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Corliss Law Group Estate Planning Law Corporation: Exclusive: Pa. pension officer retires; hidden $3M loss alleged10 Years AgoThe 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.
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