Allen Gillespie – chairman of the S.C. Retirement System Investment Commission (SCRSIC) – has publicly acknowledged that he is the one who first recommended a controversial $80,000 payoff to “former” retirement czar Robert L. Borden.
News of the payoff – approved last week by commission members appointed by S.C. Gov. Nikki Haley, Comptroller General Richard Eckstrom and Senate Finance Chairman Hugh Leatherman – broke first on FITS.
Under the terms of the deal, the flamboyant Lamborghini-driving ex-bureaucrat will make $1,333 a day over the next 60 days as he transfers his “institutional knowledge” of the state’s pension fund to the staff of the commission. Borden – who announced his “retirement” on December 2 – leaves with the system facing unfunded liabilities totaling anywhere between $14-17 billion.
Shortly before announcing his decision to retire and start an investment firm in North Carolina, Borden was set to receive a one-day bonus of $66,000 on top of his annual salary of $485,000. That payment was successfully blocked by S.C. Treasurer Curtis Loftis, however.
Loftis also opposed Borden’s $80,000 payoff, but commissioners appointed by so-called “fiscal conservatives” outnumbered him.
In response to criticism of the payoff, Gillespie penned a letter to all five members of the S.C. Budget and Control Board (SCBCB) attempting to justify his decision.
“In his letter of resignation, and in conformity with his employment agreement, Mr. Borden offered his services to the Commission for up to 60 days,” Gillespie wrote in the letter. “Given the many responsibilities that Mr. Borden discharged, and in light of the complexity of the South Carolina Retirement Systems trust funds’ portfolio, it is extremely important that the Commission have adequate time to obtain assistance from Mr. Borden, so that well-informed decisions may continue to be made and prudent transition plans implemented.”
“For all of these reasons, on December 2, I also appointed Mr. Borden to the position of Senior Adviser in order to allow the Commission … and the RSIC’s investment and legal staff the opportunity to insure for the orderly transfer of Mr. Borden’s institutional knowledge of the investment program.”
Borden’s agency received $5.8 million in the state budget a year ago – which South Carolina’s “Republican-controlled” lawmakers (and Gov. Nikki Haley) raised to more than $10 million this year. Borden was planning to ask for more than $19 million in the coming budget – although it remains to be seen whether lawmakers will approve that increase.
That money – slated to come from the mysterious “other funds” section of the state budget – was earmarked exclusively toward hiring and bonuses (and making sure that Borden continued to roll like a rock star).
Last fall, FITS broke the story of a controversial pension fund takeover engineered by Borden. After the mainstream media picked up on the scam, the rats started scurrying from the ship. Eventually, the S.C. Budget and Control Board (B&CB) – led at the time by former Gov. Mark Sanford – put the kibosh on the idea.