A sordid affair with losers in every corner
The soap opera that has played out over Macon-Bibb County’s pension plans, usually a dull-as-dirt subject, is unfortunate. It is never good to have a rogue county manager go off the reservation no matter the motivation. Fortunately, no money was lost. However, it is unclear the direction the Securities and Exchange Commission’s investigation might take or the legal ramifications facing the county, Independent Portfolio Consultants, former County Manager Dale Walker, or other parties.
If this is all Greek to you, read Stanley Dunlap’s exclusive investigation about the entire sordid affair elsewhere in this newspaper or online. But the Cliff Notes go something like this. In 2014, County Manager Dale Walker (he abruptly resigned April 24), according to county officials, corroborated by 1,500 emails, fixed the bidding process to manage the county’s pension funds to benefit one company, the Boca Raton based Independent Portfolio Consultants. The winning bidder would net hundreds of thousands of dollars for managing the county’s three pension plans.
As the scheme unfolded, the only commissioners to object were Gary Becthel and Larry Schlesinger, because they thought the process was flawed. Becthel was the only commissioner to vote against IPC getting the county’s business on that basis.
Both commissioners raised objections again just months later when they found out that one of the consultants at IPC, Cheryl Underwood, one of the two handling the Macon-Bibb portfolio, had a prior working relationship with the county manager, a relationship he had not revealed. Schlesinger and Bechtel attempted to get the management of the pension plans re-bid, but were unsuccessful.
There are several take away lessons from this episode and a few things citizens should understand. This could have only happened if the stars aligned perfectly. First, it was at the beginning of a new consolidated government. Second, there was a new commission that was getting its feet wet and all kinds of issues were being sorted out. Third, Merrill Lynch, the company that had managed the retirement plans, decided to get out of the municipal pension management business leaving Macon-Bibb’s three pension boards with the job of finding new investment consultants.
Walker had the trust of the mayor and many of the commissioners and of the trustees of the pension boards, one of which is the commission itself. Walker came here with a resume full of experience in the pension area. Maybe too much experience for his own good. While we can’t speak to Walker’s motivation, the emails gathered through the state’s open records laws, give many clues. He may have been motivated by affairs of the heart.
One simple step would have prevented this entire fiasco. If the commission or any of the other pension boards had decided to have the other bidders for their pension business make in person presentations, it might have quickly foiled any alleged tomfoolery suspected in the scoring grid devised by the former county manager. In fact, he probably would not have tried the tactic at all. IPC would have either won or lost the business on merit alone. Also, the pension boards could have followed standard operating procedures and have three to five reviewers of the bids. The boards could have also enlisted the help of Merrill Lynch in scoring the respective bidders instead of solely relying on Walker.
Now, there is enough egg to go around. Though no money was lost, it’s more than disappointing when someone once trusted, turns out to have been repeatedly deceitful — and to no good end. IPC’s reputation is stained. This kind of stuff gets around in financial circles. The company’s two consultants that represented Macon-Bibb’s accounts have left the company. The SEC is still lurking in everyone’s future, including Macon-Bibb County’s. Walker’s long career ends surrounded in a black cloud and he’s no closer to the object of his motivation for hatching the scheme than he was before this chapter in his life started.
This story was originally published May 20, 2017 at 9:04 PM with the headline "A sordid affair with losers in every corner."