Treasurer: Pa. pension chair Maiale needs to go, now
McCord cites Corbett failure, too
Pa. State Treasurer Rob McCord in a letter to Gov. Corbett and citing internal documents is calling for the replacement of longtime Pennsylvania State Employees' Retirement System chairman Nicholas Maiale. Excerpts:
"Recent allegations of possible improper behavior at SERS - as well as ongoing criticisms concerning Board operations and system management - make it imperative that you take decisive steps to improve SERS operations and business practices and restore the agency's reputation. While investigations will be needed to determine exactly what occurred and who is culpable, we cannot wait...
"Allegations originating from SERS employee(s) concerning the investment operations of SERS are both troubling and broad. These charges not only implicate SERS' Chief Investment Officer, but also explicitly include the Chairman of the Board and the process by which investment opportunities are identified and vetted, and also the veracity with which they are presented to the Board for approval...
"The manner by which your Office of General Counsel responded to the receipt of the original allegations falls substantially short of its obligation to the SERS Board – compromising the Board's ability to execute its fiduciary responsibilities....
"Unfortunately, as a result of the failure of your Office of General Counsel to immediately and fully inform the SERS Board of the allegations, and the unwillingness of the Board's Chairman to forgo delaying any consideration of the pending investment proposals, the Board was permitted to vote on investment decisions that were implicated by the allegations. There is no justification for such conduct. Such actions undermine public and annuitant confidence in the decisions of the SERS Board.
"A memorandum to the Office of General Counsel explicitly identified claims that implicate the Board Chairman – questioning his professional judgment, lack of confidence in his willingness to restrict the Chief Investment Officer's conduct, lack of independence, and desire to advance investment decisions based on political considerations. Though I acknowledge that these claims have not been independently proven, it is worthwhile noting that these claims originate from professional SERS staff and include explicit details.
"While the legal and investigatory process can and must be allowed to proceed at its own pace, SERS cannot wait. There is more than enough on the record right now to justify and require a change in the Board leadership you have appointed. This is an opportunity for you to help restore the reputation of the Board by immediately replacing the current Chair and selecting someone with a proven record of independence, transparency, and commitment to restoring public trust...
"The leadership of the SERS Board has not changed in more than twenty years. Change is overdue."
Maiale's office and SERS had no immediate comment.