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Newsflash: Albany Governance as Crooked as Ever
By
Dave Hogarty
Published Jul 15, 2007
Modified Mar 7, 2008
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By
Dave Hogarty
Published Jul 15, 2007
Modified Mar 7, 2008
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The New York Times makes note of Alan Hevisi's continued legal problems today. The State Comptroller is under fire by the State's Attorney General, Andrew Cuomo, for perhaps illegaly financially benefitting from control of New York's $154 billion pension fund. The state doesn't manage the money itself; it shops the second-largest pension fund in the country (California's is larger) out to private managers, for very lucrative fees. Unsurprisingly, a lot of money managers are big political contributors. Investigators for AG Andrew Cuomo want to know if Hevesi benefitted from deals for state business with various financial companies.
Hevesi's office handed over a portion of the state pension to Third Point Capital for management in 2005. A few months later, the hedge fund hired Hevesi's eldest son, who also owns his own brokerage company that operates out of Third Point Capital's offices. The Times article includes this straight-faced paragraph:
State laws prohibit officials from engaging in activities that create or appear to create a conflict with their public duties, and they are barred from securing unwarranted privileges for themselves or others.
We suspect Albany might disappear off the map if that was the actual case. Blackstone Capital was in the news recently when the private equity firm went public. Public is not exactly a foreign word to hedge funds: The New York Sun reported that 54% of the more-than $18 billion Blackstone raised in 2006 was from state pension funds. A few tens-of-thousands of dollars in campaign contributions tossed at various political officials go a long way towards taking one's company public and making $7.5 billion. Governor Spitzer himself raised quite a bit of money in campaign contributions from Wall Street when he was the state's Attorney General, after threatening financial executives with criminal prosecution for various forms of malfeasance.
The Times has a separate op/ed piece on the gilded travel service boondoggle that is the state-provided ferry service by plane, limo, car, train, boat, and helicopter that New York taxpayers provide to elected officials.
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