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August 4th, 2010

Retirement Funds Not Teddy Bears

What does a $500 Million dollar IPERS investment made by State Treasure Michael Fitzgerald get State employees?  The world’s largest collection of stuffed animals, a horse ranch and a house in the same neighborhood as late night comedian David Letterman. Unfortunately, this mismanagement of money is no laughing matter.  Michael Fitzgerald’s failure to protect Iowa’s retirement funds has cost the state hundreds of millions of dollars, most of which will never be recovered.
In October of 2006, the IPERS board, led by Treasurer Fitzgerald, invested $500 million dollars of Iowa’s retirement funds in Westridge Capital Management of Santa Barbara, California.
For the next 22 months hard-earned taxpayer dollars were used to supply a high-end lifestyle for the principals of Westridge, Paul Greenwood and Stephen Walsh. Greenwood used Iowans’ money to purchase a collection of 1,350 stuffed animals including one teddy bear valued at more than $80,000.  Yes, a teddy bear valued at $80,000.
Fitzgerald claims he did what was necessary to protect Iowa’s investment. But a simple Internet search would show Westridge was involved in litigation in Nebraska over the loss of $40 million in state pension funds.  It would also show offshore accounts which are not standard for pension investments, a host of previous shady deals starting in 1985 involving Walsh and Greenwood, as well as many other tell tale signs Westridge did not have Iowans’ best interests in mind.
Greenwood and Walsh have since been charged with securities fraud. However, these charges won’t bring back all the money Fitzgerald lost for Iowans. IPERS money will be tied up for years in costly lawsuits and it is very doubtful the state will even recover half of what was invested.
Iowans cannot afford to have a Treasurer who lost $500 million dollars by failing to do simple research. After 28 years of mismanagement it is time to show Michael Fitzgerald the door. Iowa needs new leadership. As your next State Treasurer, I will work to ensure investments are secure and profitable for Iowa.

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The Iowa Republican

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