One of the famous, albeit not the most important of the old-time political bosses, was George Washington Plunkitt. Although he was well known in New York City political circles in the late-nineteenth and early-twentieth centuries, his enduring fame came from a very short book with a very long subtitle: Plunkitt of Tammany Hall: A Series of Very Plain Talks on Very Practical Politics, Delivered by Ex-Senator George Washington Plunkitt, the Tammany Philosopher, from his Rostrum—the New York County Courthouse Bootblack Stand. Journalist William Riordan listened to Plunkitt’s talks and published them as interviews in various local newspapers. In 1905, he published them in a book, which became a classic on American urban politics, one still widely read today. Amidst political cynicism, Plunkitt also preached the virtues of hard work, sobriety, and even (as in this talk on “honest graft”) honesty.
The current state Treasurer of South Carolina is Curtis Lofton, Jr. and he seems to have some integrity. A recent New York Times article on the management, or lack thereof, of South Carolina’s state pension assets illustrates how one person can stand up to greed.
The issue in South Carolina, like many states is getting a high enough return on pension investments so as to minimize contributions and thus be able to keep taxes, particularly on wealthy people, low. So
South Carolina went out
and hired themselves a hot shot investment manager, paid him big bucks and got
million in management fees. By last year, that figure had soared to $344
million, including performance fees. South Carolina
But maybe those fees were in error.
For instance, Mr. Loftis decided to take a closer look at the fees charged by just one of the state’s dozens of outside fund managers. The examination reduced the state’s fees by $18.1 million, Mr. Loftis said. He added that the fund manager called the difference a “reporting error.”
Yes, that’s what Wall Street investment managers call it when they overcharge a client by $18 million, it’s a reporting error. As for performance
are now left with many high-cost investments that in many cases have fared
worse than old-fashioned stocks and bonds. The South Carolina fund earned 3.1
percent, annualized and before fees, in the three years through last June, the
end of its fiscal year, versus 4.6 percent for all public pension funds tracked
by Wilshire TUCS. (But the fund would fare better in the next six months,
besting the national average for the three years through December.) South Carolina
Wow, 3.1%, what a performance. See a person could go to their broker, buy something good and safe and liquid like GE Capital Bonds and earn more than that. But then Wall Street investment managers wouldn’t get those great fees.
As for the person who racked up all this fee expense for
Mr. Robert L. Borden
What is also certain is that Mr. Borden is long gone. Mr. Borden, who resigned last December to join a private investment firm, says he is proud of what he accomplished in his nearly six years at the helm of the $24.5 billion South Carolina Retirement Systems.
Now who wants to bet against the idea that Mr. Borden went to work for one of those firms that got big fees from the South Carolina Pension Fund? Anybody, really anybody. Nobody huh.