Florida public pension funds keep quiet on millions paid to middlemen
Florida's public pension has invested about $2 billion in two dozen private funds since December.
Rather than approach the pension's staff directly, half the funds used middlemen to get in the door. They paid these well-connected placement agents millions of dollars for making introductions and setting up meetings. Average finder's fee: about $1.5 million.
Florida's money managers at the State Board of Administration say using placement agents is routine and no cause for concern. But after such intermediaries were found to be at the heart of kickback scandals at public pensions in New York and California, those states have taken tougher stands.
Ashbel C. Williams Jr., the SBA's executive director, boasted that Florida's rules are even stricter. He told his agency's investment advisory council last week: "Our policy goes beyond the SEC's. We require disclosure of the compensation they've been paid."
There's just one catch: Williams' definition of disclosure does not extend to Florida's pensioners or taxpayers. His agency gets to know what the middlemen are paid. But the public — told that pension investments are made on merit, not on who you know — cannot find out how much money changed hands before a deal went down.
The reason? The SBA won't release the information if investment funds want to keep it secret. And they all do. Read Kris Hundley's story here.