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.