Smout that boosted his annual pay to a quarter million dollars.

Buividas and Scheidt have said they did nothing wrong by being involved in the real estate transaction or in their travel expenses to represent PSPRS.

Smout was fired last year after he admitted to sexually harassing and spying on staff.

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On Thursday, t??????he trustees voted unanimously to appoint Scott McCarty as PSPRS chairman. McCarty is finance director for the town of Queen Creek.

It’s the first time since 1998 that a person with financial experience will chair the pension system for first responders, elected officials, judges and correctional officers. The board since 2009 had been led by a police officer of firefighter.

The trustees also elected Harry Papp, who has 38 years of experience in portfolio management and security analysis, as vice chairman. 

Papp also will lead a newly created governance committee. Papp said the committee will investigate issues uncovered by The Republic as well as several others he declined to identify. The new committee also was authorized to hire outside counsel to conduct an investigation. 

Phoenix City Councilman Sal DiCiccio, a longtime critic of PSPRS, said in an interview Wednesday that Buividas and Scheidt should resign.

“This kind of backroom dealing is just the tip of the iceberg,” DiCiccio said.

Gov. Doug Ducey and Republican legislative leaders appoint the nine-member PSPRS board, who are volunteers.

Former Arizona Senate President Andy Biggs, now a U.S. congressman, appointed Buividas to the board. His office did not respond to a request for comment.

Former Arizona House Speaker David Gowan, now a state senator, appointed Scheidt to the board. He did not respond to a request for comment.

The Governor’s Office also declined to comment.

During the past decade, the $11 billion trust has been beset with poor to modest investment returns while benefits have been enriched for retirees. It now has less than half the money it needs to pay for all current and future retiree benefits, causing governments across Arizona to make larger payments to the trust. That has left fewer tax dollars for other public services.

Have a tip on investigative stories? Reach the reporter at [email protected] or 602-444-8478 or on Twitter @charrisazrep

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