The following is a response to the (opinion column) of Aug. 4 by Frank Foy entitled “Time to clean the house at ERB, SIC”. I spent 32 years in the investment world and was formerly the chief investment officer for the N.M. Educational Retirement Board, the Teacher Retirement System of Texas and deputy state investment officer for the N.M. State Investment Council (SIC). In addition, Gov. Susana Martinez appointed me to the SIC in 2012, where I served until 2015.
The (column) has no merit. One can start by reviewing the court records that will show that so far the courts have denied every attempt, and there have been several, by Frank Foy and legal counsel to pursue the whistleblower act. The SIC legal counsel along with outside counsel has recovered over $40 million from firms involved in the Bill Richardson pay-to-play era and has an ongoing effort to recover more. They are pursuing the play-to-play firms as they should. As to the structure and performance of the SIC, it is being managed professionally with very qualified personnel.
An argument was made that the state investment officer is not an investment professional. There is no way for the ranking person to manage the assets and be the chief administrative officer while dealing with the legislative process. The top person should be titled executive director. That is the structure of most public funds. Steve Moise, while being titled state investment officer, is a lawyer, experienced administrator, and has in-depth experience dealing with the legislative process. The (column) falsely states that Steve is a Richardson appointee. He was selected by 11 council members in April 2010 to restore the professional and ethical standards of the SIC. When he was placed in his position, he conducted a nationwide search and hired Vince Smith as chief investment officer. In my 32 years of investment experience, I have not been exposed to anyone more capable. In 2014 Vince was awarded the “Top Innovator” award among CIOs for all global sovereign wealth funds by Ai/CIO magazine.
Since, and because of, the days of Bill Richardson, the SIC has adopted detailed policies, tightened up ethics policies, created a more transparent environment, involved the council members more in the investment process, and created a more detailed investment policy. I saw this up close as a member of the SIC from 2012-2015. The fact that the SIC is getting frequent requests by state schools and agencies to manage their assets is proof that they are doing an excellent job. SIC currently manages over $1 billion among 21 governmental clients. Importantly, SIC will provide $968 million this fiscal year to fund public schools, state universities, specialty schools like New Mexico Military Institute and the School for the Blind, and other governmental services.
As to the compensation levels, New Mexico has always ranked behind other public funds in compensation. The investment professionals at the SIC manage billions of dollars, a huge responsibility. In order to compete for the type of personnel needed, the compensation has to keep pace. The compensation levels should be much higher. The SIC is also competing with the private sector for talent.
Pay no attention to the (column) of Aug. 4. Frank Foy has never worked at the SIC or been a member of the council so has no knowledge of the inner workings of the SIC. If he had been successful in court, a portion of the money recovered would have paid him and his legal counsel handsomely at the expense of the permanent funds and New Mexico school kids. New Mexicans’ permanent funds are in proper and good hands. Be proud of the asset management at the SIC.