Chief of New Mexico Pension Resigns

(September 3, 2010) — Bruce Malott, the chairman of New Mexico’s $8.55 billion educational pension fund, resigned following a questionable $350,000 loan.

Malott’s resignation from the New Mexico Educational Retirement Board came after he revealed to board officials that in August 2006, he borrowed money from Anthony Correra, whose son, Marc Correra, was a political donor to Governor Bill Richardson. The Albuquerque Journal reported that Malott, a former campaign treasurer for Richardson, used the money to pay $290,000 in federal taxes and $50,000 in state taxes that he owed after the US Internal Revenue Service determined that a limited-liability company set up by him and others was used to avoid taxes. Malott reportedly denied allegations of using a placement agent, telling The Journal that when he obtained the loan, he was unaware that Correra’s son, Marc, was getting paid by money managers to help them win business with the teachers’ pension fund and the State Investment Council, which manages $13.5 billion in New Mexico’s endowment funds.

Malott told the AP that in May 2009, he discovered Marc Correra’s fees when the pension agency released records showing payments to third-party placement agents on some of its investments. “I realized that Anthony Correra had duped me,” said Malott, according to the news service. “He was not the friend that he pretended to be,” he said, adding that he cut off his relationship with the Correras last May after learning that Marc was making money off pension fund investments.

A notice on the board’s website  revealed that as a replacement, Mary Lou Cameron, New Mexico’s Educational vice chairwoman, will serve as chairwoman until the board elects an officer, possibly as early as the next board meeting on September 16. Governor Richardson will appoint a new member to the board shortly, according to the release on the board’s site.

Last year, Frank Foy, former New Mexico Educational chief investment officer, sued Malott on behalf of the state. Foy claimed he was pressured to use investment firm Vanderbilt Capital Advisors, which had contributed to Richardson’s presidential campaign.