Insuring Himself Employment and a Pension

As he was charged to look after yours.

Related: Bush Bankrupted Pension Insurance Fund

"Ex-pension chief violated rules, report says; He contacted bidding firms on Wall Street" by Michael Kranish, Globe Staff | May 15, 2009

WASHINGTON - The former head of the nation's pension insurance agency, who last year pushed through a high-risk strategy that shifted the insurance fund heavily into stocks just before the market crash, committed a "clear violation" of agency rules by contacting Wall Street firms that were bidding to oversee the new policy, while also seeking the help of one firm in gaining employment, according to a government report.

Charles E. F. Millard, the former Lehman Brothers managing director who was the Bush administration's director of the Pension Benefit Guaranty Corporation from May 2007 until Jan. 20, pushed through a dramatic change in the way the agency invested its $64 billion insurance fund, shifting from a reliance mostly on conservative bonds to a strategy that put 55 percent of its portfolio in speculative investments such as stocks in emerging foreign countries, equity funds, and real estate.

The insurance fund backs the pensions of 44 million Americans. But it had an $11 billion deficit and its stock-related investments plunged 23 percent as of last September, before the brunt of the market crash. The agency has not released further information about the performance of its portfolio.

Then it must be real bad.

Shortly after the new investment strategy was adopted in February 2008, Millard began contacts with Wall Street firms that hoped to implement the new policy - even though he was warned by officials that such conversations were not allowed under federal bidding rules, according to a draft report by the agency's inspector general made public yesterday.

After the agency last fall hired the investment banking firm Goldman Sachs to oversee a $700 million portion of the fund, Millard e-mailed with a Goldman executive about a Wall Street job, according to the report. The Goldman Sachs official responded that he had talked with a person at another firm "who really likes you and if times were better he would have hired you already." The inspector general reported finding 29 e-mails documenting the effort of a Goldman Sachs official to help Millard "in his search for employment."

When the inspector general asked Millard earlier this year about the contacts during the blackout period, he initially denied having the conversations, the report said. Then, confronted with telephone logs, Millard said he would not have discussed the contracts with officials at the bidding firms.

When caught in one lie, tell another!

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