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Pa. pension board: We'll hire investigators

Rejects call to freeze investments in wake of investment chief's abrupt departure

More in my article in today's Inquirer here. Yesterday: The Pennsylvania State Employees' Retirement System board voted today to choose what it called an "independent" review firm to "provide a comprehensive and timely assessment of and advice about how to proceed with regard to allegations" against Chief Investment Officer Anthony Clark, who has elected to retire at the end of the year, after the SERS board locked him out of his office last week due to allegations against him which the board has declined to describe in detail.

The board also agreed to "an independent and exhaustive review of SERS' due diligence process within the investment program." But members voted 7-4 against a proposal by State Treasurer Rob McCord that would have stalled the pension system from continuing to hire new money managers until a detailed review is complete. (McCord's motion did not also call for a delay in replacing Clark, as an earlier version of this item wrongly stated.)

Voting for the stricter proposal from McCord, a Democrat who wants to run against Corbett in next year's gubernatorial election, were State Sen. Vincent Hughes, D-Phila., State Rep. Dan Frankel, D-Allegheney, and David Fillman, executive director of AFSCME District Council 13, a government workers' union. McCord has written a letter to longtime SERS Chairman Nicholas Maiale protesting what McCord says is a failure by lawyers for SERS and the Corbett administration to disclose the allegations against Clark when they surfaced in October (updated).

In a letter to Maiale, McCord wrote that the board should have been notified of the allegations against Clark immediately, and that the delay means the process by which Clark continued to hire and pay private managers for portions of the state's $25 billion pension investment portfolio have now been tainted by possible conflicts of interest, and need a thorough revamping before the state resumes hiring private firms. Chairman Maiale, a former Democratic state representative from Philadelphia, has rejected McCord's arguments and, with the rest of the board, including appointees and allies of Gov. Corbett, voted to replace Clark and keep hiring new managers.