HARTFORD, Conn. - Even in departure, Connecticut State Treasurer Christopher B. Burnham continues to set himself apart from his predecessors.
Every Connecticut treasurer since 1958 has left office in midterm, but probably none as controversially as Mr. Burnham.
The latest brouhaha occurred with the resignation of Pacific Investment Management Co. as a bond manager for the $15 billion State of Connecticut Trust & Retirement Fund. The firm resigned last week after Gov. John Rowland urged Mr. Burnham to end the relationship between the fund and the money manager because of a perceived conflict of interests.
PIMCO Advisors L.P. is the parent of PIMCO and Columbus Circle Investors; last month, Mr. Burnham announced he was leaving the treasury to join Columbus Circle as chief executive officer.
Columbus Circle resigned late last month as an equity money manager for the Connecticut pension fund. Mr. Burnham hired the firm last year, giving it $150 million. But PIMCO remained a manager for the retirement system (Pensions & Investments, July 7).
Although Pacific Investment was hired by a previous treasurer, Mr. Burnham did give the firm additional money to manage when he restructured the pension fund last year.
"You were wise to cancel the contract won by Columbus Circle Investors, but the fact that its sister company - Pacific Investment Management - is a contractor with your office came as a surprise to many persons, myself included," wrote Gov. Rowland. "I fear that the continued relationship between the treasurer's office and Pacific Investment Management Co. will cause irreparable harm to you and your office.
"Accordingly, I request that you cancel the contract immediately."
Responded William Thompson, PIMCO's chief executive officer: "(W)e have decided that the questions and criticisms that have been raised in recent days about the hiring of incumbent Treasurer Christopher B. Burnham by Columbus Circle Investors, an autonomous entity sharing common ownership with PIMCO, have made it appropriate to submit this (resignation) letter."
Mr. Burnham concurred, writing to Gov. Rowland that "the integrity of the office of the treasurer is more important than any one contractual relationship," and he accepted PIMCO's resignation.
Integrity and ethical issues are surfacing again, hoverer, as it was learned that Mr. Burnham traveled to San Diego early last week to attend the National Association of State Treasurers.
"He doesn't see a conflict at being at this conference," said Patrick O'Neil, a spokesman for Mr. Burnham. "He is not making decisions on behalf of Columbus Circle Investors or the state at this point by being there."
Partisan politics also reared its head when Mr. Burnham, a Republican, decided to remain in office long enough for the Democrat-controlled Legislature to go out of session and allow Mr. Rowland, also a Republican, to select Mr. Burnham's successor.
Deputy Treasurer Paul Silvester will complete Mr. Burnham's term. Mr. Silvester said he will not run for re-election in 1998, which supposedly placated the Democrats, who were maneuvering to extend the session and have a role in the selection of Mr. Burnham's successor.
A spokesman for Mr. Burnham downplayed the political gamesmanship.
"He wanted to give the governor opportunity to appoint someone who would maintain the continuity," said Mr. O'Neil.
Meanwhile, a state Ethics Commission report advised Mr. Burnham to refrain from taking any actions that might disadvantage a competitor to Columbus Circle or benefit his new employer.
And a new draft audit report cited the lack of a contract with Morgan Stanley & Co., New York, which was used to execute a $20 million principal trade when the pension fund was restructured in 1996.
Mr. Burnham exploded on the national pension stage in 1994 when running for state treasurer, and he stayed in the spotlight with his pronouncements and the bold changes he made to the Connecticut pension fund.
He dismissed 10 treasury staffers and eliminated a total of 15 positions, including the department's internal securities trading desk, as a cost-cutting measure, in early 1995.
He asked all of the pension fund's 69 money managers to submit letters of resignation in February 1995 as a precursor to a massive restructuring of the fund.
He eliminated the pension fund's emerging manager program that had received national acclaim.
He successfully got legislation passed that prevents future treasurers from raising money from financial services firms that do business with the state.
He unsuccessfully pushed for legislation to change Connecticut's pension fund from a sole trustee structure to one with multiple trustees.
He hired Robert Evans, former Xerox Corp. pension fund chief investment officer, as consulting chief investment officer for Connecticut's pension fund.
He reduced the pension fund's number of equity and fixed-income money managers to 22 from 57 in two restructurings and choosing to index the bulk of the marketable securities owned by the fund.
He parried a proposal by Connecticut lawmakers that sought to give the state lottery to the pension fund as partial payment for the state's fiscal year 1996 cash contribution.
He consolidated the pension fund's separate account real estate investments with one real estate money manager and sold its commingled fund interest to a buyer of secondary partnership interests.
The deal was precedent-setting for the liquidity it injected into pension fund real estate investments.