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Treasurer nominee's state links

Originally appeared in the Star Ledger on 03/28/01

The parent company of the investment firm that employs the nominee for state treasurer earns about $300,000 a year handling state investments, contrary to what state ethics officials were told last week.

Word of those payments contradicted earlier information that the nominee, Isabel Miranda, gave to the state's top ethics officer March 16, when she received approval for an unusual arrangement that would let her serve as state treasurer while she is on leave from U.S. Trust Co.

Rita Strmensky, executive director of the state Executive Commission on Ethical Standards, said she cleared the arrangement after she had been told by Miranda that neither Charles Schwab Co. nor U.S. Trust, a Schwab subsidiary where Miranda has worked since January 1997, did business with the state.

In fact, Schwab collected $713,828 in commissions for handling stock transactions for the state between July 1, 1998, and June 30, 2000.

When Strmensky learned of those transactions yesterday morning, she said she would reconsider her decision to approve the leave. By yesterday evening, Strmensky had issued a written statement appearing to approve the arrangement once again.

In it, she cited a letter from Miranda in which the nominee promised to recuse herself from any matter involving Schwab, U.S. Trust or Morgan Stanley, where her husband, Donald Browne, works.

"It is well established by government ethics agencies that a recusal cures a conflict," Strmensky wrote in a statement distributed late yesterday.

Miranda's nomination was put on hold by the Senate Judiciary Committee on Monday following a report in the New York Times that she was fired from Citibank in 1996 for misusing her expense account to pursue what, at the time, was an extramarital affair with Browne.

She has angrily denied that she was fired from her Citibank job, and acting Gov. Donald DiFrancesco is continuing to urge her nomination.

Last night, state Sen. William Gormley (R-Atlantic), the Judiciary Committee chairman, revealed that State Police are expanding their background investigation of Miranda and that he was awaiting the results.

DiFrancesco said yesterday he was unaware that Schwab did any business with the state, but that the conflicts could be dealt with.

"If there are conflicts, obviously, that arise over the course of someone's tenure, you remove yourself from that particular thing," he said. "U.S. Trust is not involved itself in the state of New Jersey. And that's where she's been working."

But Senate Minority Leader Richard Codey (D-Essex) said he thinks Miranda should just quit U.S. Trust to avoid even the appearance of a conflict of interest.

"The fact that she wants to take a leave is just wrong. She has to sever those relationships," he said.

Miranda has been serving as acting treasurer since DiFrancesco nominated her March 19. Mary Lou Murphy, a spokeswoman for the treasury department, said the nominee March 23 sent a letter to deputy treasurers Maureen Adams and Peter Lawrance saying she did not want to be apprised of any department activities or communications involving Schwab, U.S. Trust or Morgan Stanley.

Murphy said the treasurer has no influence over brokerage fees paid out by the Division of Investments. They are decided strictly by a commission that oversees the division, she said.

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