Friday, May 15, 2009

He had a better idea

Charles Millard was Director of the Pension Benefit Guaranty Corporation (PBGC) from May 2007 to January 20, 2009. While PBGC has had some rough years recently, Millard was able to wreak more damage in the twenty months he was in charge than any other director. Millard's basic error was deciding that the policy of investing in conservative bonds was not producing sufficient revenue to cover the organization's growing liabilities. The answer? Invest in higher risk entities such as real estate, stocks and emerging foreign markets. The problem? He decided on this changed policy in February 2008. The result? By September the portfolio was down 23% and the deficit was at $11 billion. The comeback? Who knows as no information as to the portfolio's status has been released. It gets worse.

Millard realized that he would not be re-appointed by Obama, so he started looking for a job. Since he came from Lehman Brothers, he wanted to work on the Street. Unfortunately, he was barred from contacting Wall Street firms for the purpose of finding a job. Millard contacted the firms anyway; he even contacted the firms who were trying to sell their services to PBGC. Of course, Millard feels he did nothing wrong.

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