TALLAHASSEE — Chief Financial Officer Alex Sink's two-year push for broader oversight of Florida's investments was blocked Tuesday by two colleagues on the Cabinet who help her oversee the nation's fourth-largest public pension fund.
In a result that carried political overtones, the Democratic candidate for governor was outvoted by a pair of Republicans: her rival in the governor's race, Attorney General Bill McCollum, and Gov. Charlie Crist, who cast the deciding vote in McCollum's favor.
Sink said having only three elected officials oversee Florida's pension fund is inadequate — a flaw she said was exposed in the 2007 pension fund "crisis" that led to a temporary freeze on withdrawals from a local government investment pool and resignation of the fund's executive director.
She proposed expanding the board overseeing the $120 billion fund to include an expert in investments as well as a representative of the more than 1 million beneficiaries, mostly retired employees of state and local government, that rely on the fund's solvency for a secure retirement.
Sink said Florida is alone among other states in having the governor and attorney general as voting trustees of the fund.
"I'm looking forward to the future, the next five, 10, 15, or 20 years," Sink said. "The only way we can assure that we continue to manage this fund properly … is that we have a board of trustees who has experience in financial and auditing matters."
McCollum offered a more modest set of oversight changes that included adding three members to a six-member Investment Advisory Council along with stricter requirements for annual financial statements on the pension fund's performance. But he said the current system works well.
"Florida is the envy of the nation in terms of the management of its pension fund," McCollum said. He added that he, as attorney general, is a fund trustee because Florida's Cabinet system is unique among states in that the governor and three statewide elected officers also set policy on education, the environment and financial matters.
Tom Gallagher, Sink's predecessor as CFO and a 2006 Republican candidate for governor, appeared at the meeting in the unusual role of a citizen offering testimony. He vehemently opposed Sink's proposal, saying it would politicize pension fund decisions.
"You shouldn't be looking for someone else to blame things on," Gallagher said. "The three of you should take the responsibility you took when you were elected."
Sink's ideas, and McCollum's more modest proposals, will be sent to the Legislature without recommendations.
The outcome was what she expected, but Sink said she wanted to go on record with her position and force Republicans to do the same.
She said other changes outlined Tuesday by fund executive director Ash Williams were positive steps, such as annual, independent audits of the fund, improved lines of communication, an expanded antifraud hotline and an internal compliance officer at the fund.
"None of these would have happened had we not had a crisis two years ago," Sink said. "The system was broken and it needed to be fixed."
Steve Bousquet can be reached at email@example.com or (850) 224-7263.