Board plans review on pension advisers

African-American nominee allegedly treated poorly

July 03, 2008|By Nicole Fuller | Nicole Fuller,SUN REPORTER

The Board of Public Works agreed yesterday to clarify the appointment process for advisers to the state retirement and pension system after complaints that a nominee who would have been the first African-American in that post was treated poorly.

Comptroller Peter Franchot and state Sen. Catherine E. Pugh said yesterday that Larry E. Jennings Jr., co-founder and senior managing director of TouchStone Partners, a private equity firm that manages over $300 million in assets, was treated unfairly and subsequently withdrew his name from consideration, creating concern among many in the state's minority business community.

"For someone to withdraw from the process because of character assassination behind closed doors to me is unacceptable," Pugh said during a meeting of the state Board of Public Works yesterday. "Bad news always travels fast, and this has traveled fast and wide in the minority business community."

FOR THE RECORD - An article in Thursday's editions of The Sun incorrectly identified whom the Board of Public Works reappointed as a public adviser on the investment committee for the State Retirement and Pension System of Maryland. Wayne H. Shaner was reappointed to the post.
The Sun regrets the error.

Franchot nominated Jennings in May to serve as an unpaid public adviser on the investment committee for the State Retirement and Pension System of Maryland.

Jennings met separately with members of the investment committee and pension system staff to discuss the job expectations and his qualifications last month. The investment committee and the board of trustees must recommend a nominee to the Board of Public Works for approval.

Franchot's and Pugh's public questioning of the pension board's commitment to diversity came as the Board of Public Works, of which Franchot is a member, voted to approve the re-appointment of Brian B. Topping to a term as a public adviser to the investment committee. Topping has served in that capacity since 1991.

During a meeting last month, some pension board members raised questions about Jennings' potential involvement in a bribery scheme in the 1990s that centered on no-bid contracts his father's company received from the Housing Authority of Baltimore City, said Treasurer Nancy K. Kopp, who sits on the Board of Public Works and is chairwoman of the pension system's board of trustees.

At the time, the younger Jennings was serving on the housing board. He was ultimately cleared of any wrongdoing.

"The nature of the discussion left me, as someone who was there, quite troubled," Franchot said. "I think it's a terrible shame."

Some pension board members also raised questions about advisory work on distressed property that Jennings had apparently done for the city of Detroit but had not included on his resume, Kopp said.

Jennings, reached on his cell phone, declined to comment yesterday. Franchot and Pugh declined to discuss the nature of the pension board members' questions. Pugh said she has spoken to Jennings and that he is willing to re-enter the nominating process.

Franchot, who is the vice chairman of the pension system's board, said that in meetings with the board, Jennings gave "an outstanding vision" for his role on the committee and "hit the ball out of the park." He said Jennings was the only nominee before the board for the vacant seat, an assertion disputed by Kopp and R. Dean Kenderdine, executive director of the pension fund, who both said there were two other nominees for the position.

"I regret things happened the way they did," Kopp said. "I don't know whether the other folk who are also well-qualified will want to continue with the process."

Kenderdine would not comment on the board's questions about Jennings' qualifications, but said of him: "My impressions were that he is someone who has an extensive career in investments. Someone who has been very successful in his whole life, in the business pursuits that he has had. Someone who could contribute to the investment deliberations of the investment committee and board."

Pugh said that besides hearing from members of the minority business community, she has received inquiries about the situation from the Legislative Black Caucus. She said her primary concern is to ensure that the process is transparent, and that "we are applying the same standards across the board as it relates to the selection process of advisers," according to a letter she wrote to the board.

Kopp told Pugh, a Baltimore Democrat, that the board would clarify the nomination process in the future.

The vacant seat on the investment committee's three-member public advisory panel was created by the departure of Robert W. Schaefer, who was appointed last summer by Gov. Martin O'Malley to serve on the board of the retirement system.

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