Pennsylvania's retirement board leader quits

Treasurer McCord critical of agency

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HARRISBURG -- The chairman of the State Employees' Retirement System Board has stepped down after serving in the post for nearly two decades.

The change comes at a sensitive time for the board, which is facing allegations of improper conduct by the former SERS chief investment officer. The state pension fund has assets of about $26.5 billion, and more than 200,000 members, including retirees and beneficiaries receiving benefits and active members paying into the system.

Nicholas Maiale, who headed the SERS board under five governors since 1992, had his last day at the agency Friday and plans to resign his seat on the board later this month, according to a letter he sent to the governor.

Gov. Tom Corbett will make a new appointment to the board to replace Mr. Maiale, though there is no set timeline to do so, said Jay Pagni, a spokesman for the governor's office.

In December, state Treasurer Rob McCord, also a Democratic gubernatorial candidate, had urged the governor to replace Mr. Maiale in light of the allegations against former SERS chief investment officer Anthony Clark.

Mr. Clark is accused of "personal 'day trading' activities he was possibly conducting from his Commonwealth computer, and possibly with the benefit of information he was securing from SERS investment personnel," and "alleged failure to adequately advise the SERS Board, both pre and post Board decision, concerning a failed SERS investment held by Tiger Asset Management," according to documents detailing the allegations by a SERS employee.

Mr. Clark, who received a salary of more than $270,000 annually, retired Dec. 31. His attorney said he is "hoping for a speedy resolution to what we view as unfounded allegations." He has not been charged with a crime.

"This is an unacceptable circumstance, and accountability for it rests at the top. It is clear that a change in Board leadership is overdue," said a letter from Mr. McCord to Mr. Corbett last month calling from Mr. Maiale to step down.

Mr. McCord, who is a board member by virtue of his position as treasurer, also criticized the administration for how it handled the allegations against Mr. Clark.

"The Board was not informed by your Office of General Counsel for almost two months after it was presented with the claims of wrongdoing, but instead a law firm was selected, retained, and directed to complete an inquiry without the knowledge or consent of the Board," Mr. McCord's letter alleged. "In addition, even after receiving serious allegations of possible criminal or unethical conduct, the Office of General Counsel waited until December 3rd to inform the Office of Inspector General and to implement protocol actions related to computer-related record preservation."

Mr. Pagni said Mr. McCord's statement is "patently incorrect. Once notified, the Office of General Counsel began to take steps to interview and immediately review allegations put forth."

At its December meeting, the board voted to authorize SERS' internal audit division "to identify and recommend independent professional services to the board to provide a comprehensive and timely assessment of and advice about how to proceed with regard to allegations."

The governor designates the chairman from among the 11 members of the board. The board is composed of six gubernatorial appointees, four legislators, (two representatives appointed by the speaker of the House and two senators appointed by the president pro tem) and the state treasurer.

Five members must be active members of SERS, two of whom must have more than 10 years of credited service in the system. Board positions are unpaid, according to SERS spokeswoman Pamela Hile.

Several SERS board members declined to comment Friday on Mr. Maiale's departure.

"Since the chairman resigned via letter, I have not had an opportunity to hear any explanation, so I will not comment," said David Fillman, executive director of the American Federation of State, County and Municipal Workers Council 13, a union representing many state employees.

A spokesman for Sen. Vincent Hughes, D- Philadelphia, referred all questions to SERS.

Board member Rep. Dan Frankel, D-Squirrel Hill, said he believed Mr. Maiale had supported Mr. Frankel's efforts in the past year to bring more transparency to investments with regards to environmental issues and other social responsibility issues.

He said he is hoping to learn more about the allegations against Mr. Clark at the next SERS board meeting later this month.


Kate Giammarise: kgiammarise@post-gazette.com or 1-717-787-4254 or on Twitter @KateGiammarise.

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