Schaefer's risky investmentsThe statements made by Gov...

the Forum

January 25, 1993

Schaefer's risky investments

The statements made by Gov. William Donald Schaefer regarding the Maryland State Retirement and Pension Systems must be answered.

The governor said the purpose of the retirement systems' investment in venture capital was "to stimulate the economic growth and jobs in our state." The fact is, the first loan from the fund was made to a Connecticut firm. None to date has been lent in Maryland.

He also mentioned that it was a safe investment. In fact, it is a very risky investment. The report of the venture capital subcommittee of the systems' investment committee states that "by definition, individual investments in emerging enterprises are risky."

It further states that "a number of venture capital investment partnerships have produced negative returns or returns that have been less than the Standard & Poor's 500," and that "there are more losers than winners."

It is interesting that all the subcommittee members were either appointed by the governor or elected by the Board of Public Works, on which the governor sits.

The fact sheet of the Maryland Venture Capital Trust also states that "the purchase of beneficial interests involves a high degree of risk and is therefore suitable only for investors who understand the possible consequences of an investment in the trust."

The governor did not mention that Baltimore City lost $25 million in bad development loans while he was mayor. Nor did he mention that the Kansas retirement system has written off $118 million in losses of local social investments and expects to write off more. The West Virginia system is already in bankruptcy.

Only one elected board member voted for this investment and his term is expiring. I suspect that these statements by the governor are just a vain attempt to salvage his re-election as a means of rewarding him for his vote.

Calvin L. Reter


The writer is president of the Committee for the Protection of the State Retirement Systems.

Smoking ban is overdue and a legal necessity

Congratulations are due the Baltimore Orioles for adopting a new smoking policy for fans attending home games during the 1993 baseball season.

The elimination of smoking in seating and restroom areas appropriately recognizes the dangerous effects of secondhand smoke as documented in a recent report issued by the U.S. Environmental Protection Agency.

All Maryland businesses are strongly urged to review this report and to respond in kind to protect the health and well-being of both employees and customers alike.

Christian H. Poindexter


The writer is chairman of the Maryland State Council on Cancer Control.


Hooray and boo! The Orioles' long-overdue decision to restrict public smoking at Camden Yards is most welcome -- but yet shortsighted.

Rarely in the course of any controversy does an issue arise which has only one side. Smoking in any public place is that exception. There is no excuse for it -- ever -- period.

The recent release of the Environmental Protection Agency's ruling that secondhand smoke causes cancer in nonsmokers -- as well as scores of other health problems -- should put the issue to rest for good.

For years, most Americans have strongly suspected this, despite the denials of big tobacco companies, whose only interest is profit, not public welfare.

Now smoking in any public place is no longer just a matter of poor taste and lack of consideration for the 74 percent of Americans who choose not to indulge in one of the world's most deadly drugs; it's potentially a matter of life and death.

As such, it becomes a moral and legal issue as well.

Oriole president Larry Lucchino is not only right to ban smoking in most of the stadium; he is smart. Not to do so would make him vulnerable to a law suit for "maintaining a foreseeable danger."

Malls, stores, restaurants and bars should follow the Orioles' lead or face the risk of similar suits.

I'll be first in line to buy a season ticket package now that the smoke is gone at Oriole Park.

But I'll avoid its smoking restaurants, concourses, corridors and picnic areas until a class action suit makes these places smoke-free as well.

Jim O'Toole


Sarbanes & the Fed

It was with horror that I watched Senator Paul Sarbanes, D-Md, on C-Span last Wednesday grill a former member of the Federal Reserve System's Open Market Committee on how he got on that committee with his only experience being that of a bank president.

Sarbanes was particularly disturbed that Mr. Hoskins, the appointee, was philosophically for a stable currency, that is, zero inflation.

As head of a Senate Banking subcommittee, Sarbanes railed against the fact that he, personally, and the Congress had no say in the Fed's operation.

The senator tried ignorantly to make the case that a cheap dollar and subsequent inflation were good for the economy. He showed no interest in the fact that financial markets dictate Fed policy, not the Fed itself.

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