New Jersey's Pension Investment Chief Resigns

Robert Grady has known Chris Christie since high school. The governor calls him a close friend and adviser. So when Christie asked him to oversee the investments of the state's $80 billion pension fund, Grady agreed to do it for free, flying from his home in Jackson Hole, Wyoming, to Trenton on his own dime.

Since then, Grady said the pension fund has performed beyond expectations: "It's been outstanding," he said. "We've achieved $36 billion in gains over the last four fiscal years."

But some labor leaders questioned his strategies.

Under Grady, the State Investment Council increased investments in hedge funds, a common — and costly — strategy. This year's returns were slightly below average. And Grady and Christie came under scrutiny for doing business with companies where executives made donations to Christie's campaign, the Republican Governor's Association, and the state Republican Party.

"It leaves one with the sense that decisions are made not to benefit the pension but maybe to enrich or benefit people who are politically connected." said Hetty Rosenstein, New Jersey Director for the Communications Workers of America.

The AFL-CIO, New Jersey's biggest union, filed a complaint with the state's ethics board, and called for an investigation.

Grady called the union's complaint "frivolous."

"I understand that as the governor raises his profile and has called for pension reform that people are going to attack him for that," Grady said.

Grady said he's proud of the work he's done on the investment council, and stayed longer than he planned. He said he's leaving to focus on his business and family,

Tom Byrne, who served as vice chairman of the Pension Investment Council, will now serve as chair.