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Jennings is exploiting investment issue to score points
By Gilbert Gallegos
This column comes in response to a Thursday guest column about the growing investment scandal in New York and New Mexico written by Senate President Pro Tem Tim Jennings.
Not surprisingly, Sen. Jennings doesn’t know what he’s talking about. Nevertheless, he’s trying to exploit the issue to score political points.
First, the governor was not aware of any deals between fund managers and marketers. The state is not part of those deals, nor do we pay those fees, which are legal.
Second, the State Investment Council (SIC) helped improve and tighten the language for the bill requiring disclosure of third party marketers. This is very evident in the Legislative Finance Committee’s own bill analysis and fiscal impact report. The governor signed that bill.
Upon learning of the allegations regarding Aldus Equity in New York, the SIC began immediate due diligence, seeking full disclosure of third-party marketer and placement agent information from all outside investment managers.
Just weeks after the process began, the SIC called a meeting to discuss these concerns publicly, and released the information gathered so far to the public, while still assessing and gathering additional data.
Governor Richardson ordered the termination of Aldus by the SIC and Educational Retirement Board (ERB), as well as full revamping of policies and procedures by these investment agencies, which will require additional reporting, disclosure and transparency.
Of course, the governor just yesterday went beyond the law he signed and Sen. Jennings discusses in his letter. The governor directed SIC and ERB to ban the use of third-party agents to remove the appearance of a conflict of interest between the role of the private equity advisor to the state and fund managers that hire these agents.
While Sen. Jennings believes there should be more oversight of these investment agencies, it is important to note the performance of those agencies, particularly the State Investment Council.
Investment performance for the Land Grant Permanent Fund through the first quarter of 2009 placed it in the top 5 percent of public funds in the country. On a one-year and three-year basis, the performance is in the top 30 percent of public funds nationwide.
Gallegos is the governor’s deputy chief of staff.
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Gallegos wrote: “Not surprisingly, Sen. Jennings doesn’t know what he’s talking about. Nevertheless, he’s trying to exploit the issue to score political points.”
This is a personal attack and, coming from someone speaking as a representative of the governor’s office, it is unprofessional.
A CORRECTION: my bad. The year was 2005.
“Finally, did Sen. Jennings vote with the majority in 2003 when the legislature passed and Gov. Richardson signed the measure which allowed the State Investment Council, as well as the PERA and ERA, to change from traditional conservative investment instruments (bonds, mutual funds) to the high-risk hedge funds and credit swaps.”
It is bizarre that Gallegos says “…nor do we pay those fees, which are legal.”
1. Of course we pay those fees–it’s just wrapped into the fees we pay the investment advisor.
2. “Which are legal”–if Gallegos is so certain that we don’t pay the fees, then why even assert they are legal.This is the old “either,or” legal talk. The issue is whether the finders fees were paid (which is yes) and then were the campaign contributions made by these investment “finders” pay for play.
3. Finally, it is laughable when Mr. Gallegos mentions the actions of “reform” as to timing. Richardson is acting now, when the story broke in December. It took them between two and three weeks after the indictments in NY.
4. Finally, not releasing what information is being sought has got nothing to do with “impeding the investigation”. This is Orwellian talk. the observer
A COMMENT: Sen. Tim Jennings should change political parties. He isn’t a democrat (that’s with a small “d”), he is a conservative republican (that’s with a small “r”). And, he certainly shouldn’t be leading the New Mexico State Senate.
The last person we want to do an investigation of PERA and ERA is Sen. Tim Jennings. Why? Because he, along with Sen. John A. Smith, is determined to change PERA and ERA from defined benefit retirement plans to defined contribution plans. This isn’t a good thing. Just look at all the defined contribution plans that recently went over the cliff.
In addition, Sen. Jennings voted to force ERA and PERA members to contribute even more of their hard-earned money to these badly managed retirement funds by voting for Rep. Kiki Saavedra’s House Bill 854.
854 will increase the retirement deductions of state employees and public education employees come July 1, if the measure is not repealed.
FYI, direct action is underway to demand that state legislators repeal 854 when they meet in special session late summer or early fall.
Finally, did Sen. Jennings vote with the majority in 2003 when the legislature passed and Gov. Richardson signed the measure which allowed the State Investment Council, as well as the PERA and ERA, to change from traditional conservative investment instruments (bonds, mutual funds) to the high-risk hedge funds and credit swaps?
In Tim Jennings long history in the New Mexico State Senate he has not known to be one for “scoring points”. In fact I have never met a man more comftorable in his own skin.
Good for Senator Jennings, the Office of the Governor and/or the Governor has always taken the most egregious and unethical means of pursuing their path!
Gilbert Gallegos should take a step back and ask himself who is really trying to score points!
GALLEGOS, GILBERT E. JR.
ALBUQUERQUE, NM
87113 STATE OF NEW MEXICO/COMMUNICATIONS $500 09/30/2007 P RICHARDSON FOR PRESIDENT INC. – Democrat
GALLEGOS, GILBERT E JR.
ALBUQUERQUE, NM
87113 STATE OF NEW MEXICO/COMMUNICATIONS $500 06/30/2007 P RICHARDSON FOR PRESIDENT INC. – Democrat
GALLEGOS, GILBERT E JR.
ALBUQUERQUE, NM
87113 STATE OF NEW MEXICO/COMMUNICATIONS $500 05/31/2007 P RICHARDSON FOR PRESIDENT INC. – Democrat
Another fine exampe of yet another overlooked scandal. Shall we call it “Pay to work”.