Two former Baltimore County Councilmen say they cannot recall and do not believe they were ever briefed on a $21 million pension investment loss.
Councilman Joseph Bartenfelder, a Fullerton Democrat, and Bryan McIntire, a Timonium Republican, both served on the County Council in 2008 at the same time county officials requested changes to pension regulations. Some of those changes instituted prohibitions on the county’s ability from investing pension funds in derivatives and mortgage-backed funds.
Bartenfelder said the discussion of the requested changes five years ago was very general.
“There was nothing specific and no mention of a $21 million loss,” said Bartenfelder. “They were just saying there had to be changes because of a loss but how much was lost was never mentioned.”
McIntire had a similar memory.
“I certainly don’t recall and I just don’t think I’d forget a $21 million loss,” said McIntire. “That’s not pocket change.”
“The council was informed,” said Kamenetz, who chaired the council in 2008. “We were aware of the nature of the loss and enacted changes to our bonding portfolio concept so this would not occur again. Now we’re investigating the opportunity to pursue a cause of action and if we can recover something it would be great.”
There are no minutes from the January 2008 council work session that show the loss was discussed publicly.
County officials met April 13 in secret with members of the council to discuss a possible lawsuit against Merrill Lynch related to the bad investment in a fund known as Mainsail II LLC, which was backed by subprime mortgages.
The county plans to ask the council in two weeks to approve a contract to hire an outside attorney to pursue a lawsuit against Merrill Lynch.
The investment firm is being sued in federal court by King County, WA over investments in the same fund. That suit was filed in 2010.