Friday, April 24, 2009

Pennacchio and Baroni Say Scandal Demonstrates Why Corzine Should Join Call for Pension Hearings Now

Senators Joseph Pennacchio and Bill Baroni say they have read disturbing allegations of intermediaries known as “placement agents” manipulating the pension investment process in New York, New Mexico and other states for personal and political gain. The reports have come to light amid the investigation of a pension-fund pay-to-play scandal that has led to the indictment of Hank Morris, a political adviser to former New York Comptroller Alan G. Hevesi. Today’s New York Times reported that former U.S. Senator Robert Torricelli was a lobbyist for the placement firm run by Morris, Searle & Co. of Connecticut. Equally disturbing, both the New York Times and the Wall Street Journal have reported that figures in the growing scandal sought investment business from New Jersey’s pension funds.

“We need to know beyond a shadow of a doubt that the same politically connected Wall Street financiers that preyed on New York and other state pension funds didn’t exploit New Jersey’s pension system as well,” Senator Pennacchio said.

“Our public employees, police officers, firefighters and teachers deserve to hear an honest and open public discussion of how billions of dollars of their money has been invested,” Senator Baroni said. “First and foremost, they need to be reassured that no politically connected, Wall Street sharpie has been allowed to skim unearned ‘fees’ from their retirement savings.”

According to information on the Treasury Department’s Web site, the state pension system has $46 million invested in Carlyle Realty V LP, $21 million in Carlyle Mezzanine Partners II, $45 million in Carlyle Mezzanine Partners LP, $32 million in Quadrangle Capital Partners II and $46 million in Intermedia Partners VII. These funds bear names of investment fund groups that have surfaced in reports of investigations involving so-called “placement agents” in New York, New Mexico and elsewhere.

“State employees deserve to know if these investments were made because they promised the very best returns, or because a politically connected sales person came to Trenton,” Baroni said.

“Every effort I have made to get information about state pension investments, including the ill-advised and suspect Lehman Brothers investment, has been met with resistance, and often with belligerence,” Senator Pennacchio said. “I no longer trust any assurances given by Corzine administration officials that our pension system is safe and well managed, and neither should any state and local employee. It’s time for a full airing of how our pension system has been managed on behalf of taxpayers and retirees.”

No comments: