Sink Must Release Secret Information About SBA Middleman Payments

The obvious question that comes to mind is if the middlemen in all of this have donated to Alex Sink's 527 she has set up for her campaign which has not been transparent like she promised. She wasn't truthful if she was going to set one up when she had already signed the papers so we expect little in the way of transparency from Alex Sink.

The very idea that Sink, as the Chief Financial Officer of Florida, is using a Middleman paying over $1M for each pension fund to get them in the door is outrageous. Kentucky goes straight to the pension fund instead of using a Middleman which speaks volumes. If Kentucky can do it, why can't Florida? It would mean Florida doesn't have to waste all the tax dollars on a Middleman. It would also stop the influence peddling by these Middleman.

Who are these Middlemen who are pocketing millions for opening a door to a pension fund? How much money has it cost the Florida taxpayer that should have been invested? Most importantly why is the State not required to divulge the names of the Middlemen when they are getting paid millions of Florida taxpayer dollars? This smells.

With all of this mismanagement lying in her wake, Sink wants to move from Chief Financial Officer to Governor of Florida where she controls the whole state? What a scary thought -- Sink being in charge of all the State resources with no one to oversee what she is doing. That would be one sure way to run the Florida economy straight into the ground. Does she have a plan to fix the economy or is her plan to hire more consultants and use more Middlemen to do business paying them millions?

This SBA comprised of the Governor, Chief Financial Officer, and Attorney General needs revamped if this is an example of what these people are doing with Florida tax dollars. Where is the oversight? Is this why McCollum would prefer Sink so she can keep a lid on all of this since he was a member of this group as Attorney General.  Might explain some of the Charlie Crist odd comments as well.  Personally think this fund needs investigated right along with the three people in charge.

Sink Must Release Secret Information About SBA Middleman Payments
October 7, 2010

FORT LAUDERDALE, FL – The St. Petersburg Times reported this morning on more troubling revelations about paying middlemen for deals between private funds and the SBA, a state agency Chief Financial Officer and former banker Alex Sink is charged with overseeing. The SBA has invested billions in private funds since December and many of those transactions were arranged through a “placement agent” between the funds and the SBA, making an average of $1.5 million according to the St. Petersburg Times. The SBA has not publicly disclosed which funds utilized middlemen and how much these “placement agents” were paid. Such arrangements were at the heart of kick back scandals involving the California and New York pension funds, according to the St. Petersburg Times.

Scott campaign spokesman Brian Burgess said, “Alex Sink and the SBA need to come clean on these secret, undisclosed payments made to middle men between the SBA and the funds in which they invest. Floridians have a right to know how much money is changing hands on the basis of SBA investments. Alex Sink and the SBA must release the secret information identifying these placement agents and how much they are being paid to play middleman for the SBA.”

To view the article, please visit: Tampa Bay.com

Background

“Florida's public pension has invested about $2 billion in two dozen private funds since December. Rather than approach the pension's staff directly, half the funds used middlemen to get in the door. They paid these well-connected placement agents millions of dollars for making introductions and setting up meetings. Average finder's fee: about $1.5 million.” (Hundley, Kris “Florida public pension funds keep quiet on millions paid to middlemen,” St. Petersburg Times, 10/7/10)

“Baloney, says Christopher Tobe, a veteran financial adviser and trustee of the Kentucky Retirement Fund. Tobe is among the growing number of experts who say funds that use third-parties, rather than going directly to a pension plan, are perpetuating an unnecessary and poorly regulated system that's proved vulnerable to abuse. ‘It's blatant corruption,’ he said. ‘There's really no reason for placement agents unless you want to get money to somebody through the back door.’” (Hundley, Kris “Florida public pension funds keep quiet on millions paid to middlemen,” St. Petersburg Times, 10/7/10)

“But after such intermediaries were found to be at the heart of kickback scandals at public pensions in New York and California, those states have taken tougher stands… And just last week, in the wake of problems at public pension funds, the Securities and Exchange Commission started requiring registration of placement agents.” (Hundley, Kris “Florida public pension funds keep quiet on millions paid to middlemen,” St. Petersburg Times, 10/7/10)

“There's just one catch: [SBA Executive Director Ashbel] Williams' definition of disclosure does not extend to Florida's pensioners or taxpayers. His agency gets to know what the middlemen are paid. But the public — told that pension investments are made on merit, not on who you know — cannot find out how much money changed hands before a deal went down.” (Hundley, Kris “Florida public pension funds keep quiet on millions paid to middlemen,” St. Petersburg Times, 10/7/10)
The reason? The SBA won't release the information if investment funds want to keep it secret. And they all do. For example, Florida recently invested $100 million of pension fund money with GSO Capital Partners. The company said disclosing what it paid a placement agent would ‘harm our business efforts.’” (Hundley, Kris “Florida public pension funds keep quiet on millions paid to middlemen,” St. Petersburg Times, 10/7/10)

"But Susan Lerner, the head of Common Cause New York, said taxpayers end up footing the bill. ‘The funds that use these intermediaries negotiate a somewhat higher management fee so that nothing comes out of their profit margin,’ she said. ‘Those fees just get passed through. The public is paying for it.’” (Hundley, Kris “Florida public pension funds keep quiet on millions paid to middlemen,” St. Petersburg Times, 10/7/10)