Saturday, March 21, 2009

New York State Comptroller's Office, More Felons?

Shining a bright light on the New York State Comptroller's Office is proving to be a worthwhile exercise.

First let's visit the past. A couple of Alan Hevesi's buddies soon could be joining the former Comptroller in the ever expanding ex-NYS public servant “felon's club.”

Henry Morris, who was the fund-raiser for former comptroller Alan Hevesi, and David Loglisci, who was the state pension fund's top investment officer, were charged with securities fraud, bribery, money laundering and other crimes in a 123-count indictment.

Morris and an unidentified partner received more than $13 million in "sham placement fees" from five investments totalling $730 million that involved The Carlyle Group, Cuomo said.

Of course, this is New York State, where voters overwhelmingly elected Alan Hevesi after the truth came out about his using taxpayer funded state cars and drivers to ferry around his wife. His opponent in the 2006 race was Chris Callaghan, the Saratoga County Treasurer, whose background included: Budget Officer for the Town of Waterford from 1980 to 1986, President of the New York State Association of County Treasurers and Finance Officers, and a member of the National Association of County Treasurers and Finance Officers. Callaghan was a competent and honest public servant who, importantly, didn't have a record of misusing taxpayer money. On the other hand, Hevesi had been treating his wife to freebie rides for years, even back when he was the Comptroller in New York City.

Again, with all of this in the public domain, Hevesi still won in a landslide. It is true that we get the government we deserve, especially in New York State.

Now, to the present. After the forced resignation of Hevesi, we have Thomas DiNapoli, a former assemblyman with little substantive financial background. He is now coming under fire.

Taking over the job of state comptroller in 2007, Thomas P. DiNapoli said he would bring an openness and accountability to the scandal-plagued office.

He set up new rules: all investments from the state pension fund would be made public every month, along with the names of those who brokered the deals.

But several weeks after assuming the job, Mr. DiNapoli met with the chief partner of the private equity firm InterMedia Partners, Leo J. Hindery Jr., and quietly raised the pension fund’s investment in Mr. Hindery’s firm by $15 million.

That investment was never disclosed, nor was the involvement of Roberto Ramirez, a prominent lobbyist and former colleague of Mr. DiNapoli’s who helped bring about the deal on Mr. Hindery’s behalf.

After a recent inquiry by The New York Times, Mr. DiNapoli’s office initially said no such investment had been made, then later acknowledged it had been and said the lack of disclosure was an oversight.

Even some of the steps Mr. DiNapoli has taken to bring a new ethical climate to the office raise questions. When he named a six-member task force in 2007 to examine his ethics and oversight of the fund, he included a representative from New York State United Teachers. The union had to pay $100,000 the previous year to settle state charges that it misled its members about high-cost retirement products it was encouraging them to buy and quietly took payments from the company selling the investments.

Read the whole story.

Of course, DiNapoli has is priorities in order, especially when it comes to raising funds for his 2010 campaign.

But he (DiNapoli) is amassing tens of thousands of dollars in contributions from investment firms, either directly or from their executives, often from little-known money managers, including Quadrant Management, Azimuth Capital and Nemazee Capital.

Mr. DiNapoli is also taking money from law firms that do business with or are seeking business with the fund. Seven partners at the law firm Labaton Sucharow contributed $42,500 to DiNapoli 2010 after the firm was hired by Mr. DiNapoli to represent the office in litigation against Countrywide, the troubled mortgage lender.

Contributions are also coming from placement agents who facilitate deals for investment firms, one of the central ethical morasses that enveloped the office under Mr. Hevesi. Last month, at least two people connected to Arvco Capital, a placement agency, donated $10,000 apiece. Arvco received $3.6 million from two investment firms for serving as a placement agent as recently as January 2008.

And, these are the people we want having more control over our lives?

1 comment:

  1. These guy's are getting what they deserve.That's retirement funds they're "screwing" with.
    On the other hand imagine all the empty offices if they start arresting everyone who ever had their family driven around.Andy, did you really think that guy driving your mom(Matilda) around was a volunteer?