All five Republican members of the Judiciary Committee have resubmitted a request to interview three members of the State Investment Council who have ties to Lehman Brothers and are up for reappointment.
The request, first made by state Sen. Gerald Cardinale (R-Demarest), was turned down earlier this month by the committee's chairman, state Sen. Paul Sarlo (D-Wood-Ridge). In a letter, Sarlo told Cardinale that, due to an "overwhelming agenda," adding another nominee to be interviewed by the committee beyond the set number of 67 "would require extraordinary circumstances – circumstances that frankly are not present in this instance."
The state is currently suing Lehman over the loss of $118 million in public pension funds when the company imploded last year. Three members of the investment council – W. Montgomery Cerf, Erika Irish Brown and Jose Claxton – have a history with the firm.
In declining Cardinale's request to interview the three, Sarlo said that Cardinale misunderstood the Investment Council's role in how the pension fund chose stocks. The members themselves, who work pro-bono, decide policy, but do not pick individual stocks.
"The State Investment Council is never directly involved in investment decisions," he wrote. "These decisions are made solely by the Division of Investment staff and third parties that hold a contract with the Division."
Sarlo also warned that the New York state investment scandal shows that "increasing political pressure on investment decisions are ill-advised."
The Republican membership of the committee, made up of Cardinale, Joe Kyrillos (R-Middletown), Jennifer Beck (R-Red Bank), Bill Baroni (R-Hamilton) and Kip Bateman (R-Branchburg), didn't buy Sarlo's explanation.
"It's clear there has never been a meaningful vetting of these individuals by the Senate to determine if they are qualified to provide top investment advice and oversight on $56 billion of pension funds," they wrote.
The minority members also cast doubt on the idea that the Investment Council members took a completely hands-off approach in picking investments, and noted that state Sen. Joe Pennacchio's (R-Montville) frequent requests for information about the council had gone unanswered.
"We have no intention of taking the word of an administration that will not answer written questions from a sitting State Senate. Nor will we take the word of a Division of Investment head and Investment Council chairman who will not answer even the most basic questions about state investments or investment policy," they wrote.