Bock: Money managers “wouldn’t call us back”

Palm Beach County Clerk and Comptroller Sharon Bock was smiling – the smile of pride and satisfaction at having “protected the people of Palm Beach County,” Commissioner Burt Aaronson offered last week.

In fact, and following losses totaling hundreds of millions of dollars by other Florida governmental entities in the State Board of Administration (SBA)/Local Government Investment Fund meltdown last fall, Bock told commissioners last week that Palm Beach County lost only $60,000. 

“And I’m working to get that back,” she smiled.  

Bock appeared before commissioners to discuss the current state of the county’s investments in general.  She reported all was well on the county’s current $2.1 billion investment fund – and upon which in 2007 the county earned $101 million in interest

But Bock’s primary remarks were reserved for the LGIF fiasco of last fall.

Bock described her office’s approach as “day-to-day management – and we saw very early on” that the LGIF was in trouble.”

The SBA was investing LGIF funds in high yield, mortgage back funds, she said, and at one point was “paying one percent more” than any other market fund in the US.

“What was so troubling to us,” Bock said, was that, and when her office asked questions, “the (LGIF) money managers wouldn’t call us back.”

There was “a lack of transparency,” she said, and which prompted her office to begin withdrawing “all of our cash early in September” 2007.

“We took the last $10 million out one day before withdrawals were frozen” last November, Bock told commissioners.

Beyond that, Bock told commissioners that her office is the “first local government in the nation” to have achieved accreditation by FI 360, a global fiduciary firm seeking to elevate and standardize fiduciary practices worldwide.

Bock described her office’s role as that of an “investment steward”. In turn FI360 says that its accreditation is “an independent recognition of an investment steward’s conformity to all fiduciary practices defined by the Prudent Practices for Investment Stewards handbook.”

“Whole”

Bock went on to say that the current investigation of the SBA and in turn its management of the LGIF, appears to be leaning toward those who where diligent, like Palm Beach County, being used to make those who weren’t, financially “whole.”

“The other shoe hasn’t dropped,” agreed to County Audit Committee and Commissioner Jeff Koons. “The SBA didn’t know what it was doing.”