New York state Comptroller H. Carl McCall should open the investment decision process of the New York Common Retirement Fund to the public and allow reporters to attend the meetings he holds with the investment advisory committee and the real estate investment advisory committee.
The current process - where press spokesman Steven Greenberg takes a reporter's call, then calls John Hull, the deputy comptroller for investments - lacks credibility because of a pattern of half-truths and affectations of ignorance by Mr. McCall's staff.
In one case, it was inconceivable to me that a fund the size of the Common Retirement Fund could have no manager turnover. Yet responses from Mr. McCall's press people would lead one to conclude that any institution that had ever managed money for the fund is still in place.
In fairness, I don't know if the manager turnover question was ever put to Mr. Hull's office. But I was fed up, so I told Mr. Greenberg in a letter late last year that all New York Common Retirement Fund press releases about manager hirings that failed to mention manager terminations would be subject to a Freedom of Information Act request for that information. (The fund had begun issuing these press releases following Pensions & Investments' repeated requests for information.)
Also, I made a separate request for manager terminations for all of 1996. Guess what? The New York Common Retirement Fund dropped some money managers in 1996, after telling me all year that no turnover had occurred.
This lack of credibility made me skeptical when Mr. McCall gave an apparently honest answer to a question about the hiring of a real estate manager that employed a personal friend of Mr. McCall's. P&I killed the story at the 11th hour that would have unfairly portrayed the money manager. But at first we simply did not believe the answers to our questions from Mr. McCall and his subordinates.
Information about the search provided to us by the retirement fund showed that the manager trailed the other finalists after the first round of the search - which, by the way, Mr. Greenberg's office said was not occurring when I initially inquired.
The firm was hired, and we assumed some favoritism was shown because of Mr. McCall's connection to an employee of the firm. An executive of that firm finally convinced us it was not the beneficiary of favoritism.
Opening up the investment process to public examination would eliminate the shortcomings of Mr. McCall's staff. There is no excuse for him not to do so.
The fact that he is a sole trustee and does not meet with a board of trustees is a poor excuse.
In fact, it is more reason to open the process. Other state pension systems with a sole trustee have varying opportunities for the public to observe the investment process.
Equally poor is the excuse that the fund's investment performance might be compromised by discussing some things in a public session. The law allows for an executive session for those issues which, if discussed publicly, could hurt the fund.
The New York State Teachers' Retirement System has its investment committee meeting in public.
Norman Rosner, the New York City Commissioner of Finance representative to the New York City Employees' Retirement System, has opened that fund's investment committee meetings to the public.
Mr. McCall doesn't have to speak with us. We are just asking him to open up the process, so that we can get the information, unencumbered by his investment and public relations staff.