MARK Lay, introduced as a Bermuda pension fund manager by consultant Tina Poitevien, and apparently a friend of Transport & Tourism Minister Dr. Ewart Brown , has been accused of profiting from political ties that led to a loss of $215 million for his Ohio client.

An article in yesterday's highlighted his political connections, reported that his fixed income fund, the same one used for $70 million of Bermuda's pension fund money for four years, placed 501st out of 549 funds in its category, and reported a connection to Dr. Brown.

Len Boselovic of the reported that Mr. Lay, an Aliquippa, Pennsylvania native who built his MDL Capital Management into the fourth-largest minority-owned asset management firm in the US, "appeared to be riding high in 2003".

"That was the year he joined Pittsburgh's prestigious Duquesne Club and in June, the politically-connected and civic-minded Mr. Lay was named Ernst & Young's Western Pennsylvanian Entrepreneur of the Year for financial services," wrote Mr. Boselovic.

"Four months later, Pennsylvania Governor Ed Rendell and the Deputy Premier of Bermuda were among the dignitaries on hand when Mr. Lay opened his firm's new headquarters on Smithfield Street," in Pittsburgh.

Governor Rendell was the recipient of $7,000 in campaign contributions from Ms Poitevien, who he later named to a prestigious state pension board of trustees.

In 2003, Mr. Lay's firm MDL Financial Management was managing $70 million of Bermuda's pension funds, in the US fixed income category. He was one of a number of well-connected minority managers who were introduced by Ms Poitevien to the Public Funds Investment Committee (PFIC) at the time of her reorganisation of the funds.

In addition to Mr. Lay, the coterie of friends included Aileen Rappaport of Loomis Sayles, Thaddeus Fletcher of Columbia Partners, and later Cooke & Bieler, Alfred Jackson of Davis Hamilton Jackson & Associates, and Dwight White of Mesirow Partners, all of whom are thought to be favourites of Ms Poitevien's and to have been invited to the Washington lunch in honour of Dr. Brown in Washington in 2002, when invitees were asked to contribute $2,500.

All were introduced to the PFIC by Ms Poitevien in 2001, but both Mr. Lay and Mr. Jackson were replaced recently as a result of poor performance.

It appears that Mr. Lay was successful for reasons other than excellent performance in the management of funds. Although things appeared to be going well in 2003, "not so evident at the time was the mounting pressure some clients were putting on Mr. Lay and MDL, whose list of public and private clients ranged from the National Basketball Association to Allegheny County, Pa," reported the

"Mr. Lay had built his reputation and his business by specialising in bonds, typically staid investments whose performance is tied closely to the vagaries of interest rate movements."

The shock over the loss of $215 million in a very much riskier hedge fund investment for the Ohio Bureau of Worker's Compensation (OBWC) was therefore all the greater.

"In the pension fund business, political ties frequently open doors to business, and Mr.Lay had his share," alleged Mr. Boselovic.

"In Ohio, eyebrows were raised by the fact that MDL Capital Chief Compliance Officer Mildred Forbes is the daughter of Cleveland NAACP President George Forbes, who is a member of the OBWC oversight board. Mr. Forbes said yesterday he will step down."

Mr. Lay, named one of the Top 50 African-Americans on Wall Street by magazine, still lives in Aliquippa, where he teaches Sunday school at Tried Stone Baptist Church. Last year, Pennsylvania House Leader Bill DeWeese named Mr. Lay to the state's new Commonwealth Financing Authority, which administers a $1 billion state economic stimulus programme, calling Mr. Lay "non-pareil in his knowledge of the financial management world".

But the Retirement Board of Allegheny County reported that MDL was the worst-performing of its four managers, and the MDL Broad Market Fixed Income Fund has under-performed bond market indices for 13 consecutive quarters; one investment service ranks it 501st over the last five years out of 549 funds in its category.

Mr. Lay returned a call, and said that "Ewart Brown was not present at the opening of our building. That's totally untrue."

Asked whether he was invited to the lunch in honour of Dr. Brown in 2002, he responded, "No. I don't remember anything like that," and hung up when he was being asked if he was a friend of Dr. Brown's.

A source reported that Mr. Lay has visited Bermuda, and is well known to Dr. Brown and former Tourism Minister and PLP backbencher Rene? Webb.

The reported this week that Dr. Brown was one of the many Bermudians wedded to the Blackberry, "the quintessential infomaniac gadget".

Dr. Brown would not accept that he was an "infomaniac", but "would accept the label 'contactmaniac'. I think it's important to respond to calls or mail."

Dr. Brown may respond to media requests about his use of gadgets, but did not respond by press time to e-mail questions asking him to confirm his attendance at the event in Pittsburgh, whether he was a friend of Mr. Lay's, and whether Mr. Lay had been invited to attend the lunch in Washington, DC.

On April 7, he was asked the following questions:

1. Approximately how much was raised in total from your 2002 fund-raising trip to Washington, Atlanta and Dallas?

2. Were the Atlanta and Dallas events also organised by Ms Poitevien?

3. What was the approximate total amount of your campaign expenses in Warwick South Central in 2003?

4. What was the rationale for these US fund managers contributing to a political campaign?

He has yet to respond to these questions, despite repeated requests, by Blackberry or otherwise.