-- While former New York State comptroller Hevesi sought investments from other public funds for a private equity fund run by his friend and political supporter Elliott Broidy, the New York Common fund made a $250 million commitment to Broidy's fund. -- Through his wife, Broidy made thousands of dollars in political contributions to officials with oversight for public funds, including Hevesi and current New York City comptroller. -- In a civil suit filed in New Mexico, the former CIO of the state's $8.5 billion Educational Retirement Board accuses allies of Governor Bill Richardson of making investment decisions for political reasons designed to benefit the governor. -- Under growing public scrutiny, four of Los Angeles mayor Antonio Villaraigosa's appointees to the board of the $12.5 billion Los Angeles Fire and Police Pensions fund, including Broidy and former California Public Employees' Retirement System president Sean Harrigan, have resigned. -- The efforts of former Ohio Attorney General Marc Dann helped land the long time CFO of the $19 billion Ohio Bureau of Workers' Compensation in jail for taking gifts and bribes from placement agents and money managers, including use of a luxury Florida condominium and payments toward his son's college tuition. But Dunn's own ethical transgressions forced him out of office before he could achieve greater reform. -- Connecticut State Treasurer Denise Nappier is among those who worry that the fallout from Cuomo's investigation will disproportionately hurt small, often women- and minority-owned firms. -- Carlyle Group paid $20 million to settle charges with Cuomo, who alleged that the private equity firm had acted inappropriately in winning business from New York Common fund, less than the $30.5 million in fees that Carlyle had collected from New York Common between fiscal year 2004 to 2008.Cuomo and the Securities and Exchange Commission have proposed reforms to address the problems. The New York attorney general is encouraging managers to voluntarily sign his "Public Pension Fund Code of Conduct," which commits them to not using placement agents when seeking business from public funds and bars them from making campaign donations to officials who have influence over public fund investment decisions. The SEC commissioners could vote their similar set of measures into law as early as this month, following a 60-day public comment period that expires today, October 6. But as "Shadow Lands" shows, the current efforts at reform fall short and run the danger of making the situation worse. Institutional Investor believes that a ban on placement agents won't fix the problem. In fact, it will very likely make the business of running public pension money even more difficult while further benefiting some of the very same managers that thrived under the corrupt system that spawned pay-to-play. Read the full story online now at www.iimagazine.com
Contact Information: Contact: Michael Peltz Executive Editor, Institutional Investor mpeltz@institutionalinvestor.com +1 212-224-3152