Corliss Law Groups : Forum : Corliss Law Group Estate Plann..


[reply] [quote]

Corliss Law Group Estate Planning Law Corporation: Exclusive: Pa. pension officer retires; hidden $3M loss alleged

10 Years Ago


The chief investment officer of the Pennsylvania State Employees' Retirement System speeded up his retirement after a whistle-blower said he had engaged in personal investment trades at work and withheld news about a $3 million loss in a pension-fund investment, documents obtained by The Inquirer show.   The material shows that the whistle-blower first raised the complaints in April about Anthony Clark - one of the state's highest-paid employees, at $270,000 a year - to her superiors in the legal staff about the $26 billion pension system and to at least one of the system's board members.   Six months later, after those complaints triggered no action - Clark's lawyer calls them unfounded - she met with top lawyers on Gov. Corbett's staff and again leveled her accusations.   After taking almost a month to hire the Philadelphia law firm Stradley, Ronon, Stevens & Young to assess issues, the Corbett lawyers briefed the pension fund's acting counsel. The council then informed the board's longtime chairman, Nicholas J. Maiale, on the allegations and recommended he not say anything yet to Clark.   Disregarding that advice, Maiale told Clark about the complaint and urged him to take a leave of absence after the Thanksgiving holiday, the documents say.   In an interview with The Inquirer, Maiale said he went to Clark to avoid having him remain in charge of state investments with a cloud over his head, a situation Maiale said "would have been surreal."   Maiale also said he had "locked down" Clark's access to state computers.   But after learning that Maiale had told Clark about the allegations, Corbett's lawyers rushed to preserve Clark's e-mail and computer records "to protect the agency from the potential consequences of your un-counseled notification to Mr. Clark," a top state lawyer told Maiale in a letter Wednesday.   That letter, obtained by The Inquirer, was given to the SERS board Wednesday in a closed-door executive session in Harrisburg.   The board was also given Stradley Ronon's report reviewing the allegations and assessing whether they should be reported to federal securities regulators or the state ethics board. In its 14-page assessment, obtained by The Inquirer, the law firm said there was no requirement to report the situation to authorities at that time and urged further investigation.   On Thursday, state Treasurer Rob McCord, a member of the SERS board, called upon Corbett to remove Maiale as chair. McCord cited Maiale's failure to act more quickly on allegations of "possible criminal or unethical conduct" by Clark.   McCord, an announced candidate for governor in next year's Democratic primary, also lambasted Corbett's lawyers for not acting sooner.   In a sign of a widening partisan fight, Corbett's Office of General Counsel issued a statement Friday suggesting that it was McCord and other board members who had dropped the ball.   Want to read more?