Wednesday, February 27, 2013

Commissioner Pickler Did the Right Thing

Commissioner David Pickler has found himself under an ethics cloud since mid-December.  His colleague, Commissioner Martavius Jones brought the allegations at a Board meeting in a surprise resolution.  I've done some thinking, and in the end, was not all that surprised that the Ethics Committee called off its investigation of the allegations.  Not exonerated, not investigated, and still handling funds on behalf of MCS and SCS, Commissioner Pickler was not quite out from under that ethics cloud.

I'm relieved that Commissioner Pickler has now taken affirmative steps to remove even the appearance of impropriety.  Elected officials that do business with the bodies on which they sit should always face increased scrutiny and abide by high standards of disclosure and transparency. 

Without checking the budget myself, I believe Commissioner Pickler and SCS General Counsel Valerie Speakman when they say that the nature of the $12 million investment and its inclusion in the budget approved in June 2012 did not have enough information attached to it to indicate to Commissioner Pickler that his firm or employees would benefit from the investment.  All of that said, I believe that as an elected public offical, at the point that Commissioner Pickler understood from his position as the head of a wealth management firm, that the firm was managing a large investment initiated by a government body of which he as a Board member, he had a duty to investigate his involvement in the investment.  Specifically, he should have investigated how the investment originated, and then reviewed whether or not he voted in favor of the investment.  Had he done that kind of investigation, he would have discovered that, in fact, he had voted in favor of the investment.  Commissioner Pickler's next action should have been to satisfy his to duty to disclose the conflict of interest, and advise the Shelby County School Board of the situation.  I hold public officials to a high standard, and regardless of what the written rules are, there are just minimum standards of conduct by which public and elected officials should abide.  Pie in the sky, no?

Commissioner Pickler has now corrected the situation as best he can, give the timeline of events.  Michael Kelley reports that Commissioner Pickler will no longer manage Tennessee School Board Association investments associated with MCS or SCS:  "Pickler, who owns Pickler Wealth Advisers, has been the broker for the TSBA fund for several years, but he said he turned the account over to an employee whose commissions were not shared with him.
     The TSBA last Tuesday accepted Pickler’s offer to withdraw his firm completely from any involvement with funds contributed by either MCS or Shelby County Schools."

The buffering from the live online broadcast of the Board meeting last night was abysmal, but I gathered that Commissioner Pickler stated that he also offered to resign from his position at the Tennessee School Board Association, and that the offer was rejected.

Commissioner Pickler's withdrawal of his firm as an investment manager for any MCS and SCS funds is appropriate, and will erase any appearance of impropriety going forward related to Commissioner Pickler's ability to vote in favor of local district investments in TSBA's trusts.  That the TSBA has determined that it has no problem regarding doing business with one of its members and officers is not my concern.

Some further assessment of the accounts that were opened last summer will be necessary, in order to determine that the MCS investment is not assessed two separate annual fees due to the transfer of accounts to another wealth management group.  Either the receiving wealth managers should waive the initial fees or first set of annual fees to which they may be entitled, or Pickler Wealth Management should refund the fees that it collected.  Under no circumstances should the change in the investment managers result in any duplicative fees or debits to the initial MCS investment.  Given the scrutiny on these accounts, we can expect that Board Chair Billy Orgel and the MCS finance folks will be double-checking to make sure that the MCS investment proceeds in a fair and orderly manner.

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