U.S. House Education and Labor Chairman George Miller, D-Calif.

PBGC Promises to Keep Directors Out of Procurement Process

An inspector general's draft report detailing possibly inappropriate contacts by former Director Charles E.F. Millard with companies bidding to manage the pension agency's real estate and private equity investments prompts U.S. House Education and Labor Committee Chair George Miller, shown here, to open an investigation.

The Pension Benefit Guaranty Corporation is back in the news today, with Acting Director Vince Snowbarger responding to a draft PBGC inspector general's audit detailing possibly inappropriate contacts by former Director Charles E.F. Millard with companies bidding to manage the pension agency's real estate and private equity investments. Three companies -- BlackRock, Goldman Sachs, and J.P. Morgan -- were hired to manage the investments, and the audit says Millard "took an unprecedented role in the procurement process, to include serving on Technical Evaluation Panels (TEP) to formally assess some of the same Wall Street firms which whom he was in frequent contact." While this violated the principle of separation of duties, and Millard was warned his actions jeopardized the integrity of the procurement process, the audit found no criminal activity by any of the bidders.

"A draft report from the PBGC Office of the Inspector General went into circulation on Thursday. The report details the actions of former director Charles E.F. Millard in connection with the hiring of three strategic partners (BlackRock, Goldman Sachs and J.P. Morgan) to manage real estate and private equity investments for the PBGC," Snowbarger said in a statement issued Thursday. "We take the Inspector General's report very seriously. The PBGC board has accepted the recommendation that future directors refrain from involvement in the procurement process, and PBGC management will work with the board to implement. No PBGC assets have been transferred to our strategic partners for investment in private equity and real estate. We will work with our board to decide whether these contracts should be terminated and whether strategic partnerships fit into the board's investment approach going forward."

PBGC guarantees payment of basic pension benefits to 44 million American workers and finished FY2008 with a deficit of $11.2 billion, paying nearly $4.3 billion in benefits to more than 640,000 people during the year, according to its 2008 annual report. The PBGC board is chaired by U.S. Labor Secretary Hilda Solis, with Treasury Secretary Tim Geithner and Commerce Secretary Gary Locke serving as board members.

U.S. Rep. George Miller, D-Calif., who chairs the House Education and Labor Committee, announced the committee is opening an investigation of potential improprieties by Millard based on the draft report. Miller has criticized PBGC's decision to use a new investment approach, saying it inappropriately exposes part of the agency's portfolio to stock market risk.

"The House Education and Labor Committee is looking into very serious questions raised by the PBGC Inspector General that the former head of the PBGC had inappropriate contacts with Wall Street contractors. Our committee takes these issues seriously, and we plan to review this matter thoroughly," Miller said.

Download Center

HTML - No Current Item Deck
  • Free Safety Management Software Demo

    IndustrySafe Safety Management Software helps organizations to improve safety by providing a comprehensive toolset of software modules to help businesses identify trouble spots; reduce claims, lost days, OSHA fines; and more.

  • Get the Ultimate Guide to OSHA Recordkeeping

    When it comes to OSHA recordkeeping there are always questions regarding the requirements and in and outs. IndustrySafe is here to help. We put together this page with critical information to help answer your key questions about OSHA recordkeeping.

  • Safety Training 101

    When it comes to safety training, no matter the industry, there are always questions regarding requirements and certifications. We put together a guide that’s easy to digest so you can ensure you're complying with OSHA's training standards.

  • Conduct EHS Inspections and Audits

    Record and manage your organization’s inspection data with IndustrySafe’s Inspections module. IndustrySafe’s pre-built forms and checklists may be used as is, or can be customized to better suit the needs of your organization.

  • Track Key Safety Performance Indicators

    IndustrySafe’s Dashboard Module allows organizations to easily track safety KPIs and metrics. Gain increased visibility into your business’ operations and safety data.

  • Industry Safe
comments powered by Disqus
Live From NSC