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Troubled Fund's Withdrawals Leveling Off, Analysts Say

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By DAVID ROYSE The Associated Press

Published: December 12, 2007

TALLAHASSEE - Withdrawals from Florida's local government investment pool appear to be settling down, a financial firm said Tuesday, as the board that oversees the fund continued to push for answers about how the pool was hit by a multibillion-dollar run last month.

The State Board of Administration's trustees on Tuesday continued to seek answers to how the fund invested in mortgage-backed securities that ratings companies downgraded. That led local governments to withdraw more than $13 billion in a run that was stopped by closing off access to the account for a week.

The board also unanimously named a new interim executive director for the board of administration, which administers a range of state investments in addition to the local government pool, including the $138 billion pension fund.

Hoping to boost investor confidence, the board chose a widely respected figure in state politics, former state Comptroller Bob Milligan, who is now serving as the state's insurance consumer advocate.

Milligan, who was a trustee of the board when the comptroller was formerly a member of the state Cabinet, said he would hold a meeting in early January with investors in the fund to help deal with their concerns.

"We will come to grips with what we need to do to get this operation on the right track," Milligan said.

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