Pennacchio Welcomes U.S. Attorney’s & N.J. A.G.’s Involvement Into Lehman’s Collapse
Senator Joe Pennacchio (R-Morris, Passaic), announced today that he will file requests under the state’s Open Public Records Act (OPRA) regarding the bankruptcy of Lehman Brothers Holdings Inc. The financial collapse of Lehman Brothers cost the New Jersey pension systems more than $115 million.
“I welcome the investigations into the collapse of Lehman Brothers by the United States Attorney for the District of New Jersey, the United States Attorney for the Eastern District of New York and the Attorney General of the State of New Jersey. Lehman Brothers and six other firms including Barclays PLC were issued subpoenas this week to determine if investors were misled prior to the failures on Wall Street.
“It is beyond disturbing that one of the members of the State Investment Council that decided to invest was a managing director at Lehman Brothers. Following the sale of some of Lehman’s assets to Barclays PLC, that same director W. Montgomery Cerf, is now a managing director of Barclays.
“I intend to issue requests under the Open Public Records act to determine when and under what circumstances the members of the State Investment Council decided to invest in a firm already in the throes of financial collapse. I also intend to ask when the members of the State Investment Council divested themselves of any interests in Lehman Brothers.
“The obvious conflicts of interest surrounding the investment in Lehman Brothers are troubling. More troubling is the apparent lack of oversight by the administration. In this matter, neither the Corzine Administration nor the State Division of Investment has been forthcoming about the circumstances concerning the loss of $115 million of the taxpayer’s money. Middle-class property taxpayers deserve openness and transparency concerning the use of their money, in an apparent attempt by the good old boys network to prop up one of their friends firms.”
The state invested approximately $180 million in state funds with Lehman Brothers in June 2008. By September, when Lehman eventually filed for bankruptcy protection, New Jersey’s pension funds had lost approximately 64 percent or $115 million.
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October 29, 2008
