The State Board of Administration controls $112 billion in state pensions and billions in other taxpayer funds. It is an extraordinarily powerful investor, as a result, of the Growth Machine. Yesterday, according to the Tallahassee Democrat, "In a starkly partisan vote that split two candidates for governor, the board managing Florida's pension fund and treasury investments punted to the Republican-run Legislature on Tuesday on proposed changes to oversight of how the taxpayers' money is managed."
Among the failed investments of the SBA during Jeb Bush's tenure: bonds sold by Lehman Brothers, the investment bank that crashed in the first phase of the national economic emergency, but not before employing Jeb as a consultant. A full accounting has never been done by investigative journalists. Just more tetherballing of accountability by politicians in Tallahassee.
2 comments:
This was a big deal for lie a week...with the SBA administrator Coleman Stiponovich getting fired. I missed any investigation of this as well, and if I had to guess, the failings of this investment were one of many indicators that things were horribly wrong with the securities they'd bought.
Jeb Bush tried to privatize all things profitable and make the people assume all risk associated with investment. His program gave a leg up to charter schools and turned elements of the state's water supply, public roads and social services over to wealthy investors. The lynchpin of his healthcare agenda was to turn Medicaid into a private managed health care system. That program was piloted in five counties. The Department of Children and Families was turned into a massive private gamble that money could be made off Florida's most vulnerable children.
When investments went bad the working people of Florida ate the loss. In 2002 the state's short-term investment and pension funds lost $334 million as Enron collapsed, three times the loss of any other fund in the nation. Jeb Bush's minions invested in Edison charter schools when the stock was valued at $37 and got out when it was worth 14 cents. Another $500 million of the public's money was lost to enable other corporate adventures.
But the worst was yet to come! Because although term limits forced Jeb Bush to give up his Tallahassee office in 2006, it did not thwart his plan for turning the apparatus of state government into his own personal cash cow. First he put one of his stooges, Coleman Stipanovich, in charge of making decisions for the multi-billion dollar Local Government Investment Pool and the Florida Retirement System. Then he got himself a spot on the Board of Directors of Lehman Brothers, the giant Wall Street financial services corporation. This unholy alliance has borne bitter fruits.
The now resigned Stipanovich made $1.5 billion in bad investments, $842 million of them purchased through Lehman Brothers. The pension fund now holds $756 million in worthless paper related to the housing market meltdown, almost 8% of its cash holdings. The state's short-term investment fund is faced with similar losses. Jeb Bush and Lehman Brothers won't be losing any sleep over it though because the vulnerability has been dumped on Florida's 1.1 million current and retired state workers, hundreds of school districts and local governments, the state-created Citizens Property Insurance, and the state treasury.
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