Port: The public is paying attention, and that's not 'garbage'
Many working around the state's investments feel the problem in this situation is not rubber-stamp State Investment board and an entrenched consultant with a too-cozy relationship with the companies it's consulting on. They think the problem is that you and I are paying attention.
MINOT, N.D. — “I must tell you these allegations of pay to play are insulting to me personally."
Those are the words of Darren Schultz, deputy chief investment officer for North Dakota, to a meeting of a legislative advisory board. “There’s fake perceptions that Callan is pulling puppets,” he said . “It’s all garbage.”
Schultz's tantrum is about par for how some officials have reacted to recent scrutiny of the state's relationship with California-based consultant Callan.
One gets the idea that these public servants handling the public's money have forgotten they work for the public.
That advisory board meeting was interesting, with state investment officials on defense as lawmakers asked pointed questions about Callan's financial ties to most companies it has recommended to manage the state's billions.
Shall we review some of what Mr. Schultz calls "garbage?"
“We actually do heavy due diligence on these investment managers,” outgoing chief investment officer David Hunter told the lawmakers.
Callan, which consults on hiring other investment consultants, has had that contract with the state, without interruption, since the sunset of the Reagan administration.
Jan Murtha, deputy executive director for the Retirement and Investment Office, said Callan's contract with the state isn't “rolling” or “open-ended." That contract is exempt from state procurement laws, but Murtha told the lawmakers that the state's investment officials follow their own process. She also didn't elaborate on what, exactly, that process is.
Maybe they haven't followed it in so long they can't remember what it is?
Is it "garbage" to wonder how one company holding a contract since a time when "Magnum P.I." was still on the air is the product of a regular review process that isn't "rolling" or "open-ended" and includes "heavy due diligence?"
Callan "has received payments from 12 of the 14 companies that manage the investments for the $8.7 billion Legacy Fund," Patrick Springer reported . The public isn't allowed to know how much Callan was paid by those companies.
Is it "garbage" to think that situation is, uh, "garbage?"
When recently elected Treasurer Thomas Beadle made some inquiries to Callan about past accusations of pay-to-play made against the company, he got the same sort of hostility from his fellow members of the State Investment Board that Schultz displayed to lawmakers.
Jamestown Public Schools Superintendent Rob Lech, the SIB's vice chairman and a trustee for the Teachers Fund For Retirement, told Beadle he was "starting to get real cute" during a heated SIB meeting that ended with a motion to restrict the ability of board members to speak to the public.
Many working around the state's investments feel the problem in this situation is not rubber-stamp State Investment board and an entrenched consultant with a too-cozy relationship with the companies it's consulting on.
They think the problem is that you and I are paying attention.
Which might be the biggest problem revealed in this mess.
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Rob Port, founder of SayAnythingBlog.com, is a Forum Communications commentator. Reach him on Twitter at @robport or via email at email@example.com .