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Baltimore Business Journal: Maryland pension system board to ask Hogan for veto of controversial bil

The board of trustees for the Maryland State Retirement and Pension System will ask Gov. Larry Hogan to veto a bill passed by the General Assembly that changes how the board selects its chairman.

After a motion by Comptroller Peter Franchot, the board voted 7-4 to send a letter to Hogan requesting a veto of the Senate Bill 178. The bill is viewed by many as a political slight by lawmakers against Franchot because it requires that the Maryland treasurer serve as board chairman.

Traditionally, the board selects either the treasurer or the comptroller to serve as chairman — whoever has served in office longer. Currently, state Treasurer Nancy Kopp serves as chairman. Franchot would become chairman if Kopp retires.

Multiple board members said they were unhappy with the way General Assembly passed the bill because no one from the state retirement agency was ever informed or notified of the possible change. Franchot sent his own personal letter to the Republican governor, but said he wanted board the full board to go on record.

"I think the substance is terrible," said Franchot, a Democrat who has forged a tight bond with Hogan. "Some of you may disagree with me on that, but the process was even more of a travesty."

On the last day of the General Assembly's 90-day legislative session the House Appropriations committee chaired by Del. Maggie McIntosh, a Democrat from Baltimore, amended the bill, which was meant to codify the board's oath of office, to include the change to the chairmanship. The House passed the proposal unanimously in the session's final hours, and the Senate concurred with the amendments.

The move by the legislature came as Franchot and Democratic leaders in the General Assembly — particularly Senate President Thomas V. Mike Miller Jr. and House Speaker Michael E. Busch — have been engaged in a war of words. Franchot has even vowed to make sure Miller is not reelected in this year's election. David Brinkley, the state secretary of budget and management who also sits on the pension system board, said if the board is able to have responsibility for more than $50 billion of assets, it should be able to select its own chairman. He also said the board should not have been "blindsided."

"Next time, when there is a significant change or some change done, we should at least be consulted or at least be asked what do you think," Brinkley said.

Eric Brotman, president and managing principal of Brotman Financial Group Inc., also advocated for the board sending a letter. Brotman has said previously he would be sending a personal letter requesting a veto.

Some board members did not support requesting a veto because they were worried about the possible reaction from legislative leaders. They were concerned that if the board requests a veto, the General Assembly might not support the pension system's legislative requests in the future.

"If the governor is already intending, and I've already heard from several sources that the governor is planning to the veto this, I don't think it's necessary to send a letter," said Douglas Prouty, a former teacher who serves on the board. "I think it will be a poke in the eye to the leadership in the legislature and not really worth the effort."

Richard E. Norman, a retired state police officer, agreed with Prouty.

Former correctional officer Sheila Hill did not agree, and said she supported sending a letter to Hogan.

"You used the term poke in the eye, I think we got poke in the eye," Hill said. "I'm always an advocate of maintaining our decisions here on the board. I never have liked to give up that kind of decision making."

Sending a letter would not be viewed as a "poke in the eye," by lawmakers, Franchot said, because "there are lots of things going on down there in Annapolis."

Kopp abstained from voting. While the board should have been consulted by lawmakers, but said she does not think its the board's place to insert itself into "what is clearly a political struggle in Annapolis."

Hogan's office did not immediately respond to a request for comment.

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