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Letter to the editor

State fund executive resigns

Investment troubles lead to the Board of Administration director's departure.

By BY HELEN HUNTLEY and SCOTT BARANCIK, Times Staff Writers
Published December 5, 2007

A crisis of confidence cost Coleman Stipanovich his job as executive director of the state board that invests $190-billion in public funds, including the nation's fifth-largest pension fund.

"There is nothing more important to me - except my family and friends - than to restore confidence of people in the State Board of Administration," he told the board's trustees at a meeting in Tallahassee on Tuesday. "I'm doing that by doing the right thing."

Stipanovich resigned as cities, counties and school systems across the state face the possibility they will lose some of the money they trusted the board to manage for them. The Local Government Investment Pool holds about $2-billion in troubled assets, some of which have defaulted. A run on the fund prompted board trustees to freeze withdrawals temporarily and turn over management to an outside firm. (See story, 1A).

Stipanovich denied he was under any pressure to quit and insisted the decision was his. However, Florida Chief Financial Officer Alex Sink, one of three board trustees, said they had discussed his resignation.

Sink said the board's communication with investors "just was not adequate." She said Stipanovich "stonewalled" some local government officials looking for answers, adding that one felt it necessary to hire an attorney to get answers from the board.

Sink said Stipanovich also was slow to communicate with her and other trustees about the problems the fund was facing. When she learned about them, she said, "I was quite surprised, if not stunned."

Nevertheless, Sink and other trustees had complimentary things to say about the pension fund's performance under Stipanovich's watch. Earlier this year Standard & Poor's Rating Service ranked it as the best-funded pension plan in the country.

"All of us owe you a debt of gratitude," said Attorney General Bill McCollum, also a board trustee along with Gov. Charlie Crist. "I don't want this to overshadow the great work you have done for us."

Stipanovich joined the state board in 1999 as chief of administrative services, rising to deputy director, then to director in 2002.

Born 58 years ago today, Charles Coleman Stipanovich is a Vietnam veteran whose first career was in law enforcement. After getting a master's degree in criminal justice administration, he worked as a deputy sheriff in Alachua County, prison clerk, and assistant director of a police academy.

Stipanovich abruptly switched careers in 1981, when he took a job at Thompson McKinnon Securities in Tampa. He later went to work for PaineWebber, rising from branch manager in Tampa to corporate vice president and, finally, to a consultant with the brokerage house's public finance and municipal securities group.

For much of his securities career, however, Stipanovich - a registered Republican who lives with his wife, Sharon, in a lakefront home in Tallahassee - has been dogged by allegations that he has benefited from his older brother's political connections.

When then-Gov. Bob Martinez appointed Stipanovich to the Tampa Bay Regional Planning Council in 1987, a St. Petersburg Times editorial called it an example of "obvious patronage." Brother J.M. "Mac" Stipanovich was a top Martinez aide and the governor's former campaign manager at the time.

Later that year, the Times noted that Martinez appointees at the Greater Orlando Aviation Authority named PaineWebber the senior manager of a projected $400-billion bond. Coleman Stipanovich managed PaineWebber's Tampa branch at the time.

In 1993, around the time Mac Stipanovich was managing Jeb Bush's first gubernatorial campaign, Coleman Stipanovich was appointed to the State Board of Administration's investment advisory council. And when Herndon resigned as the board's executive director in 2002, Gov. Bush and the board's two other trustees appointed Stipanovich to the top job, eschewing a national search for a replacement.

No date has been set for Stipanovich's departure from his $182,000-a-year job, nor were there any discussions of a severance package or the appointment of an interim director.

The board's deputy director is Kevin SigRist, 46, who joined the staff in 1996 after a stint at Norwest Corp. (now Wells Fargo & Co.). His background is in economics and risk assessment.

Staff writers Jennifer Liberto and Steve Bousquet contributed to this report.

[Last modified December 4, 2007, 22:38:09]