Neal opposes PERS proposal

Friday, Sept. 13, 2002 | 11:11 a.m.

CARSON CITY -- State Sen. Joe Neal of North Las Vegas, the Democratic nominee for governor, says a plan to divert up to $200 million from the state Public Employees Retirement System to spur business activity in Nevada is another example of corporate welfare.

If elected, Neal said, he would veto the proposal by state Sen. Randolph Townsend, R-Reno, who wants investors for the retirement system to invest in high-tech companies to entice them to move to Nevada.

Meanwhile, Secretary of State Dean Heller said Townsend could face tough ethical questions if he continues pushing the proposal because Townsend is a partner in an investment firm that unsuccessfully sought to manage some PERS funds.

"It reeks of conflict," Heller said this morning. "But all I'm doing is posing the question at this point.

"It's not an ethical breach until you vote on it."

Heller said he hopes to speak with Townsend this weekend. "I think he will see the light," he said.

Townsend could not be reached for comment this morning.

Heller, Assemblywoman Marcia deBraga, D-Fallon, and now Neal have criticized the proposal to dip into the $12 billion fund that has 100,000 members, including state and local government employees and school teachers.

Neal called on other candidates, including Gov. Kenny Guinn, to say whether they support Townsend's plan.

"The governor respects efforts to improve the economy," a Guinn spokesman said. "However, Townsend has clarified his position and the fund must be protected."

Townsend said Thursday saying he opposes using the pension fund "in a political manner."

Townsend noted the retirement system has employed a California management company and given it $200 million to invest. He said the firm, Pathway Capital Management LLC of Irvine, Calif., has invested the money in California and East Coast firms but not in Nevada.

Retirement system officials said Pathway manages a $12 million program that invests in startup and other companies in Nevada.

Townsend said he wants to encourage the retirement system board of directors to "consider investing in successful Nevada companies at a time when we as a state need to send a message of investor confidence to financial communities."