Millard was the subject of intrigue in the financial community long before the Senate caught wind of him -- which as we have seen is too often the case with obscure public officials charged with overseeing multibillion dollar sums of retirement funds they are free to farm out to hedge funds and Wall Street money managers at will.
But even in the ethically compromised world of pensions Millard raised eyebrows. A former New York City Councilman and friend of Rudy Giuliani's who did not actually know what the PBGC was when he was offered the job, he threw himself into the pursuit of a bizarre new investment strategy that rotated the fund's investments out of bonds, which had previously dominated the portfolio, into 55% stocks and real estate, including 19% foreign stocks and 6% emerging market stocks.
The shift was supposedly recommended by a Connecticut consultancy called Rocaton Investment Advisors, a firm whose pension fund advice had been called into question the year earlier when a San Diego pension fund cut its ties with the firm over a hedge fund investment gone sour. (Rocaton eventually paid the fund $2.5 million to settle the matter. Rocaton's models showed that stocks, over the long term, had the greatest likelihood of generating the returns necessary to fend off a federal bailout of the fund -- even though it is no secret global stocks have wildly underperformed government bonds over the past ten years.
Pension experts interviewed by Institutional Investor had few words for his plan -- which was internally called "North Star" -- not synonymous with "insane." But the most telling testimonial in the piece might be the individual behind the one positive quote about Millard, from an old law firm buddy of his:
When Charlie takes on something, he puts for 100 percent of his effort to do it well.That, at least, is the opinion of one Paul Atkins, a former SEC commissioner known as "Dr. No" for repeatedly voting against fining companies for breaking securities laws and engaging in malfeasance. Atkins resigned last year -- but not, as we know all too well from last week's amazing OAG report on the Bush era SEC -- before making a devastating mark on his own agency.
It sure looks as though his friend Millard gave him a run for his money. (And ours.)