Henry Reveals Hiring of Compliance Officer

By Wolfe, Lou Anne | THE JOURNAL RECORD, August 31, 1993 | Go to article overview
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Henry Reveals Hiring of Compliance Officer


Wolfe, Lou Anne, THE JOURNAL RECORD


By Lou Anne Wolfe

Journal Record Staff Reporter

An internal auditor-compliance officer has been hired by State Treasurer Claudette Henry, effective Sept. 1, she said Monday at a meeting of the Cash Management and Investment Oversight Committee.

In other action, committee members deferred action on endorsing Henry's proposal for an independent audit of the treasurer's office. Those who spoke on the issue said they were uncomfortable endorsing the initiative.

The state treasurer's office is the subject of an investigation by the state auditor and inspector's office and the attorney general's office. Former deputy treasurer Patricia Whitehead, who also was a close personal friend of Henry's, resigned in July. Auditors accused Whitehead of arranging for a company where she formerly worked, Planners Independent Management Co. of San Diego, Calif., to make money from state investment trades.

The auditor's office said some $6 million in brokers' fees was funneled to Planners through Mabon Corp. and Adler Coleman Co.

The new employee is a certified public accountant and recent law school graduate, Henry said. Purpose of hiring a compliance officer is to make the office more professional and bring it up to standards of the banking industry, she said.

The officer will monitor trading activities of the chief trader "in a strict management-control situation," Henry said. The officer will report directly to Henry, she said.

The treasurer said she approached some state legislators about extra funding for a compliance officer, but got no encouragement. "So, we're going to make do with the staffing given to us," she said. "These measures will go a long way toward protecting us."

Henry reported the move when questioned by State Finance Director Jack White about the problems in her office.

"There's been a great deal in the press about the internal auditing procedures. I'd like to know what those are, and what's been done to strengthen those procedures in the area where (the state auditor) recognized exposure," White said.

Ability of the Oklahoma treasurer to expand security trading beyond conservative investment instruments, such as government securities, has only been going on since 1986, Henry said. There have been two treasurers and three chief traders to occupy the office since then.

During former treasurer Ellis Edwards' administration, there were two traders, and "each had a little quirk in what they were doing," Henry said. "So when we came in, we put controls in place." Subsequent to that, the questionable trades involving Whitehead came to light, and the latest control tactic is to hire a compliance officer, she said.

Henry said she would pursue state legislation to authorize an independent auditor to review the treasurer's office.

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