Pennacchio: One Year Later, Corzine Administration Still Won't Come Clean on Lehman Investment

The decision to make a risky investment of the $180 million magnitude of the Lehman purchase was clearly not made without the input of some appointee of the Corzine administration. Yet, one year later, the Treasurer continues to insist that the investment was solely the decision of low-level employees of the Division of Investment who are being demoralized by questions about the $118 million loss.

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Kramer says N.J. did better than most states with pension fund investments

New Jersey Investment Council Chairman Orin Kramer says the state's pension fund - under attack by Republicans for losing $118 million in a Lehman Brothers investment - lost less over the last year than the funds of the 30 other states who make the information available on the Internet.

Kramer made the argument in a letter to state Sen. Joseph Pennacchio (R-Montville), who has been a vocal critic of the State Investment Council's decision to invest in Lehman shortly before it collapsed.  It was a response to a letter Pennacchio wrote to State Division of Investment Director William Clark to question why the state would not reveal which in-state companies the fund invested in as part of the two-year-old NB/NJ Custom Investment Fund program. 

In an interview with PolitickerNJ.com, Kramer said that the ranking is vindication of his strategy to diversify the state's holdings - a strategy that the Lehman investment ultimately came out of -- and that politicizing the council will jeopardize its future performance.

"The portfolio diversification that made that possible has been under political attack," said Kramer.  "When people make the pension system a political football, seeing that kind of ranking again becomes harder and harder to achieve." 

Although the state's pension fund lost 14.2%, or $10.9 billion, between June, 2008 and June, 2009, the average for the other states was 18.8%.  North Carolina tied New Jersey, also losing 14.2%. 

The state is currently suing Lehman Brothers' former executives and directors, alleging that the company misrepresented its financial position when the state made its $182 million investment in Lehman shares. 

"An irony about Lehman Brothers is that a major source of New Jersey's outperformance arose from underweighting financial services companies.  For every investor, some decisions produce atrocious outcomes," wrote Kramer in his letter to Pennacchio.  "While the State believes it was misled in making that decision, Lehman was obviously one of those atrocious outcomes."

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Pennacchio Repeats: Lawsuit Shouldn’t Be Used to Hide Truth About Lehman

Senator Joseph Pennacchio, a member of the Senate Budget and Appropriations Committee, issued the following statement after the committee chair denied him his right to question the state Treasurer about why he has refused to provide a full accounting of the state’s disastrous losses on an ill-advised investment in now-bankrupt Lehman Brothers:

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Pennacchio Says Corzine Lehman Lawsuit Leaves Too Many Questions Unanswered

The state's suit against Lehman Brothers will not provide the answers that taxpayers and retirees need to be certain that the state is competently managing the billions of dollars of hard earned money that is being placed in its care.

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AFTER LOSING $115 MILLION IN LEHMAN INVESTMENT, TREASURER CHARGES PENNACCHIO $79.50 FOR OPRA REQUEST

The state Treasurer should release all documents on the state's reckless $178 million investment in Lehman Brothers, not nickel and dime senators who request information.

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Obama bundler says he lost $25 billion of N.J. pension funds

Obama bundler says he lost $25 billion of N.J. pension funds
Hedge Fund millionaire Orin Kramer and Obama national finance director Julianna Smoot. A state pension fund headed by Kramer says they have lost $25 billion since July

A New Jersey pension fund run by one of Barack Obama’s earliest and biggest campaign fundraisers/bundlers has lost $25 billion -- including $9 billion in October, according to a report issued today by a state panel.  The New Jersey Investment Council, chaired by hedge fund manager Orin Kramer, says that the value of the state pension fund has shrunk from $82 billion in July to $57 billion.

Kramer, 63, a former White House aide in the Carter administration and a partner at Boston Provident, was named to head the state retirement benefits panel by then-Gov. James E. McGreevey in 2003.  The state Division of Investment is one of the ten largest public fund managers in the U.S., with a market value at of $70.7 billion as of the end of September, according to the Treasury Department website.  The fund provides retirement benefits for more than 700,000 current and future retirees.

U.S. News and World Report ranked Kramer as Obama's #3 bundler last August, just behind Lehman Brothers' Christine Forester.

CLICK HERE TO READ KRAMER'S SIDE

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PENNACCHIO ASKS IF AND WHEN NEW JERSEY WILL JOIN OTHER PENSION FUNDS IN SUING LEHMAN

Other pension funds are suing Lehman Brothers to recover lost investment income. Where is New Jersey's lawsuit?

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Pennacchio Continues to Demand Accountability for Lehman Investment

Does State's Exit from Failed Lehman Brothers Investment Hold the Key to Determining Why the Pension Council Became Involved in the First Place?

State Senator Joe Pennachio (R-Morris, Passaic) questioned today if the same person or persons who determined that New Jersey should rid itself of Lehman Brothers Stock were the same individuals who had the pension fund invest $178 million in Lehman in the first place. New Jersey subsequently lost $115 million of the $178 million investment in three short months. This occurred at a time when Lehman was being rejected worldwide for capital. New Jersey could have been the last major institution to abandon Lehman, prior to it's bankruptcy.

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Senator Pennacchio Challenges Investment Council Members With Lehman Ties to Disclose Roles

State Senator Joe Pennacchio asks how two top Lehman executives and one former Lehman executive on New Jersey's investment council could have let the state lose more than $115 million in three months investing in the now-bankrupt Wall Street investment bank.

