Some pension fund officials are scrutinizing American Express Asset Management, Minneapolis, after the company settled charges that it improperly paid for trustees' meals and other freebies at the Ohio Police & Fire Pension Fund.
Yet, the company's real problem seems to be clients heading for the exit due to disappointing returns. Even the pension fund at the center of the flap terminated the firm because of poor performance.
The $9.6 billion Ohio Police & Fire fund, Columbus, ended its six-year relationship with American Express Asset Management in June, said spokesman David Graham. The firm ran a $418 million domestic large-cap core equity portfolio for the pension fund.
Performance aside, the two parties recently settled another sticking point. The money manager has paid the Ohio fund $39,680 for giving gifts to trustees. Northwinds Marketing Group LLC, a third-party marketing firm spun out of American Express Corp., New York, two years ago, paid $84,320. Each firm also gave $20,000 to the Ohio Ethics Commission to cover their share of the investigation costs.
While checks were not cut until recently, the settlement with the State of Ohio and the Ohio Ethics Commission was reached in January.
"All parties mutually agreed to bring this matter to a close," said American Express Financial Corp. spokesman Paul Johnson. He declined to comment further.