Florida State Board of Administration pensions: Risk won; taxpayers lost
A congressional commission investigating the nation’s financial crisis has demanded “responses and documents’’ from Florida about an investment debacle three years ago that could cost local governments hundreds of millions of dollars.
The Financial Crisis Inquiry Commission wants to interview managers from the State Board of Administration (SBA) about risky securities they bought before the financial meltdown.
The bipartisan panel, appointed by Congress last year, is seeking detailed information not only about those investments but answers to questions including: Why did the SBA invest in exotic, mortgage-backed securities for the local government pool? Was it to boost the fund’s return on investment?
- Read an e-mail from SBA executive director Ash Williams Jr. telling trustees, others about the inquiry.
- See the letter from the congressional panel demanding information from the Florida SBA
Three years ago, the state of Florida made bad investments that lost hundreds of millions in value. State leaders blamed the sharks of Wall Street, who they said duped Florida money managers into buying way-too-risky securities.
Chief Financial Officer Alex Sink pushed the state to sue big banks, which she said dumped tainted investments on Florida.
Gov. Charlie Crist demanded a no-holds-barred investigation and named four Wall Street firms that he suspected took advantage of the state.
Attorney General Bill McCollum wondered if there had been fraud and promised help with an investigation.
Managing a huge pot of public money: Read the Times' full report and see key documents about the SBA’s quest to qualify to invest in unregistered securities