State losses top $6 million mark
Friday, January 18th 2002, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ State agency losses linked to the collapse of Enron Corp. stock have reached almost $7 million and financial officers are still counting, officials said Friday.
The losses, primarily in state pension systems, have prompted the office of Attorney General Drew Edmondson to join a federal class action lawsuit in Houston that seeks to recover money from Enron, Arthur Andersen and other companies.
The biggest hit in Oklahoma _ $2.75 million _ was reported Friday by the state Schools Land Trust, which benefits public schools.
CompSource, formerly known as the state Insurance Fund, said it lost a maximum of about $450,000.
Earlier, the Oklahoma Public Employees Retirement System reported losses of about $2 million and Oklahoma Teachers Retirement System had losses of about $1.6 million.
Ernest Hellwege, secretary to Commissioners of the Land Office, said the $2.75 million in Enron losses came over two years. Of that, he said $2.3 million was lost when a money manager bought Enron stock on Oct. 29 at about $10 a share. In late December, the stock later fell to pennies a share.
Hellwege's agency manages state trust land and distributes proceeds from investments to every school district in the state. Last year, the agency sent about $59 million to schools.
John McCormick, assistant attorney general, said Oklahoma's losses are a pittance, compared with losses experienced by public pension funds in other states.
The reason, McCormick said, is that Oklahoma bars money managers from investing more than 5 percent of pension funds in any one stock. Any deviation must be approved by fund trustees.
``Enron is a perfect example of why these funds need to be insulated from abuse,'' McCormick said.
He said Oklahoma has joined as a plaintiff with Georgia and a few other states in the Houston case.
The $2 million in losses for the public employees retirement fund did not count investment in stock index funds, such as the Standards and Poors 500, Steve Edmonds, administrator, said Friday.
Harry Rosengrant, who represents state Finance Director Tom Daxon on pension boards, said the Enron case ``touched literally every pension fund or state agency that had an investment portfolio.''
Tommy Beavers, teachers' retirement official, said the $1.6 million his agency lost was a tiny fraction of the retirement system's overall portfolio, but ``it's a lot of money to us.''
In addition to the action by the Oklahoma attorney general, Hellwege said his agency has its attorneys looking into any possible action against Enron.
Phyllis Carter, investment officer with CompSource, said her agency lost about $348,000 when stock of a subsidiary of Enron's was downgraded. She also estimated losses of about $100,000 from investment in stock market index funds.