Chief of New Mexico’s educational pension board steps down after disclosure of $350K loan

NM pension chief resigns after loan is disclosed

ALBUQUERQUE, N.M. — The chairman of New Mexico’s educational pension fund resigned after it was disclosed he borrowed $350,000 from a man whose son shared in millions of dollars in finder’s fees from investments by the fund and another state agency.

Bruce Malott’s resignation from the Educational Retirement Board and his loan arrangement was reported Thursday by the Albuquerque Journal.

Malott told The Associated Press he resigned because he was tired of the attention and controversy generated by a federal investigation into state investment deals, including some by the pension fund. He said he has been interviewed by federal investigators and supplied documents to them.

Malott said he informed Gov. Bill Richardson’s chief of staff of the loan Wednesday but was not asked to resign.

The Albuquerque accountant borrowed the money in August 2006 from Anthony Correra, a friend and political supporter of Richardson, to pay federal and state taxes owed because the Internal Revenue Service had disallowed tax write-offs from an investment.

Malott said he has been making monthly payments on the five-year loan with interest and it is scheduled to be repaid next year.

At the time of the loan, Malott said, he was unaware that Correra’s son, Marc Correra, had been receiving fees for helping money management firms win investments from the pension fund and the State Investment Council, which oversees state endowment funds.

Marc Correra shared in nearly $22 million in fees as a third-party placement agent, with most of that involving investment deals with the investment council, according to records of the state agencies. Marc Correra’s lawyer has said there was no wrongdoing.

Malott said he learned in May 2009 of the younger Correra’s fees when the pension agency released records showing payments to third-party placement agents on some of its investments.

He said he didn’t resign from the board at that time because of “general embarrassment” and because he had been named in a defendant in a whistleblower lawsuit by the pension fund’s former chief investment officer, who has alleged a “pay-to-play” scheme in which political considerations in the Richardson administration influenced investment decisions.

“I was like, ‘Well, I didn’t do anything wrong as a result of this so I will continue. I love the ERB. It was passion. It breaks my heart to have to resign,” Malott told the AP.

Gilbert Gallegos, a spokesman for Richardson, said Thursday the governor was not aware of the loan and has accepted Malott’s resignation.

Malott was initially appointed to the pension fund’s governing board by former Gov. Gary Johnson, a Republican, and he was reappointed by Richardson, a Democrat. Malott and his accounting firm had served as treasurer of Richardson campaign committees.

Anthony Correra served as a director of a nonprofit foundation that Richardson formed to do voter registration ahead of the 2004 presidential election.

Malott said he met Correra in 2004 but cut off their relationship last May after learning that Correra’s son was making money off pension fund investments.

“I realized that Anthony Correra had duped me,” said Malott. “He was not the friend that he pretended to be,” Malott said.

The elder Correra is a close friend of former state investment officer Gary Bland, who was appointed by Richardson but resigned last year amid a federal grand jury and Securities and Exchange Commission investigation into state investments.

Correra served on a committee that recommended Bland for the investment officer position after Richardson was elected in 2002. Anthony Correra and his investment management firm contributed $27,800 to Richardson’s 2002 campaign for governor.