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SBA director had no conflict in $125 million dealing with former colleague, panel concludes

TALLAHASSEE — State pension chief Ash Williams did not have a conflict of interest when he approved a $125 million investment in a hedge fund managed by a private sector colleague, an advisory panel for the State Board of Administration said Monday.

Chief Financial Officer Jeff Atwater asked the SBA's investment advisory council and audit committee to review the agency's 2010 investment of pension money in a hedge fund called Starboard Value and Opportunity, a spin-off of Ramius LLC.

At issue was the relationship between Williams and Ramius president Thomas Strauss.

Strauss, who had been a client of Williams' former private sector employer, Fir Tree Partners, asked Williams in personal e-mails to consider investing state pension dollars in his fund.

But that alone did not constitute a conflict, council members said.

"This isn't a huge industry, and people are going to know people," said member Chuck Newman, "and just because you know someone doesn't make it a conflict."

Member Les Daniels said, "The more you know the people, and the better you know them, is an important aspect of investing."

A consulting firm paid by the SBA also found the agency's manager-monitoring guidelines to be thorough, though consultants did say the agency should be more clear about who makes the final call on an investment if the executive director has a conflict.

"We actually think that they're much better than many of the policies that we review," said Kristen Doyle, of Hewitt Ennisknupp.

Atwater asked for a review of the agency's procedures for identifying investment opportunities, selecting investment advisers and responding to public records requests. His request was spurred by Sen. Mike Fasano, R-New Port Richey, whose records request related to the Ramius deal resulted in a $10,750 invoice from the SBA.

So far Fasano has received a portion of his request free..

Williams, whose reappointment as SBA chief is scheduled to be discussed at Tuesday's Cabinet meeting, said the council members' conclusions reflect his position all along.

"I have said from day one that the process on Ramius, No. 1, was sound, No. 2, was characterized by multiple internal and external checks and balances, and No. 3, that I in no way inserted myself into it at any time to alter the normal following of process," he said.

SBA director had no conflict in $125 million dealing with former colleague, panel concludes 11/14/11 [Last modified: Monday, November 14, 2011 10:58pm]
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