Mass. Governor Balks At PRIM Executive Director Replacement Plan

September 5, 2003 (PLANSPONSOR.com) - Republican Massachusetts Governor Mitt Romney is crying foul over state Treasurer Timothy Cahill's plan to dismiss the state pension fund director in favor of a handpicked successor.

Romney demanded that Cahill, who also serves as chairman of the Massachusetts Pension Reserves Investment Management board (PRIM), not try to install Steven Weddle as the new executive director at the next meeting of the nine-member pension panel October 7, according to a Boston Globe report.

This comes after last month’s sudden dismissal of James Hearty, when Cahill drummed up the necessary support from four of the other board members (See  MA Pension Executive Hit With Sudden Ouster ) to call for Hearty’s removal.   At the time, Cahill praised Hearty’s performance, but said he was frustrated at what he felt was an agency that was too entrenched. He cited, for example, the agency’s refusal to release records about the fund’s investments in venture capital and private equity funds, even though it had been ordered to do so by the Massachusetts secretary of state and attorney general’s offices (See  Massachusetts Pension Fund Under Fire ).

Search By Committee

Romney thinks something may be rotten in the state of Massachusetts and is demanding the PRIM board appoint a search committee to “thoughtfully, thoroughly, and openly consider a field of candidates” for the job.   Noting that most board members know little of Weddle – who has been doing corporate finance, venture capital investing, and economic development from postings in Lusaka, Zambia, and Johannesburg, South Africa since 1993 – Romney spokesman Eric Fehrnstrom added, “the governor believes board members have a duty to make sure they are selecting the most qualified individual to run the fund,” and that the “best way to fulfill that is by establishing a search committee of the board to consider a large field of candidates for the position of executive director.”

Further echoing the governor’s comments was top Romney financial aide and the governor’s designee to the $29-billion state pension fund’s board, Peter Schwarzenbach.   In a letter to Cahill, he referred to the “purported termination” of Hearty, and expressed concern that the “selection” of Weddle “was without benefit of an open and organized search process and without the deliberation and involvement of all of the board members.”

However, Cahill is standing fast, telling the Globe, “I believe we have the best person for this position and I’m going forward with this, I believe we have the support of the board to do it.”   He said an internal search his office conducted for a new executive director “really isn’t that much different than previous processes” that selected executive directors.

To support his drive, Cahill pointed out that Hearty and the two previous executive directors either worked at the pension fund or served on its board before their appointments, and that Weddle would be the first outsider in more a decade to run the agency.

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