The Citizens Voice said three board members approved a $150,000 settlement with Atlanta-based FSC Securities Corp. and a $50,000 settlement with Kingston-based First Security Investments. One board member abstained due to a personal relationship with a principal of one of the firms. The $200,000 was reduced by $75,181 for legal expenses.
The federal lawsuit accuses former commissioners Frank Crossin, Joseph “Red” Jones, Tom Makowski and Tom Pizano of paying 22 money managers excessive commissions in return for campaign contributions, The Citizens Voice reports. The fund has recovered approximately $14 million less around $3.1 million in legal fees.
There has been debate surrounding the largest settlement of $11 million from Wells Real Estate Investment Trust (See Luzerne County Drops Investment Firm from Racketeering Suit ). The settlement terminated the board’s agreement with Wells and returned the county’s investment to the fund, according to the Citizens Voice. While one board member says the investment could have failed and lost millions for the pension fund, other board members say the investment could have yielded hundreds of thousands of dollars in returns if allowed to run its course.