FL: Lawmakers want to know what happened at investment pool

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Baffled lawmakers demanded answers Monday about how the state agency that invests local government money could have put the funds into mortgage-related securities that later caused a panic, but didn't receive any.

Lawmakers from both parties on the Joint Legislative Auditing Committee repeatedly asked officials from the State Board of Administration, Chief Financial Officer Alex Sink's office and an audit committee looking for the same answers how decisions were made to invest local government money in a number of securities that were tied to mortgages.

Downgrades in ratings of those securities subsequently led several local governments to withdraw money from the pool. After those withdrawals were reported by the media, the run snowballed, with more governments removing money from their accounts.

The run on the Local Government Investment Pool in November dropped the pool's assets to $14 billion from more than $27 billion before the fund was temporarily frozen to stop the run. The head of the SBA, which invests several pools of government money in Florida, including the state pension fund in addition to local government's money, stepped down amid questions about the run.

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Florida combating its financial woes is the place to watch as well as this 'mixed' economy.