Three members of the New Jersey State Investment Council who once worked for Lehman Brothers will remain on holdover status until next year, leaving them in office until the new governor can confirm his own nominees. Sources say that there will be no consideration of the Lehman Three — W. Montgomery Cerf, Erika Irish Brown and Jose Claxton – during the Legislature’s lame duck session.
All three come from counties where Republican Senators can block their nominations.
Gov. Jon Corzine renominated Cerf, Irish Brown and Claxton last February, three weeks before the state filed a lawsuit against top officials of the now-bankrupt Lehman Brothers Holdings Inc., alleging that "misrepresentations by the company led the Division of Investment in the Department of Treasury to purchase $182 million in Lehman securities in April and June 2008 that resulted in an estimated $118 million in losses."
The State Investment Council lost more than $25 billion in state pension funds over the last year. The council chairman, Democratic fundraiser/hedge fund executive Orin Kramer, attributed the losses to a bad economy. He says that New Jersey’s pension fund losses were less than thirty other states
Cerf, Irish Brown and Claxton, who are not among the Lehman executives being sued, will remain in office until Gov.-elect Christopher Christie nominates his own State Investment Council members and until the State Senate confirms them. Republican insiders expect Kramer to also be replaced. Last February, Christie criticized Corzine’s reappointment of Cerf, Irish Brown and Claxton, calling it”"another example of a failure of accountability in this state government."