State treasurer questions handling of probe
HARRISBURG — Pennsylvania’s elected state treasurer said in a letter obtained by The Associated Press on Tuesday that lawyers for Gov. Tom Corbett have mishandled an investigation into unspecified possible misconduct by the chief investment officer of the $26 billion state government employees’ pension fund.
The Dec. 4 letter from Treasurer Rob McCord to State Employees’ Retirement Board chairman Nick Maiale said he was troubled that the board’s own lawyer waited nearly a month to tell the board two days earlier about the allegations concerning the investment manager, Anthony S. “Tony” Clark.
McCord is among the Democrats seeking the nomination to run against Republican Corbett, who is seeking a second term. He said the delay by SERS acting chief counsel Victoria Page-Wooten called into question whether she acted properly as the board’s lawyer.
“Moreover, the failure by the governor’s Office of General Counsel to share the allegations of possible criminal and unethical conduct by the system’s chief investment officer during this two-month period resulted in the board’s consideration and/or approval of investment actions that involve billions of dollars based upon recommendations from the very person who is the subject of these allegations,” McCord wrote.
Page-Wooten said McCord’s letter was “very interesting” but declined additional comment.
McCord wrote that the board, which meets in Harrisburg today, should not hire an investment manager until it knows that the process is free of any conflicts. Office of General Counsel spokesman Josh Maus said in a statement that it fields allegations of impropriety on a regular basis and handles them seriously.
“That obligation is to gather the facts and uncover the truth, and is far greater than grabbing headlines,” Maus said.
Clark was put on paid leave two weeks ago after Maiale learned of the claims against him, and Clark subsequently announced his retirement as of the end of December. A message left for Maiale was not returned. McCord’s office said he would not comment about the letter.
McCord wrote that Corbett’s lawyers launched an investigation without telling the SERS board and “without clear political independence, without an explicit deadline, with an undefined scope and an uncertain final product.”
McCord said that “creates the appearance of ‘damage control’ rather than a thorough effort to uncover possible misconduct.”
The letter did not outline the allegations against Clark, who has held the $270,000-a-year job for nearly three years. Calls to a phone listing in his name in Arlington, Va., were not answered.
SERS released a statement that said Maiale was informed of the allegations late last month, after which Clark was not allowed to return to the office, did not have computer access and was placed on leave.
“If there is merit to the allegation, we are eager to discover and address it,” SERS wrote. “We are also eager, however, to ensure that conclusions are not drawn until a thorough, independent investigation has been completed.”
McCord said the board should hire its own outside lawyer to advise it and to recommend how to “ensure independent due diligence review of proposed financial investments, the performance of adequate conflict of interest checks, and prevention of the inappropriate use of confidential financial information of the board or the system.”
SERS meets in Harrisburg today, and spokeswoman Pam Hile said hiring someone to look into the matter was expected to be discussed.
McCord asked Maiale for information about when Page-Wooten learned of the allegations, what she did, who she told and why the SERS board was not informed immediately. He also sought from Maiale a copy of the “original written allegations.”