Massachusetts Treasurer Timothy
Cahill ousted James Hearty as head of the state pension fund
because Cahill wanted a new director who would push for corporate
governance reforms, back shareholder lawsuits and disclose the
returns of private equity investments.
Cahill, who said when he took office that he wanted to make
changes to the 21st largest U.S. public pension system, will
recommend the board hire Steven Weddle, 44. Weddle recently
oversaw a $100 million development fund in South Africa financed
by the U.S. government.
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“I wanted to find someone from outside to give us a
different perspective,” said Cahill, the chairman of the $27.9
billion system.
Cahill said the pension fund, under Hearty, would “get
pulled into and not lead the charge” on issues like filing
proxies and shareholder lawsuits, disclosing private equity
information and making so-called “economically targeted”
investments which aim to make adequate returns and benefit the
state economy.
Hearty, a former Lehman Brothers managing director, declined
to comment when reached at his office Monday.
Cahill informed Hearty of the move in a private meeting
after the pension board met Thursday in Boston. At least one of
the nine board members left the bimonthly meeting unaware that
Cahill, who became state treasurer in January, had lined up votes
in support of having Hearty removed as administrative head of the
pension.
“You could call it a palace coup,” said Ralph White, a
board member who is elected by state retirees, who are among the
235,000 municipal employees and teachers invested in the pension.
White, who said he supported the move, declined further comment.
Cahill, a Democrat who oversaw a $370 million pension fund
as a county treasurer before winning statewide office, said
Weddle benefits from his experience in making private and public
investments.
Bloomberg News
