Fla. investment panel raps its executive director

AP News
Posted: Nov 18, 2009 10:26 AM

Gov. Charlie Crist and two Cabinet members who sit on a panel that invests state money chastised their top staffer for failing to keep them updated on a Securities and Exchange Commission investigation.

But the State Board of Administration on Tuesday also praised Ash Williams' overall performance and unanimously reaffirmed his appointment for another year overseeing more than $130 billion in investments.

Crist, Attorney General Bill McCollum and Chief Financial Officer Alex Sink had complained Williams didn't advise them in October 2008 when he received a formal order of private investigation from the SEC.

Williams said the order, which arrived just a day or two after he began working for the board, was just a procedural step in the investigation _ announced eight months earlier _ of investments the board made for local governments.

The board members, though, said they need to promptly get that kind of information for the sake of transparency and public trust.

"That was a significant status change," McCollum said, even if "there was nothing big or dramatic about it."

"To the best of my knowledge your legal team did not inform any of us of that step," McCollum said.

Sink agreed with McCollum and Crist said there was a "clear consensus."

"Your point is well taken," Williams replied. "I can tell you with absolutely no doubt in my mind that any subsequent contacts we've had absolutely have been shared in real time _ hard copy _ with your staffs."

The panel questioned Williams about the matter in response to a St. Petersburg Times report on Nov. 6 saying the agency had not made the order public.

The SEC has not divulged details of the investigation, but Williams said it's likely focused on possible fraud by companies that did business with the board rather than the board itself. Those companies are regulated by the SEC but the board is not, he said.

Many local governments two years ago withdrew more than half of their money from what had been a $30 billion investment pool in a panic after millions of dollars in mortgage-backed investments became virtually worthless.

Williams said the pool has been revamped since then and now has an AAA investment rating. The changes include new investment policies and controls.

The private investigation order simply gives the SEC the power to take sworn statements and the authority to subpoena records and witnesses, Williams said.

McCollum agreed it was a procedural matter but said the problem is the document uses the word "order" and that means it could be interpreted as "a big deal."