State Senator Joe Pennacchio (R-Morris/Passaic) is calling on sitting members of the New Jersey Investment Council with ties to the bankrupt Lehman Brothers investment firm to disclose what, if any role, they played in the State's ill-advised $178 million investment in the now bankrupt Wall Street bank. The State has admitted losing more than $115 million in just three months. There were two current managers and one former manager of Lehman Brothers who sat on the council when the decision was made to invest in the Lehman bailout, which came at a time when other potential investors refused to help prop up the struggling Wall Street bank.

Monty Cerf, a member of the investment council, was a managing director at Lehman Brothers. He is now a managing director at Barclay's Capital, which bought Lehman's North American operations after the bankruptcy.

"As managing director of Lehman at the time of New Jersey's investment, shouldn't Mr. Cerf have known the sorry state Lehman was in?" Pennacchio asked. "The Wall Street Journal reported in an article today that Lehman had been begging for capital for months."

Council member Jose Claxton was a managing director at Lehman until 2006 and is now a managing director at Latigo Partners, a Wall Street hedge fund. Erika Irish Brown, another board member, was a senior vice president at Lehman.

"There are a so many unanswered questions," Pennacchio said. "Did any of these council members own Lehman shares or stock options at the time of their decision to endorse this investment? Were any shares owned by these members sold after New Jersey agreed to pump $178 million into the failed company? Perhaps more important, were substantial blocks of Lehman shares sold by any members before the Investment Council approval of the Lehman investment? If board members were selling shares, wouldn't that beg the question of why would New Jersey want to purchase a huge stake in this company in the first place?"

The Senator is calling on the Governor to force the Council to disclose any and all information dealing with this huge loss. Arguments that it's a small portion of the portfolio are irrelevant, Pennacchio said.

"The question is whether conflicts of interest led to a reckless investment, and if so, what steps are being taking to ensure that such conflicts are eliminated in the future as billions of dollars of investments are made."