By Lee Hedgepeth
Alabama Political Reporter
A fight has been brewing in the state over the fate of day-to-day decision making regarding the investments of the Retirement Systems of Alabama, which manages the Employee Retirement Systems, making it one of America’s twenty largest public pension investment funds in the United States.
Governor Robert Bentley, who is the the chairman of the ERS Board of Directors, previously gained the power to appoint board members despite outspoken opposition by Dr. David Bronner, CEO of RSA, who has had sole discretion over investments for over four decades as the ERS Treasurer/Secretary.
Dr. Bronner claimed that Bentley’s efforts to make the board “political” would lead to devastating consequences, but the Governor’s Office and ALGOP leaders contended that the move was aimed at keeping the board accountable and effective. Representative Lynn Greer (R-Rogersville) said that she had “always questioned” one person having power over the fund.
After he had gained appointment power, Bentley appointed Curtis Stewart, who began serving his term this year. Stewart has frequently been an advocate for more transparency on investments, but many pundits were surprised when he proposed a resolution that would require Dr. Bronner to come to the Investment Committee for approval on investment items. As APR reported, the resolution passed the body last week. It included a provision providing for a decision on how to pragmatically move forward in February.
Dr. Bronner, who has faced recent GOP attack for calling Medicaid expansion under Obamacare “the deal of the century,” says that this resolution is “probably” politically motivated. He claims that investment decisions he makes are time sensitive, and that committee management is not practical. Bronner used the example of getting a call offering the sale of IBM stock, a decision that he stresses cannot wait for a meeting.
While this sounds reasonable, some recently questioned Bronner’s discretion on even simpler matters when he boasted adding several elevators in one of RSA’s real estate holdings so he could easily remember the number: 80.
In any case, Curtis Stewart says that the new rule has a purpose of making sure that these decisions “comply with state law.” He denies that the decision to offer it was a political one and says, as we have reported, that he made it independent of the governor.
The Office of the Governor has not commented on the resolution as of yet.
The political — or nonpolitical — battle continued in recent days when Democratic Representative Johnny Mack Morrow of Red Bay announced that he will propose legislation in the upcoming session aimed at, in his words, giving David Bronner back his “total unilateral control” of investment funds. His argument, similar to Bronner’s, is one of expediency. In the Wall Street world, one does not have room for committee meetings.
As APR reported earlier, Bronner, challenging the change, said “If you do this, what do you need me here for?” Apparently, Bronner’s political allies have no intention of ever seeing that question answered, if they have their way; however, with Republican super-majorities in both Houses of the state legislature, any bill would require bipartisan support– something that, as of now, Morrow and Democrats do not have.