Retirement firm accuses official of favoritism (January 11, 1996)


A retirement planning company, whose agent is a former Flint councilman, is accusing Flint Finance Director Marc Puckett of spreading false information about the company and preventing it from offering services to Flint employees.

Consolidated Financial Corp. has filed a $2-million lawsuit against the city and Puckett in Genesee County Circuit Court.

The suit states CFC should be allowed to offer its services because the City Council approved the firm in February as a retirement plan provider.

The suit alleges Puckett deliberately refused to follow the council’s resolution and has shown favoritism to the city’s current retirement plan providers: International City Management Association and Equitable Life Assurance Society.

The suit also alleges CFC had to pay for expenses that the city paid for the other two providers.

Puckett said the issue has nothing to do with favoritism.

The position I have taken is consistent with my duty of due care to the plan participants, he said.

Behind the scenes, people on both sides of the issue cite political motivation as the reason for the dispute.

Some question whether Puckett is refusing to process paperwork for CFC because one of Mayor Woodrow Stanley’s supporters works for one of the current firms.

Others say CFC’s plan doesn’t meet the city’s requirements, but that Councilman John Northrup has pushed to hire the company anyway because its agent is Michael McManaman, a former councilman and his friend.

But Northrup said he has pursued the issue because Puckett has been turning away companies that may offer better services for employees.

According to the lawsuit, Puckett told McManaman in October 1993 that CFC could not provide services because Flint’s payroll system was a two-slot system, and the city already had two providers.

It later was determined, however, that Flint’s payroll system permits up to 10 different plan providers, the suit states.

After an outside attorney reviewed the issue and found no problems, the council approved CFC as a provider in February 1995, and the mayor signed the plan in May.

The suit states employees expressed interest in signing up with the company, but Puckett refused to approve the necessary paperwork.

Company officials claim Puckett spread false information about the company when he told employees they could not sign up because CFC was not an authorized plan provider.

Although the council approved CFC as a vendor, City Attorney Michael Joliat said the company cannot be hired until Puckett, who is the plan administrator, determines whether it meets the necessary requirements.

He said Puckett is concerned there may be a potential conflict of interest. They offer investment advice to city employees and they stand in a position where they can receive fees or commissions, Joliat said.

Copyright Flint Journal / MLive Media Group ( Used with permission.

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