I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
Gov. Bill Richardson will lose control of the State Investment Council while the State Investment Officer no longer could hire and fire fund managers under legislation that cleared the Senate on Friday evening.
Senators voted 37 to 0 to dramatically re-structure how the Council (SIC) is governed after increased scrutiny of the agency.
The unified vote comes after a drumbeat of revelations has put the agency at the center of an ever-widening investment scandal with ties to New York and California. It also has become the subject of a Securities and Exchange Commission probe and a federal criminal investigation looking into pay-to-play allegations.
“This unanimous vote in New Mexico is historic,” said Sen. Cisco McSorley, D-Albuquerque, moments after the vote. “It sends a message that we want to clean this up. We are united and we will stand behind Sen. (Tim) Keller and Sen. (Steven) Neville.”
The bill now goes to the House.
Among other things the bill that cleared the Senate would remove Richardson from the State Investment Council and give the Legislature more say over who sits on the board.
Other changes in the legislation include:
The move to remove hiring and firing powers from the State Investment Officer comes after revelations that Gary Bland made decisions on advisers and outside managers that the State Investment Council itself did not know about.
Bland, the former State Investment Officer, resigned in October after New Mexico’s former investment adviser pleaded guilty to securities fraud in New York. As part of the plea deal, Saul Meyer of Aldus Equity admitted to pushing certain deals to New Mexico’s two investment agencies — the SIC and Educational Retirement Board —because politically connected individuals here recommended them.
Meyer didn’t name names. But Bland, who helped in hiring Meyer, appeared to be close to two people well known by now to those following New Mexico’s investment scandal: Marc Correra and Anthony Correra.
Marc Correra shared $22 million in fees over half a dozen years, according to spreadsheets provided by both the SIC and ERB. The huge amount of fees has provoked outrage from state lawmakers and others in recent months, fueled in part by some investments that have failed, costing the state more than $100 million by conservative estimates.
Marc Correra is the son of Anthony Correra, a friend of Richardson who was involved in the hiring of Bland, the former top staff member at the State Investment Council.
The elder Correra appears to have had a role in the hiring of Bland becoming the state investment officer.
No one in law enforcement has accused either Correra of wrongdoing. And Marc Correra’s attorneys in the past have said he worked hard to earn the fees he was paid.
Other changes contemplated in the bill passed by the Senate would require more investment expertise among SIC members, so that they possess greater know-how to assess investment decisions.
In essence, the bill de-centralizes authority and removes the chances for conflicts of interest, lawmakers have said.
“These practices all come from good government practices,” said Keller, D-Albuquerque, one of three sponsors of the bill.
The bill takes some cue from a just-completed outside review of the State Investment Council that recommended significantly reducing the governor’s power over the agency.
That report found that Richardson’s influence over the State Investment Council “is more far-reaching than it is for governors in most of the 14 other states with similar funds,” according to Chicago-based consulting firm EnnisKnupp.
In addition, decisions on how to invest New Mexico’s $13 billion worth of endowment funds were made internally and largely without scrutiny from the board appointed to oversee the state’s portfolio, the report said.
The reforms the bill envisions for the State Investment Council also bear a passing resemblance to changes corporate boards across the country underwent following the disastrous Enron collapse. Under the Sarbanes-Oxley act of 2002, which was a response to Enron, WorldCom and other big company failures, corporate boards took on more responsibility for the financial health and oversight rather than leaving that up to executive staff.
Over the past two years, a similar upending has occurred in the investment world, partly due to institutional investors like the SIC, ERB and pension funds nationwide making bets on complicated investment tools that promised great returns but instead went sour.
The bill that passed the Senate has a competitor in legislation that would give the Legislature more say over who sits on the State Investment Council.
Earlier this week senators voted 33-4 to overturn Richardson’s 2009 veto of that legislation, which was sponsored by Neville. That legislation already is in the House.
For that override to become law the House must also override the governor’s veto by a two-thirds vote of those present.
