New charges against a well-connected private equity fund and a top New York political consulting firm raise a curtain on perhaps the most lucrative — and seedy — aspect of the business of American politics, the management of billions of dollars in state pension funds.
The scandal that erupted in the office of former New York State Comptroller Alan Hevesi is a study in contrasts: High flying private equity titans, allegedly caught with their hands in the pockets of teachers, clerks, and sanitation workers. Top politicians whose salaries are stuck in the low six-figures, suddenly in control of pots of money running into the twelve-figures. And top Democratic donors who cast themselves as high-minded, disinterested dabblers in the public good are revealed to have quite a bit of interest after all.
"We've gone from public contracts for buildings to underwriting to now controlling pension funds," said Mitchell Moss, a professor of urban planning at New York University, describing the recent evolution of political corruption. "The state pension funds have become the new honey pot."
The announcements made Thursday by New York State Attorney General Andrew Cuomo and the Securities and Exchange Commission constituted some of the largest settlements in decades of prosecutions in pension scandals, with the Quadrangle Group - a firm founded by the Democratic mega-donor and former Obama "auto czar" Steven Rattner - paying out $12 million in fines. - Politico Story
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