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Pension board questions persist

Some trustees on Tampa's pension board want to dump a consultant hired to analyze the pension fund's investments. The trustees claim they are responding to the consultant's request for a yearly fee increase from $59,000 to $81,600.

That's a healthy jump. It may or may not be deserved. But observers can't be blamed for suspecting that the two trustees leading the effort to dump the consultant, Mercer Investment Consulting Inc. of Atlanta, have a different motive.

After all, those same trustees also happen to be stockbrokers whose firms trade stocks for the city's $337-million pension fund, and they say they see nothing wrong with the large sums of money the fund has paid to their own firms. The consultants have been sharply critical of the improper, though legal, setup under which trustees have profited handsomely from the very board they are supposed to oversee. Tampa is the only large Florida city with such an arrangement.

Andrew Hirsch is one of the trustees who proposed finding a new consultant. He also is a stockbroker at Robert W. Baird & Co. His firm has made about $290,000 doing business with the city pension fund during the past three years, including $80,000 paid to Hirsch's father, Les Hirsch, who also is a Baird stockbroker.

Diana Winoker, a vice president for Smith Barney Inc., also is a pension board member. Her firm has made nearly $400,000 trading stocks for the pension fund during the past three years.

Eric Jasielonis, a city of Tampa accounting technician, is chairman of the pension board. He says the expressed concern over the consultant's fee is a "convenient excuse" to get rid of Mercer because the firm's consultant, Sandra Morelli, questioned the propriety of the fund's arrangement with board members' firms.

Her question is a valid one. Brokers whose companies make money from the pension fund should not sit on the pension board. Those brokers and the people who appoint them do not seem to grasp that they present a terrible appearance of conflict of interest. They are handling a public trust.

By law, public pension funds are supposed to operate solely in the best interest of retirees, not for brokers making trades and commissions from public money. As long as this situation is allowed to continue, it will take more than dumping a consultant to make the questions go away.