State fund inquiry hits a wall

Frustrated State Board of Administration trustees see little progress and seek help elsewhere.

By JENNIFER LIBERTO, Times Staff Writer
Published March 12, 2008

TALLAHASSEE - Frustrated with lack of progress, State Board of Administration trustees signaled Tuesday they may tap another state agency to investigate for securities fraud in bad investments for the local government investment fund.

The trustees complained that they feel like nothing has happened since an investor run on the local government investment pool in November.

Last week, Chief Financial Officer Alex Sink unveiled a list of recommendations. Topping her list was discerning legal grounds to sue to recoup losses. On Tuesday, she and other trustees learned that might not be so easy. "I'm tired of wasting time. This has dragged on since December," Sink said.

The SBA audit committee told the trustees that when they hired outside law firm Berger Singerman through a competitive bid process, they based their choice on the firm's ability to advise the SBA auditing committee - not an ability to look for blame and see if a lawsuit could result.

Both Sink and Gov. Charlie Crist said that they had intended a law firm to be hired to help figure out how and why the bad purchases were made and question if fraud occurred.

Attorney General Bill McCollum suggested asking the Office of Financial Regulation's securities fraud unit to investigate.