Pennsylvania Attorney General Kathleen Kane on Wednesday asked SERS for documents related to the Clark case, and SERS is cooperating, according to a SERS source. Kane's office declined comment.
The board also agreed to "an independent and exhaustive review of SERS' due-diligence process within the investment program."
But members voted, 7-4, against a proposal by state Treasurer Rob McCord that would have prevented the pension system from replacing Clark or hiring private investment money managers before a detailed review. Instead, the trustees put Sen. Charles McIlhenney Jr. (R., Bucks) in charge of a committee to replace Clark.
The trustees then voted to spend $25 million to invest in Lubert-Adler Real Estate Fund VII L.P., a partnership headed by Philadelphia-based real estate specialist Dean Adler and Ira Lubert, major owner of the Valley Forge Casino Resort and a leader on the Pennsylvania State University board of directors.
Other investments included:
$50 million for Capvis Equity IV L.P. to invest in "the German-speaking region of Europe."
$10 million for Draper Triangle Ventures III L.P. for "emerging technology" firms in the Pittsburgh area and the Midwest.
$100 million for the Carlyle Group, which owns the former Sunoco refinery in Philadelphia and more than a dozen other Pennsylvania employers, to invest "in the U.S., Europe, and Asia."
Backing the investment freeze pushed by McCord, a Democrat who wants to run against Gov. Corbett in next year's gubernatorial election, were Sen. Vincent Hughes (D., Phila.), Rep. Dan Frankel (D., Allegheny), and David Fillman, boss of AFSCME District Council 13.
McCord wrote a letter to SERS chairman Nicholas Maiale, complaining that the board should have been notified immediately of the allegations against Clark. Instead, McCord said, a nearly monthlong delay left SERS investing "billions" in firms recommended by "the very person who is the subject of these allegations." McCord called the lag "inexplicable and unacceptable," and said it "creates the appearance of damage control rather than a thorough effort to uncover possible misconduct."
Maiale, a former Democratic state representative from Philadelphia, rejected McCord's arguments and, with the board majority, voted to replace Clark and to keep hiring new managers. "The need to pay benefits hasn't stopped," Maiale said in a statement, "so it is important that we keep the portfolio working for the benefit of our members."
Maiale noted that SERS investments have topped the 7.5 percent annual target so far this year, though SERS has a long way to go before it can reverse the rising annual taxpayer "contributions" that have caused Corbett to call SERS a "tapeworm."
Separately, the larger Public School Employees' Retirement System said Wednesday that it would impose a $21.40 surcharge on every $100 of public school wages it would pay next fiscal year, up from $16.93 this year, to help fund future pensions its investments have not covered. The surcharge will be financed partly by state taxpayers and partly by local school property taxes.