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Pennacchio: Treasurer Needs to Explain What Happened With Lehman Pension Investment

The possibility of litigation shouldn't block rapid and full disclosure of what led up to the state's disastrous investment in Lehman Brothers.

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Wake-Up Call

Morning News Digest: March 19, 2010

Christie vetoes 5 service contracts approved by Turnpike Authority  Governor Christie on Thursday vetoed five professional services contracts that were approved by the New Jersey Turnpike Authority a month ago. The governor’s office said Christie exercised his eighth veto because the contract fees ranged from...

Wally Edge

Democratic State Chairman John Wisniewski (D-Sayreville) put out a statement today accusing GOP congressional candidate Jon Runyan of “hiding from the press while trying to privately impress party bosses, and taking advantage of thousands of dollars...
The passing of Warren Wilentz means that David Norcross becomes the earliest nominated U.S. Senate candidate currently living.  Wilentz was the Democratic nominee for U.S. Senate in 1966 against Clifford Case, and Norcross was the Republican U....
The national political environment favored the GOP in 1966.  It was the mid-term election of Democratic President Lyndon B. Johnson, and the war in Vietnam had just begun to divide the nation.   In New Jersey, Republican Clifford Case was...
Essex County Executive Joseph DiVincenzo issued a press release today urging the State Assembly to pass pension and health insurance reform bills, but did not mention in his 574-word that the person blocking the legislation, Assembly Speaker Sheila...
Two Republicans will formally announce campaigns for Congress this evening against Democratic incumbents: John Runyan, a retired NFL star who played for the Philadelphia Eagles, is challenging freshman U.S. Rep. John Adler (D-Cherry Hill), and Diane...

Contributors

This is going to be a budget that is going to be unlike any other you’ve probably seen in NJ in at least the last 20 years and maybe... more »
Everybody needs to start a new job with a list of priorities and Chris Christie is no exception. There might be a thousand things that need to get done... more »
On Tuesday, Governor Christie outlined a strategy to rescue New Jersey from the worst economic crisis since the Great Depression. Like other states, we were not immune... more »
Governor Christie seems to have played the rotten fiscal cards he inherited fairly well. As reported by the Star-Ledger, he is proposing to cut school aid by more... more »
It's impossible to support consolidation of government services and also support COAH.S1 paints with a broad brush and thus will miss some fine points.  COAH paints with... more »
As part of his solution to New Jersey’s current budget deficit, Gov. Chris Christie announced that, effective yesterday, he will not allow any additional parents to enroll in FamilyCare,... more »
Do I love Governor Chris Christie’s budget proposal?  Of course not.  Who would?  I’m sure he doesn’t like it, but that’s not the point, is it?  How could you... more »
The budget speech given on Tuesday by Governor Christie clearly illustrates his priorities – including disproportionately shifting the tax burden away from businesses and the wealthy, and... more »
On Rebate Issue, Christie Will Win.  The leading New Jersey Sunday newspapers yesterday confirmed that Governor Chris Christie will propose in his FY2011 budget the... more »
You’ve got to hand it to Christie; he calls it as he sees it.  I don’t mean the newly crowned Governor, Chris Christie, but his nine-year-old son, Patrick.  ... more »
Anyone involved in governing and administrating a town or county in New Jersey understands the economic problems outlined in The Star-Ledger editorials of February 28 and March 1.  The... more »
It is widely anticipated that Gov. Chris Christie’s first budget message, to be delivered on March 16, will show the harsh reality of New Jersey’s bleak financial outlook. No... more »
In keeping with the commitment I made to you in the November election, I am looking at every possible way to cut wasteful government spending and relieve your tax... more »
Republican Playbook:  Fear, Scorn & Partisanship -- Instill fear.  Sow uncertainty.   Create doubt.  Demonize.   These tactics may be the unfortunate norm for campaigning, but they are bad – if not... more »
Our new Governor suffers from no lack of advice.  Much of it, contained in the transition reports, deserves prompt attention.  Obviously, economic prosperity benefits everyone, and – as... more »
I have to genuinely wonder if this legislature will go down as the most taxing legislature in the history of the state of New Jersey surpassing the legislative actions... more »
Now that  the dust has finally settled after the grueling campaign for governor, there are a number of lessons that we can draw from this election. First and... more »
 March 18, 2010   Stop screaming. You’ll wake up the neighbors.If you're a local town mayor in New Jersey and you think that screaming about the impact Christie’s budget... more »
Limited government principles and fiscal conservatism are philosophically sound, because they preserve the people’s natural rights and they prevent government from overspending, over borrowing and overtaxing.   For more than... more »
New Jersey is in severe financial crisis because for years elected officials have been able to make irresponsible and short-sighted decisions without any restraint.  Future governors may... more »
On January 6, 2010, several newspapers published articles with titles like “no more aid for struggling cities”, “Christie will cut state aid” and the like; furthermore, in the body... more »
New Jersey Governor Chris Christie, you target teachers. That’s not a positive note to start your tenure. You forget that the Teachers’ Union makes decisions on its own, such... more »
On the day of his inauguration, Governor Christopher Christie inherited a gaping $2 billion hole in the state’s budget and swiftly set about the people’s business in meeting our... more »