A deputy state attorney general says there’s no way, yet, to determine how much money from the Iowa Public Employees Retirement System was lost by Westridge Investments, the firm which was shutdown by federal regulators last month.

That firm at one point held over $300 million in funds from the state-run retirement system, which is known as IPERS. Deputy Attorney General Jeffrey Thompson told the IPERS board this morning that there should be no expectation IPERS will recover 100-cents of every dollar invested, partly because all stock market values have dropped in the past year. “Let’s be cautious about which way we jump on this so we know that we’re taking the actions that are appropriate to protect our interests,” Thompson said.

On February 25, a federal judge froze all Westridge Investment funds. According to Thompson, an experienced company was appointed the receiver. On April 27 that company will release a report detailing what’s happened to the assets in the trading pool where IPERS money was invested. Thompson has been talking once a week with the agents who are working on that report. ”We know there were assets there. We know that were securities purchased. We know that the business of the doing arbitrage that we invested in was ongoing and they were, in fact, trading,” Thompson said. “That’s very important to us.”

The investment pool was started in 1997 and when it was shut down, IPERS was the single largest client in the group of investors. ”I can’t stress enough that what we really have to be right now is patient,” Thompson told the IPERS board. “We have confidence that things were locked down quickly and that the professionals are on it and the judge is paying attention and to do anything to disrupt that really risks putting ourselves adverse to the court and to the receiver and that is not in the best interests of the retirees and of the fund.”

Thompson suggests it’s impossible, at this point, to determine whether there were “red flags” that might have hinted the investment firm’s top managers were diverting money to help finance their lavish lifestyle. About 85,000 retirees were getting IPERS checks at the end of 2007 and thousands of current government workers — including teachers — are paying into the pension system.

State Senator Steve Kettering, a banker from Lake View, is a member of the IPERS board. Kettering wasn’t surprised when he heard the Westridge managers were using the investment funds to buy things like collectible teddy bears. ”In good times these type of schemes can go on for great extended periods of time,” Kettering says. “It’s when times change and it goes neutral, it goes down and there’s no ability to cover their tracks that these types of events get exposed.”

Thompson is working on another high-profile case — the lawsuit against the state which was filed by bar owners who hope to overturn the state’s ban on smoking in bars and other public places. While IPERS has a private law firm working on this case as well, Thompson’s now serving as the chief litigator. ”I’m the hit man who’s been brought in to work on this particular problem,” Thompson told the IPERS board this morning.

You can listen to Thompson’s presentation to the board and questions from board members by clicking on the audio link below.

AUDIO: IPERS board mtg 38:00 MP3