Pennacchio Requests Exhaustive Hearings on Corzine Pension Re-Appointees

Senator Joseph Pennacchio, R-Passaic and Morris, is requesting that the members of the Senate Judiciary Committee agree to thoroughly question three members of the State Investment Council, which sets policy for state pension investments, before signing off on their reappointments by Governor Corzine..

"Given the recent lawsuit filed against Lehman Brothers and the billions of dollars in investment losses in recent months, it would be inexcusable to let these three re-appointments be approved without thorough review by the Judiciary Committee. So far, no hearings have been scheduled.

"All three of these appointees worked for Lehman Brothers at some recent point in their careers. The Governor and Treasurer have refused to provide answers to reasonable questions about the roles these appointees may have played, if any, in the decision to invest in Lehman, and about how the state Division of Investment lost more than $115 million by investing in Lehman less than four months before the Wall Street bank went bankrupt.

"Most important, these three nominees need to be asked whether they think the state now provides the oversight needed to prevent such risky investments in the future.

The governor appoints six of the 13 members of the investment council. In February, Governor Corzine asked that the state Senate grant new terms on the council to the following three members:

W. Montgomery Cerf, a managing director at Lehman who now works for Barclay's PLC, which bought the North American assets of Lehman in September.

Erika Irish Brown, a senior vice president in charge of diversity recruiting at Lehman.

Jose Claxton, who was a managing director at Lehman from 2004 to 2006.

"Taxpayers and retirees expect us to do more than just rubber-stamp the nominations of council members who will play key roles in the management of $60 billion in pension money. These nominees in particular need to be thoroughly vetted to see if they could have done more to prevent the losses experienced because of the Lehman investment. The nomination process should provide the opportunity for full and frank discussion of how this state invests the hard-earned money of taxpayers and retirees," Pennacchio said.