Tuesday, February 9, 2016

Treasurer rips Corbett lawyer 'damage control' in pension probe

McCord rips into chief investment officer scandal

Treasurer rips Corbett lawyer 'damage control' in pension probe


Update on the Pa. State Employees' Retirement System investigation of its Chief Investment Officer, Anthony Clark, who stepped down last week (see my story in Saturday's Philadelphia Inquirer) after SERS said it would review allegations of unspecified improper actions: "I am extremely troubled," writes state Treasurer Rob McCord, in a letter to 22-year veteran SERS chairman Nicholas Maiale, that SERS's chief counsel "appears to have waited almost a month to alert the Board to the existence of these allegations." Clark does not face charges. He didn't respond to efforts to reach him last week. McCord is among the Democrats hoping to run against Corbett for governor next year.  

Also from the treasurer's letter: "The failure by the Governor's Office of General Counsel to share the allegations of possible criminal and unethical conduct System's Chief Investment officer during this two-month period" left SERS taking advice on "investment actions that involve billions of dollars based on recommendations from the very person who is the subject of these allegations. Denying the Board the benefit of this information under such circumstances is both inexplicable and unacceptable," McCord added. (Emphasis in original.) 

The Governor's counsel's decision to hire outside lawyers to review the case without telling the board "is equally dismaying" and "creates the appearance of damage control rather than a thorough effort to uncover possible misconduct," the letter continues.

McCord went on to demand detailed information about the action of the governor's lawyers since the case came to light. And, citing the "cloud that currently hangs over the system's investment manager selection process," he demanded a "complete review" of that process, and possible reports to law enforcement and the Pennsylvania Ethics Commission, before a replacement for Clark is hired.

It's not the first time Corbett, who won election as the state's attorney general before serving as governor, has seen his critics claim his office didn't move as rapidly as they wanted to review alleged wrongdoing. He has also been a target of critics of the way the state didn't act more quickly in response to the Penn State child abuse allegations that eventually rocked the university and led to the firing of its president and its football coach. Corbett has vigorously defended his office's record in regard to Penn State. 

The SERS board meets Wednesday. The Clark matter is supposed to be discussed by the audit committee, behind closed doors.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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