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Endowments and Foundations

4 members of New Mexico State Investment Council sanctioned

Four members of the New Mexico State Investment Council, Santa Fe, have been sanctioned for refusing to sign an acknowledgment of the council's new code of conduct.

The council voted 7-2 on Tuesday to bar the council members — Tim Jennings, Leonard Lee Rawson, state Treasurer Tim Eichenberg and Land Commissioner Aubrey Dunn — from attending matters in executive session and for voting on those matters. Under state law, only litigation and personnel matters can be discussed in closed session.

At the meeting, Mr. Rawson said he is fine with the code of conduct but did not want to sign it.

"The code of conduct is a muzzle," Mr. Dunn said in an interview. He said the code would prevent council members who sign it from discussing in public issues such as with which money managers and consultants the council has settled as a result of its pay-to-play litigation.

In 2011, the council filed cases in state and federal court against individuals and firms for kickback schemes involving council investments from 2003 to 2009.

The code of conduct would not prevent council members from discussing in public settlements in its pay-to-play litigation, said Charles Wollmann, council spokesman.

"All pay-to-play settlements are and have been disclosed and voted on in public session," Mr. Wollmann wrote in an email. "We have not subsequently invested with any managers or entities with whom we have settled."​

Mr. Dunn, who is running for Congress, also said the code of conduct would bar him from discussing a claim by a female employee that she was being paid less than her male colleagues, which resulted in a financial settlement.

A letter dated March 3 to Evan Land, general counsel at the State Investment Council, from Jack Sullivan, acting general counsel for the State Land Office, provided a legal argument as to why the code of conduct might violate the state constitution.

"While Commissioner Dunn fully supports the notion that SIC members have a fiduciary duty to refrain from using confidential information regarding SIC investments or potential investments to benefit themselves or others, the proposed code of conduct goes beyond those concerns," the letter states.

Mr. Dunn said he expects the four sanctioned members will sue the council.

Efforts to contact the other three council members were not immediately returned.

The council oversees $22.3 billion in endowment funds.