Showing posts with label Mazza NYCERS. Show all posts
Showing posts with label Mazza NYCERS. Show all posts

Monday, May 24, 2010

Layoffs and the History of Investment Expenses for the Five City Pension Funds

At the beginning of May the mayor announced that as part of his FY-2011 budget he was planning to cut the city payroll by 8,270 positions. Assuming a savings of $70,000 per position per year this represents a $579M annual savings. The heaviest hit will be to teachers with a 5,200 reduction.

The following is a history of the growth in investment expenses for the five city pension funds. Fiscal years 2010-11 are based on budgeted figures and projections.

The city and the public authorities must pay back these costs plus 8% interest in the following year after the costs are incurred. For example in 2010 the city had to pay to the five pension funds $339M plus $27M in interest to cover the $339M expense incurred in 2009.

These investment expenses have gone up 336% from 2002 to 2009 and the investment performance has been terrible.

Besides their huge size and rapid growth there are two disturbing aspects about these investment expenses. One is the lack of oversight by the pension funds of these costs and the other is the fact that significant portions of the costs are not itemized and not attributable to specific vendors.

For example, NYCERS is on record in its FY-2009 financial statement as having paid $25.5M for a private equity organization cost and $1.6M to a real estate organizational cost and $1.6M for miscellaneous investment expenses. A person reading this report would have no idea who received this money. This is in sharp contrast, for example, to the clear indication that NYCERS paid $5,522 to PriceWaterhouse Coopers listed on the same page as the phantom $25M.

This vague description raises an auditing red flag. Unfortunately, the trustees have allowed the comptroller to make these payments without oversight. To make matters worse, the comptroller is the statutory auditor of these payments.

Year Investment Expenses For Five City Pension Funds NYCERS Investment Expenses
2011$460.0M$190.0M
2010$390.0M$160.0M
2009$339.2M$138.1M
2008$310.2M$115.3M
2007$262.0M$ 98.1M
2006$192.7M$ 69.3M
2005$158.2M$ 46.1M
2004$131.6M$ 42.9M
2003$ 96.6M$ 29.2M
2002$101.9M$ 37.6M
2001NA$ 33.9M
2000NA$ 37.2M
1999NA$ 24.6M
1998NA$ 25.5M
1997NA$ 25.1M

Friday, June 5, 2009

Perjury at NYCERS

Listed at the end of this posting is part of an interview of a NYCERS employee, Felita Baksh, conducted by a NYC Dept. of Investigations (DOI) investigator, Daniel Lau, on July 13, 2004. Following the text of the interview is a excerpt from a letter written by Vincent Green, a DOI IG for Finance, on March 1, 2005. Finally, there is listed a part of DOI interview conducted, also on July 13, 2004, with another NYCERS employee, Karen Mazza, who contradicts Baksh's testimony.

Based on the DOI excerpt it is quite clear that Baksh lied under oath when being questioned by DOI. At the time Baksh was the HR director at NYCERS and still is. Mr. Lau, however, was not the chief investigator assigned to the investigation. That person was Carol DeFreitas.

Strangely, Ms. DeFreitas was an employee of the Department of Finance and not DOI. In late December, 2003 she was loaned to DOI through an agreement between Martha Stark, the Finance Commissioner, and Vincent Green, the IG for Finance.

The NYCERS Board of Trustees had originally requested the investigation which was the reason for the interviews. Subsequently, at the close of the investigation Vincent Green, in the March 1, 2005 letter, failed to report the perjury by Baksh to the NYCERS Board of Trustees. The letter was addressed to Martha Stark who was also the chair of the NYCERS Board. In addition, Green misstates what Mazza had actually admitted in her testimony. He also never mentions the fact that Mazza attempted to destroy emails between her and Baksh involving the resume or the fact that DeFreitas allowed Mazza to hide the emails with help from the LAN administrator at NYCERS.

In light of the circumstances surrounding Stark's recent forced resignation, this reporting failure by Green raises many questions. There is also the fact that in September, 2005, as part of litigation against NYCERS an attorney at the NYC Law Department was notified of allegations of Stark's involvment with an senior employee at Finance and other more serious charges involving pension investments. That attorney was Paul Marks.

