Eyeball to eyeball
Board of Investment member Bill Bell eyes David Petersen during a meeting Oct. 18, the day before the attorney general announced Mr. Petersen agreed to plead guilty to a misdemeanor for his conduct in office.

Consideration of hiring a private investment firm to help with the state’s portfolio was broached last month by Treasurer David Petersen, but a presentation by a New York City firm to the state Board of Investment was quickly thwarted by a board vote.
The board, which oversees the state’s nearly $10 billion in investments, turned down the presentation because Mr. Petersen had not communicated that is was going to be on the agenda and had not previously discussed the idea with the board.
The treasurer made another stab at it at the board’s Oct. 18 meeting.
“The focus of that discussion would have been to educate you,” he said. “I continue to have some concerns and I hope this board will address them at a future meeting. We need to have better tools in this office to manage our portfolios . . . and it’s my intention to go to the Legislature [for additional funds]. “Maybe my communications skills need to be improved…”
Board member Bill Bell, who has been holding Mr. Petersen’s feet to the fire on the issue of communications, had this response: “You seem to be alluding to or suggesting that there are internal problems here with respect to the whole investment arena here… that might have a detrimental impact on the state’s money. But you’ve not brought anything to this board.”
Mr. Petersen said he didn’t necessarily mean problems but, rather, “approaches to investments,” adding he didn’t think the board wants to go as far as getting involved in investment strategies.
“I do,” Mr. Bell said.
Board member Stephen Barnes of Barnes Investment Advisory, called for board control of the issue.
“I am open to outside management, particularly the [trust land] endowment fund,” he said. “I would like the board to set the agenda, not an outside management firm.”
Representatives of ING Investment Management flew in from New York City to present information Sept. 20 about private management of state investments, but were not allowed to say a word. Mr. Petersen, sources told Arizona Capitol Times, has a tie with one of the would-be presenters.
The board was “blind sided,” Mr. Barnes said later.
After the meeting, two sources familiar with ING representative Jess Kravitz said he and Mr. Petersen have known one another for at least three years, including a trip they took to Sedona, when Mr. Kravitz was with a different investment firm. Mr. Barnes said later that if Mr. Petersen knows Mr. Kravitz, it should be disclosed to the board.
Leaving the meeting, Mr. Kravitz told Arizona Capitol Times, “I am disappointed. It makes no sense. Ninety-six percent of state treasurers have outside managers.”
Mr. Petersen did not reply to questions about why he selected ING to make the presentation and whether he knows Mr. Kravitz.