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Friday
Dec172010

Taking Stock of Cuomo's Pension Investigation

When Andrew Cuomo leaves office, he will be remembered for his far-reaching investigation of corruption around the New York State public pension fund. The probe revealed a deeply flawed system for awarding investments by the fund, with some investments going to those hedge funds and other funds that provided kickbacks to state officials or their cronies. 

Cuomo has been portrayed at times as an over-zealous prosecutor seeking to criminalize normal business dealings. But as we have argued here earlier, Cuomo has actually gone lightly on many of the figures involved in this case, given the crimes they allegedly committed. Financier Steve Rattner has complained publicly about his treatment by Cuomo, but the better question is why he hasn't faced criminal charges. 

Still, some people are likely to do prison time in this probe -- including Alan Hevesi -- and Cuomo's accomplishments are significant. Here are the key outcomes of the investigation:

  • Eight guilty pleas to date, including by former Comptroller Alan Hevesi; Hevesi’s former political advisor Henry “Hank” Morris; former Chief Investment Officer at the Office of the State Comptroller David Loglisci; former Liberal Party Chair Ray Harding; investment advisor Saul Meyer; hedge fund manager Barrett Wissman; unlicensed placement agent Julio Ramirez; and venture fund manager Elliott Broidy.
  • Major financial penalties from companies and individuals involved in the corruption totaling $161 million that will be turned over to the state pension fund and state. 
  • A Public Pension Fund Reform Code of Conduct, which bans investment firms from compensating intermediaries for introductions to public pension funds. Twenty-one firms have endorsed the Code so far. 

 

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