Schaefer under fire for absences

Comptroller has missed many meetings of key state pension committee

August 16, 2006|By MICHAEL DRESSER | MICHAEL DRESSER,SUN REPORTER

Maryland Comptroller William Donald Schaefer has missed more than half of the last 18 meetings of a powerful committee that guides the state pension system's investments, records show.

Schaefer, who as comptroller is a member of the pension system's Investment Committee, missed six of the panel's 11 meetings last year, according to minutes of its sessions. This year, Schaefer has missed five of seven meetings.

He has attended more meetings of the system's full board of trustees, which he chairs. Schaefer missed three of 11 meetings last year, two of them absences excused for illness. He has missed two of seven meetings this year: one in June to attend two funerals and a meeting yesterday.

According to Thomas K. Lee, the pension system's executive director, yesterday's absence was listed as "unexcused."

Michael Golden, a spokesman for the comptroller, said Schaefer missed yesterday's session because he was attending a meeting that was postponed last week and could be rescheduled only for yesterday. Asked whether the meeting was on state business, Golden said: "I'd rather not say."

The $34 billion pension system provides benefits to about 94,000 retired state employees, teachers and law enforcement officers across the state. About 190,000 current government employees also are covered by the plan.

The Investment Committee, though a little-known panel, plays a critical role in managing the system because its recommendations on investment strategies and the hiring of fund advisers usually are accepted by the full board.

Schaefer, 84, has based his campaign for re-election largely on the premise that he is a vigilant watchdog of the state's money. His absence from pension system meetings has led to criticism from his opponents in September's Democratic primary.

Both the comptroller and state treasurer are members of the Investment Committee under Maryland law. State Treasurer Nancy K. Kopp has missed two of 18 committee meetings since the beginning of 2005, while Schaefer has missed 11.

Golden noted that Schaefer isn't required to attend the committee meetings. "He's not chairman of the Investment Committee, and his chief of staff, Dean Kenderdine, sits in on those meetings," Golden said. Records confirm that Kenderdine, who was present at yesterday's board meeting, regularly attends pension functions when Schaefer is not there.

But the standard in the recent past has been for the comptroller himself to attend.

During his four-decade tenure in the office, Louis L. Goldstein rarely missed Investment Committee meetings -- attending all but three of his last 30. Robert L. Swann, who served the remainder of Goldstein's term after his death in 1998, attended every meeting of the board and committee during his six-month tenure.

Swann, Goldstein's longtime deputy, said the committee is the body that directly oversees fund managers and monitors the type of investments they are making with pension system money.

"To me, it's just as important to be at the Investment Committee as it is to be at the full board meeting," Swann said. "That's the biggest fiduciary responsibility in my mind that a retirement system trustee has."

Del. Peter Franchot, one of two Democrats running against Schaefer, said the absences show the comptroller is "just not up to the job."

"Most of all, the office of comptroller needs someone at the top of their game, and we don't have that right now," said Franchot, 58. The Montgomery County legislator said he would attend every pension board and committee meeting except in "extraordinary circumstances."

Anne Arundel County Executive Janet S. Owens, Schaefer's other challenger, said that if elected, she would attend every Investment Committee meeting unless she were sick or traveling.

"It's one of the most important functions, I believe, of the comptroller," said Owens, 62. "It's such a clear fiduciary responsibility."

Golden, Schaefer's spokesman, pointed to the pension system's improvement over the past three years as validation of Schaefer's record. The system recently reported a 10.4 percent return on investments for the budget year that ended June 30, beating its target of 7.75 percent. Over the past three years the fund has grown from $26 billion to $34 billion.

"Why would you argue with success?" Golden said. "It doesn't look like the pension fund has suffered because he hasn't attended one of the committee meetings."

Schaefer's frequent absences from Investment Committee meetings represent a return to an attendance pattern seen early in his first term.

In November 2001, The Sun reported that since taking office in 1999, Schaefer had missed more than 40 percent of full pension board meetings and more than half of Investment Committee sessions, which are generally held the first Friday morning of each month.

At the time, Schaefer said he had "no excuses" for missing the committee meetings. "I just didn't attend them," he said in an interview for that article. He could not be reached yesterday.

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