In its recent board meeting, the trustees were informed that MPLT received between $5,500 and $6,000 in January from Enron.
Bruce M. McMillan, board consultant, told the trustees that MPLT was included in the class action by Great Lakes Advisor — an independent management firm that currently manages $2.24 billion in equity, fixed income, and balanced fund for a diverse group of clients.
“As I recall, some years ago, between the general fund and park fund, we lost around $300,000 as the stock went to zero overnight,” McMillan said.
Asked by the trustees why MPLT has been receiving money from Enron, McMillan said, “We invested in Enron and we are part of a class action.”
The lawsuit obtained a $7.3 billion settlement from Enron — the largest in securities class action history.
McMillan told the trustees, “When that blew up on us, Great Lakes was quite upset about it because they were a victim of the fraud as much as we were. They said they would take care of the filing.”
He explained that all money managers run a similar portfolio. “All their clients probably own Enron [shares]. They don’t run individual portfolios for all their clients unless their clients have a social limitation like if it were Catholic or a non-profit organization that does not want to invest in tobacco or alcohol. You can limit those kinds of exposures.”
McMillan said generally, portfolios are very similar for all their clients that have assets under their management.
Owing to the successful claims from Enron, the board saw the need to have another safeguard for its portfolio. MPLT Chairman Alvaro Santos said there is a need to have another protection for MPLT investments.
During the MPLT board meeting in Feb. 2011, trustee Pete Deleon Guerrero moved for a vote on a proposed monitoring system. He said, “I move that we select the best.”
The board unanimously approved the proposal of Robbins, Geller, Rudman & Dowd LLP to do the portfolio monitoring for MPLT.
It was during Philip Mendiola-Long’s leadership of MPLT that an RFP was issued for portfolio monitoring services.
RFP No. 11-01 was issued for portfolio and securities monitoring services with significant experience in evaluating, monitoring, and carrying out securities fraud litigation for public or private trust and/or pension plans.
The RFP further stated that the monitoring services would be offered at no cost to the MPLT.
MPLT is tasked to hold and invest proceeds from public land leases, including proceeds from the lease of 7,203 hectares of Tinian public lands and 72 hectares of Tanapag Harbor and the island of Farallon de Mendenilla.
With Morgan Stanley Smith Barney as its consultant, MPLT works with money managers Richmond, Mackay Shields, PIMPCO, SEIX, Lazard, Atalanta Sosnoff and Newgate.
According to a recent report, MPLT had $75 million in combined general fund and park fund assets as of 2010 with $1.67 million liabilities for general fund and $46,413 for the park fund.
