October 21, 2008 - 9:01am

Press Release

Pennacchio Continues to Demand Accountability for Lehman Investment

By John Gorman

Does State's Exit from Failed Lehman Brothers Investment Hold the Key to Determining Why the Pension Council Became Involved in the First Place?

State Senator Joe Pennachio (R-Morris, Passaic) questioned today if the same person or persons who determined that New Jersey should rid itself of Lehman Brothers Stock were the same individuals who had the pension fund invest $178 million in Lehman in the first place. New Jersey subsequently lost $115 million of the $178 million investment in three short months. This occurred at a time when Lehman was being rejected worldwide for capital. New Jersey could have been the last major institution to abandon Lehman, prior to it's bankruptcy.

"I wonder if there were inside conversations with Lehman prior to its bankruptcy, which allowed the Pension fund to salvage some money, " questioned Pennacchio. "Could it be these same individuals were responsible for the state involving itself in the first place?"

Senator Pennacchio has requested the investment record and financial disclosures of Council members who had ties to Lehman through the Open Public Records Act (OPRA). He has also questioned their level of involvement.

"Any person of reason could see that this Pension Council should never have been involved with Lehmans in the first place, " stated Pennacchio.

To date, administration and pension officials have yet to answer the Senator's questions.

JOHN GORMAN can be reached via email at jgorman@njleg.org.

Related topics: Pennacchio, Lehman Brothers, Pension Council

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