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Pension board weighs options
By ALISA ULFERTS, Times Staff Writer TALLAHASSEE -- Before launching a national search for an executive director, the board responsible for investing Florida's $100-billion pension fund will consider an inside candidate who was once reprimanded by the state. The Board of Administration decided Tuesday to spend the next two weeks sizing up its second-in-command, Coleman Stipanovich, the brother of an influential Republican lobbyist. If they are satisfied, Gov. Jeb Bush, Comptroller Robert Milligan and Treasurer Tom Gallagher, who comprise the board, will hire Stipanovich. If not, they will start a wider search. "Many times we do a lot of searching and we end up where we already are," Gallagher said. If the board is satisfied, Gallagher said, "next meeting we can bring him in. If we're not we can discuss it and maybe search further." Stipanovich said he wants the job, but he declined to comment further until after his interviews. Pension fund executive director Tom Herndon is retiring in three months. It's a sensitive time because the state is pursuing a potential lawsuit against a company that continued to invest the state's employee pension fund in Enron even after its stock began to plunge. That cost the fund more than $300-million. Herndon said the loss played no role in his decision to retire. The board on Tuesday hired two law firms to sue Alliance Capital, the company that invested in Enron for the state. Although Florida Republican Party chief Al Cardenas' law firm was considered for the job, the board instead hired Naples lawyer Tom Grady of Grady & Associates and Guy Burns, senior partner in the Tampa office of Blakely, Pope, Bokor, Ruppel & Burns. The Board of Administration also agreed to step up monitoring of the companies it hires to invest the state pension fund. The board's decision to delay a national search for Herndon's replacement irked Democrats, who have raised questions about Stipanovich's qualifications. Stipanovich has worked for the board since 1999. Before that he was president of an investment consulting firm in Gainesville. He has worked for Paine Webber as a consultant and investment executive. He has a master of science degree in Criminal Justice Administration from Michigan State University and a bachelor of science in criminology from Florida State University. Democrats have questioned why Stipanovich, whose brother is lobbyist and Republican strategist J.M. "Mac" Stipanovich, was hired. "This administration is taking the friends-and-family plan to the extreme," Democratic Party spokesman Ryan Banfill said. "A $100-billion fund -- it seems to me to be a no-brainer that you would do a national search." Critics also have questioned Stipanovich's role in running the state's huge pension fund, considering that he was reprimanded by state banking and finance officials when he was a branch manager for Paine Webber. Stipanovich and another supervisor at Paine Webber were cited by the state for their failure to adequately supervise an employee who caused two elderly investors to lose $11,000 in the late 1980s. Paine Webber was fined $5,000 and ordered to repay the clients in 1992. But board members said they are happy with Stipanovich's work. Bush said Stipanovich has a solid reputation for his work at the pension fund. The fact that he has a politically connected brother shouldn't disqualify him from being considered for the job or raise eyebrows, Bush said. "I don't think that Coleman Stipanovich should be penalized for the sins of a brother," Bush said.
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From the Times Business report Robert Trigaux
From the AP
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