Cozy Relationships Clearly Cloud Judgment of Pension Fund Investments Considering Fund Down Nearly $16 Billion Since 2007
PARSIPPANY, NJ - Just days after learning that Jon Corzine is invested and a partner in TPG Axon, a firm founded and owned by two New Jersey casino license holders, it turns out he's been playing with more than just his own personal wealth, but New Jersey taxpayer dollars as well. The State Division of Investment (DOI), overseen by Corzine's State Treasurer, has committed and invested $565 million in taxpayer dollars in TPG funds over the past 3 years
When Jon Corzine became governor, he took many of his former Goldman Sachs employees and fellow failed Wall Street executives to manage, sit on the Boards of and hold senior positions to handle state pension investments. Now these same friends are directing taxpayer dollars into funds overseen by Corzine's casino license holding partners. Case in point, Dinakar Singh, who ran Goldman Sachs Group Inc.'s $10 billion in-house trading desk established a hedge fund with private-equity firm Texas Pacific Group as his partner, known as TPG Axon Capital.
Jon Corzine made it easier for his friends from Wall Street to manage New Jersey's pension fund in 2006. His plan shifted a quarter of the state's $72 billion dollar public state pension fund from the control of state employees to private money managers. Not surprisingly, the state treasurer at the time, Bradley Abelow, who was a former partner at Goldman Sachs, supported the new investment strategy.
Now, the same Wall Street executives who brought our economy to its knees are making investment decisions using New Jersey taxpayer dollars. In this instance, Jon Corzine's friends decided to invest New Jersey family's hard earned money in the same fund in which Jon Corzine is personally invested.
New Jersey's Division of Investment committed and invested $565 million to various funds in the TPG family:
$130 million to TPG-TAC 2007, L.P.
$360 million to TPG Partners VI, L.P.
$75 million to TPG Financial Partners, L.P.
Considering at its height, during Jon Corzine's tenure, the pension fund hit $82.1 billion (Dunstan McNichol, "Turbulent Wall St. erodes state pension funds," The Star-Ledger, 2/22/08) and now it is nearly $16 billion less at $66.7 billion, raises serious questions about whether Corzine's cozy relationship with former Wall Street executives is clouding the judgment of the Pension Investment Council's decisions. (New Jersey Department of Treasury Website, Updated 08/31/09)
"It's one thing for Jon Corzine to gamble with his own personal wealth, but it's another to put at risk New Jersey taxpayer dollars by turning them over to his casino license holding partners at TPG," said Chris Christie. "Corzine's conflicts concerning TPG continue to become deeper and more obvious. He should divest his interest immediately and start telling the truth about the nature and extent of his holdings."
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