I could not help but notice recently the Florida Retirement System had lost over $266,000,000.00 on a real estate deal in Manhattan. The state of Florida invested $250,000,000.00 along with $16,000,000.00 in fees on a deal that paid more than $400,000,000.00 over the asking price for some run down, rent controlled apartments.
The idea was to evict the existing tenants and raise the rents to current market value so the investors could make money. Apparently, no one even dreamed that the tenants would hire a lawyer to stop that nonsense. When a court agreed this was not a good idea, the investment went belly up and the $266 million vanished into thin air. Wow. WTF!
Newspaper reports indicated that the watch dogs who failed to protect the money were:
• Charlie Crist (a Republican Governor who is trying to leave Florida ASAP to move to Washington, D.C. and pretend to be a Senator)
• Bill McCollum (a Republican Attorney General who wants to be governor or whatever position to which he can get elected)
• Alex Sink (a Democrat Florida CFO who wants to be governor and should have been paying better attention)
• Coleman Stipanovich (a Republican holdover from the Bush fiasco who approved the investment but apparently did not read the reports that cautioned BEWARE! DANGER! BAD IDEA!)
Tax payers and Florida employers can expect to pay for this little bump in the road just like they paid for the $355,000,000.00 losses on Enron stock bought after warnings on the financial instability of the stock were issued.
State of Florida employees and those covered by the FRS pension fund must expect to hear that recent losses and unfunded liabilities make it necessary to curb, reduce or destroy pension benefits because the employees must finance the mistakes of management. (See prior Caveat Lectores Rant)
And, Oh yes, have a nice day!