The administrator of Florida's pension fund on Monday defended his response to a state senator's "extraordinarily large" public records request and his decision not to fill an agency watchdog position, stances that earned him terse lashings from top elected officials just weeks ago.
Ash Williams, State Board of Administration executive director and chief investment officer, told an SBA panel that fulfilling the request of Sen. Mike Fasano, R-New Port Richey, for information relating to a $125 million investment of public pension money in a hedge fund requires locating thousands of documents -- not pages. The hedge fund is Starboard Value and Opportunity, a spinoff of Ramius LLC.
In letters dated Oct. 6 to Judy Goodman, SBA audit committee chairwoman, and Robert Gidel, investment advisory committee chairman, CFO Jeff Atwater asked them to review how how investment opportunities are identified, investment advisors are selected and procedures for fulfilling public record requests.
On Monday the audit committee spent an hour and a half interpreting Atwater's directive and deciding how to move forward.
Williams divided her duties among other units within his agency, he said, such as the enterprise risk management and compliance units, as well as the general counsel. Like other agencies, the SBA is "constrained on resources,"* he said, so it made sense to spread those functions to other people rather than hire another full-time executive to take on what he considers a light workload.
He will fill the position, per Atwater's request, though he wishes the SBA would continue to follow the prevailing private sector model, which omits the inspector general position in favor of compliance officers.
"We're in state government. Being in state government matters, and appearances matter. One of the expectations common to state government is having an inspector general," he said."
Fasano's road-blocked request for information brought the unfilled position back to light. In a letter, Atwater told Williams he was frustrated that the position continued to go unfilled. Atwater wanted Williams to present a candidate to the Cabinet in its first November meeting.
While he has talked to a few candidates, Williams has not formally started a search, he said, as "there's no earthly way" to complete it in the timeframe Atwater wants.
Auditors prodded Williams about the public records spat. He said it all really started in July 2010, when the St. Petersburg Times raised questions about two firms he knew from years in the private sector that were contacted by the SBA for investment opportunities. The inference of the stories, he said, was that he had a conflict of interest and introduced the firms to the SBA. The charge that he meddled with the managers would be "virtually impossible" under the SBA's "multiple layers of internal and external checks and balances."
That led Fasano to make his first request for records about the Ramius investment in June. Williams offered him a couple options for fulfilling the order but Fasano did not choose one. Instead Williams received a broader request from Fasano in August, which led to the ongoing flap over the bill.
Fasano received a portion of his request last week. Williams did not reference the amount he billed Fasano for the request, which was about $10,750. At a Cabinet meeting Oct. 4, Attorney General Pam Bondi called the bill "indefensible."
"The scale of it is extraordinarily large," Williams said on Monday.
Audit committee vice chairman Rodolfo Engmann asked if an SBA inspector general would be the right person to investigate complaints of inappropriate contacts with advisors.
"I don't know that we've ever had an allegation of that nature, first of all," Williams said. "And secondly, I don't know that the presence of an inspector general ... would necessarily have had bearing because the functions of the inspector general were covered either way. And in addition, we still obviously have access to the chief inspector general, with whom I've discussed this matter."
Was there a plan for a concern of this nature? asked committee member Kim Ferrell. The plan was always, Williams said, to go to the chief inspector general, currently Miguel, if the need came up. Goodman wondered if Miguel's short tenure at SBA posed a conflict of interest for that scenario.
The audit committee and investment advisory committee will discuss their reviews Nov. 14.