Unfortunately, Baksh is still the HR director at NYCERS. She has since changed her name to Ramsami. Since 2005, Baksh has terminated dozens of NYCERS employees for trivial infractions. In addition, COIB has since found Baksh, a.k.a. Ramsami, in violation of NYC Charter regulations, in particular using a subordinate's credit card.

Inconceivably, Baksh subsequently fired the subordinate with an assist from Mazza. It may have something to do with the fact that the subordinate knew that Mazza had administered the final writing test to Baksh in 2004, which was the basis of her hiring as HR director.

Early this year I notified the NYCERS trustees and the DOI Commissioner of Baksh's perjury. Only one trustee, the Public Advocate, responded by forwarding the complaint to DOI. DOI responded to the the Public Advocate who then again notified me. I wonder how long it will take DOI to produce a professional response and how long the trustees will allow Baksh to stay as HR director?

From July 13, 2004 Baksh interview with DOI:

Lau: On that note, I’m only going to re-ask you one question and you’ve answered this before but I just want to make sure. I want to affirm that you are still under oath. That when you applied for the position nobody helped you with your resume, you said.

Baksh: No, no one changed anything on my resume. The only change that I remembered that they said and I remembered it because the e-mail said there’s only one thing that I’m missing. I’m sorry that we have to change this is on the cover letter.

Lau: And that was who?

Baksh:I’m a stickler or something like that.

Lau:That was Karen?

Baksh: Yes. I’m sorry. (phone rings)

Lau: Sure.

Baksh: That’s gotta be my children ……… - Sorry.

Lau: No problem. So you were saying. So Karen didn’t - just the cover letter.

Baksh: Yeah only the cover. She only did one – right.

Lau: One minor correction.

Tavarez: But Niki made the cover letter?

Baksh: Huh?

Lau: Well Niki also reviewed the cover?

Tavarez: Niki was the one who reviewed your cover letter

Baksh: They both but Niki – but Karen is the one that’s probably – I think Karen was the one who said it’s just that one word in the cover.

Tavarez: That was it. That was it.

Baksh: Niki didn’t have any changes to my resume. None at all. And I remember saying, you didn’t see anything you would change – any wor and she was like – no. But I think she was too busy. You know she just she was just getting into her position too.

From March 1, 2005 DOI report:

In addition, Karen Mazza, the NYCERS General Counsel, acknowledged to this office that she helped Baksh with her resume by suggesting she move things around. "

From July 13, 2004 Mazza interview with DOI:

Ancrum: Karen, the letter writer indicated that you had helped Felita in her application process. Specifically with her resume.

Mazza: The answer to that is yes. I help a lot of people with their resume. I have a reputation within our agency and among people who know me as being a real stickler for resumes. I’ve done a lot of interviewing over the course of my career – not myself – interviewing people and hiring – um – so people know I will look for and I will find, you know, the comma that’s in the wrong place, or the, you know, when you switch from plural to singular in the paragraph. So a lot of people come to me and ask me to look at their resumes and I never say no, and she came to me and asked me if I would look at her resume and I said yes.

DeFreitas: Did you look at anybody else’s resume that applied for the position?

Mazza: Nobody else – I didn’t know anybody else who applied – I said – I take that back. I do know Aurora Perez – I know her because our kids went to Pre-K together – our kids are not in 5th grade – but I don’t know her – but she would never call me and ask me to look at her resume.

DeFreitas: Did you make changes, Karen, to her resume?

Mazza: I suggested, you know, I may have suggested like, you know, switching words around or paragraphs around – like that – I don’t know if she made the changes because I didn’t…

DeFreitas: Because it was a suggestion, but you brought her into your office, you told her look – you need to change this around – do this – do that – it wasn’t something that you yourself physically took her resume and made revisions to it and made revisions to it yourself.

Mazza: She e-mailed it to me.

DeFreitas: OK

Mazza:And what I did was, you know, tracking on – how you do tracking on Word – with tracking I said I would move this here – I would do this, I would do that…

DeFreitas:OK

Mazza:So – that’s – so I didn’t meet with her to do it.

DeFreitas: Uhmmm

Mazza: We did it by…

DeFreitas: E-mail.

Mazza: Yeah.