In response to the state’s lawsuit against former Lehman Brothers executives and directors over $118 million in pension fund losses, State Sen. Joe Pennacchio (R-Montville) said that the legal action was “long overdue” but not enough.
Pennacchio would like to hold legislative hearings on state investment decisions.
"This lawsuit doesn't 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,” Pennacchio said yesterday in a press release. “I again call for immediate legislative hearings to determine whether the procedures governing state investment decisions are sound.”
Since news of the pension losses broke, Pennacchio has been pressing for legislative hearings and trying to get the Treasury Department to release documents related to the acquisition of Lehman stock. He has also been critical of the fact that three members of the State Investment Council – W. Montgomery Cerf, Jose Claxton and Erika Irish Brown — are former Lehman executives.
All three were recently reappointed to the council by Gov. Corzine.
“It is not unreasonable to ask why these board members, two of whom were working for Lehman as executives at the time of the bank's collapse, didn't have more to say about this investment,” he said.
State Investment Council Chairman Orin Kramer has said that the council itself does not make individual stock purchasing decisions, focusing instead on broad policy guidelines and asset allocation.