UPDATE:Quadrangle To Pay $7 Million In NY Pension 'Pay-To-Play' Scandal-Cuomo
2010年4月16日 - 1:26AM
Dow Jones News
New York Attorney General Andrew Cuomo announced a settlement
with Quadrangle Group LLC in the ongoing pension "pay to play"
investigation, with Quadrangle agreeing to pay $7 million to the
state and fully cooperate with the government's investigations.
Earlier Thursday, the U.S. Securities and Exchange Commission
sued the private-equity company for its involvement in the scandal
at the New York State Common Retirement Fund, New York's largest
pension fund.
The statement from Cuomo's office said Quadrangle, as well as
GKM Newport Generation Capital Services LLC, paid Henry "Hank"
Morris, then-Comptroller Alan Hevesi's paid political adviser, to
arrange investments from the pension fund.
Quadrangle retained Morris as a placement agent to increase from
$25 million to $100 million an investment Quadrangle was seeking
from the fund, the release said.
"We wholly disavow the conduct engaged in by Steve Rattner, who
hired the New York State Comptroller's political consultant, Hank
Morris, to arrange an investment from the New York State Common
Retirement Fund," Quadrangle said in the release. "That conduct was
inappropriate, wrong, and unethical."
Rattner, who co-founded Quadrangle group but is no longer
affiliated, has been implicated by Quadrangle's involvement. A high
profile Wall Street figure tapped by President Barack Obama as the
so-called automotive czar, Rattner was accused of meeting with a
consultant about paying a finder's fee for pension cash.
An attorney for Rattner wasn't immediately available for
comment.
Cuomo's office said Quadrangle agreed to fully cooperate in its
investigation of Rattner.
Under the agreement with Cuomo's office, Quadrangle will pay $7
million, $5 million of which will be returned to the pension fund
and $2 million of which will go to the state treasury. Those
payments do not include any potential fines related to the Rattner
probe, Cuomo said.
The SEC lawsuit, filed in U.S. District Court in Manhattan,
alleges that a Quadrangle fund secured a $100 million investment
with the fund only after a former executive arranged to distribute
the DVD of a low-budget film produced by a state official and his
brothers and paid more than $1 million in sham "finder" fees to a
one-time top political adviser to former Comptroller Hevesi.
Quadrangle said in its own release that it supports the efforts
of the New York Attorney General and the SEC to ensure that the
manager selection process is based solely on merit. In 2009,
Quadrangle implemented revised compliance policies that were
consistent with the Code of Conduct and best practice in the
industry.
Cuomo's office reached agreements on another $5 million in
payments from a series of others Thursday as well. In total, the
long-term investigation has now led to six guilty pleas with the
government recovering $130 million, Cuomo said on a conference call
with reporters.
"If you follow the money in the state of New York, it will lead
you to the state pension fund," Cuomo said. "Just because it's gone
on a long time doesn't make it okay...It's the same corruption for
decades."
Cuomo is actively pushing New York to pass reform of the pension
industry, which he argued Thursday would prevent similar cases in
the future. He has also pushed other attorney generals to expand
their own investigations into pension funds.
"I feel this is going to be a serious problem for the nation,"
Cuomo said Thursday.
-By David Benoit, Dow Jones Newswires; 212-416-2458;
david.benoit@dowjones.com
(Chad Bray contributed to this story)
Quad Graphics (NYSE:QUAD)
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