New York Pension Fund Corruption Investigation
In 2005, Quadrangle made payments to private placement agent Hank Morris to help Quadrangle raise money for its second buyout fund. Morris had come highly recommended to Rattner from U.S. Senator Charles Schumer. Hank Morris was also the chief political advisor to Alan Hevesi, the trustee of the New York State Common Retirement Fund (CRF). Morris told Rattner he could increase the size of the CRF investment in Quadrangle's second buyout fund. Rattner then agreed that Quadrangle would pay Morris 1.1% of any investments greater than $25 million from the CRF.
In 2009, Quadrangle and a dozen other investment firms, including the much larger Carlyle Group, were investigated by the U.S. Securities and Exchange Commission for the payments to Morris. The SEC viewed the payments as "kickbacks" in order to manage money for the New York State Common Retirement Fund since Morris was also a consultant to New York State Comptroller Alan Hevesi, who controlled the Retirement Fund. Quadrangle paid $7 million in April 2010 to settle the SEC investigation. In November, Rattner personally settled for $6.2 million without admitting or denying any wrongdoing.
Read more about this topic: Steven Rattner
Famous quotes containing the words york, pension, fund and/or corruption:
“When the typewriter stops in a New York office everybody’s embarrassed; men start to quarrel or to make love to the stenographer or drop lighted cigarettes in the wastebasket.”
—John Dos Passos (1896–1970)
““Wotever is, is right, as the young nobleman sveetly remarked wen they put him down in the pension list ‘cos his mother’s uncle’s vife’s grandfather vunce lit the king’s pipe vith a portable tinder-box.””
—Charles Dickens (1812–1870)
“I am advised that there is an unexpended balance of about $45,000 of the fund appropriated for the relief of the sufferers by flood upon the Mississippi River and its tributaries, and I recommend that authority be given to use this fund to meet the most urgent necessities of the poorer people in Oklahoma.”
—Benjamin Harrison (1833–1901)
“Luxury, or a refinement on the pleasures and conveniences of life, had long been supposed the source of every corruption in government, and the immediate cause of faction, sedition, civil wars, and the total loss of liberty. It was, therefore, universally regarded as a vice, and was an object of declamation to all satyrists, and severe moralists.”
—David Hume (1711–1776)