NEW MEXICO EDITORIAL FORUM
By Sen. Timothy M. Keller
Almost 10 years ago, our country was coping with a series of corporate accountability crises in the wake of Enron, World Com and other breakdowns in organizational governance. Widespread public outcry led to responses through our legal system and in Congress. Hundreds of lawsuits were filed in an effort to retrieve squandered funds and lawmakers responded by passing the Sarbanes Oxley Act. It’s now time for New Mexico to act.
Currently, a similar crisis faces state pension and investment funds across the country and at home in New Mexico. Our State Investment Council (SIC) has been drained by scandal costing over $5 million in legal fees. State funds finished 2009 in the very bottom 1 percent of performance nationwide, down a whopping $2 billion. Like those affected by Enron, our citizens and state should push legal actions to get our money back. We must also address the state investment fund’s inherent structural flaws much like Congress did with Sarbanes Oxley to prevent further deterioration of investor confidence and improve performance.
A central tenet of good governance is to have any board of directors be as diverse in experience as possible. Much attention has been given to ideas directed at diluting the Governor’s influence on our SIC. This idea is warranted, however, it’s only the tip of the iceberg. Our state has numerous structural conflicts of interest built into statute.
By Sen. Timothy M. Keller
Almost 10 years ago, our country was coping with a series of corporate accountability crises in the wake of Enron, World Com and other breakdowns in organizational governance. Widespread public outcry led to responses through our legal system and in Congress. Hundreds of lawsuits were filed in an effort to retrieve squandered funds and lawmakers responded by passing the Sarbanes Oxley Act. It’s now time for New Mexico to act.
Currently, a similar crisis faces state pension and investment funds across the country and at home in New Mexico. Our State Investment Council (SIC) has been drained by scandal costing over $5 million in legal fees. State funds finished 2009 in the very bottom 1 percent of performance nationwide, down a whopping $2 billion. Like those affected by Enron, our citizens and state should push legal actions to get our money back. We must also address the state investment fund’s inherent structural flaws much like Congress did with Sarbanes Oxley to prevent further deterioration of investor confidence and improve performance.
A central tenet of good governance is to have any board of directors be as diverse in experience as possible. Much attention has been given to ideas directed at diluting the Governor’s influence on our SIC. This idea is warranted, however, it’s only the tip of the iceberg. Our state has numerous structural conflicts of interest built into statute.
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