Firm settles over its role in NY pension probe
NEW YORK — The private equity firm Riverstone Holdings has agreed to pay $30 million and abide by a new code of conduct to resolve its role in a corruption scandal at New York’s giant government pension fund.
Riverstone, which invests in energy and power companies, was among several investment firms that embraced improper “pay-to-play” tactics while trying to persuade state officials to let them manage hundreds of millions of dollars in retirement system assets, according to an investigation led by Attorney General Andrew Cuomo.
Among other things, Riverstone’s co-founder and senior managing director, David Leuschen, invested $100,000 in a low-budget movie called “Chooch,” produced by the brother of the pension fund’s chief investment officer.
The company also paid millions of dollars to a political consultant to former state Comptroller Alan Hevesi, who oversaw the pension system until his resignation in late 2006. Cuomo’s office and the Securities and Exchange Commission have said those payments amounted to illegal kickbacks.
Riverstone employees also donated $40,000 to Hevesi’s campaign fund.
The settlement means the company will avoid criminal charges, but Cuomo said it does not provide legal cover to Leuschen.
“Mr. Leuschen is not included in this resolution. It is still an open matter,” Cuomo said.
Riverstone, which has offices New York, London and Houston, declined to comment on Leuschen’s status in the investigation, but said in a statement that Cuomo’s reform efforts would lead to “greater transparency, accountability and ethics in the solicitation of private equity commitments from the public pension fund community.”
The new conduct code bars the future use of placement agents or other lobbyists to drum up business from government pension funds and restricts campaign contributions by firm employees.
Riverstone and its partner in the state deals, the Carlyle Group, received more than $530 million in investments from New York’s General Retirement Fund.
The Carlyle Group settled its role in the case for $20 million last month.
The case has led to criminal charges against former pension fund chief investment officer David Loglisci, political consultant Hank Morris, former New York powerbroker Raymond Harding, and several businessmen who had been involved in lobbying investments from the retirement system.
Related News
4 private equity firms to pay restitution, make reforms to resolve NY pension fund probeSeptember 17th, 2009 4 firms settle NY pension fund probeNEW YORK — Four more private equity firms involved in a corruption scandal at New York's public pension fund have agreed to pay restitution and implement reforms, state Attorney General Andrew Cuomo announced Thursday. The companies settling with the state include HM Capital Partners, Levine Leichtman Capital Partners, Access Capital Partners and Falconhead Capital LLC.
Republic Airways parent completes acquisition of Midwest Airlines for $31M in cash and debtJuly 31st, 2009 Republic Airways parent closes purchase of MidwestMILWAUKEE — Republic Airways Holdings says it has completed its acquisition of privately held Midwest Airlines for $31 million in cash and debt. Indianapolis-based Republic Airways Holdings is a regional carrier that currently flies under contract for other airlines.
SEC proposes new restraints on 'pay-to-play' practices by investment firmsJuly 22nd, 2009 SEC plans 'pay-to-play' curbs on investment firmsWASHINGTON — Federal regulators on Wednesday proposed new rules to restrain investment firms from making political donations to state or local government officials with an eye toward winning pension plan or other public business. The Securities and Exchange Commission voted 5-0 at a public meeting to propose curbing "pay-to-play" practices by barring investment firms from providing management services for two years if they make political contributions to elected officials who could influence awarding of contracts.
AP source: NY AG may press for settlement for ex-auto czar to avoid pension probe chargesJuly 15th, 2009 AP source: NY AG may press for Rattner settlementNEW YORK — A person familiar with a New York investigation into the state's public pension fund says officials may press for a settlement with ex-White House auto czar Steven Rattner over possible civil charges in a pay-to-play scandal. Attorney General Andrew Cuomo (KWOH'-moh) is investigating the payment of millions of dollars in kickbacks from investment firms trying to raise money from the fund.
Pacific Corporate Group settles kickback probe for $2M, avoids charges in NY pension scandalJuly 1st, 2009 Pension adviser settles NY kickback probe for $2MNEW YORK — The Pacific Corporate Group, a company that helps big government pension funds decide how to invest their money, has agreed to pay $2 million to extract itself from a corruption investigation in New York. The settlement, announced Wednesday, will spare the firm from criminal or civil charges in a sprawling pension investigation led by state Attorney General Andrew Cuomo.
California-based Pacific Corporate Group settles NY pension probe for $2 millionJuly 1st, 2009 Calif.-based pension adviser settles NY probeNEW YORK — A company that helps government pension funds decide how to invest their money has agreed to pay $2 million to extract itself from a New York corruption investigation. The settlement announced Wednesday will spare the Pacific Corporate Group from criminal or civil charges in a probe led by state Attorney General Andrew Cuomo (KWOH'-moh).
Carlyle Group to pay $20 million, implement reforms for its role in NY pension fund scandalMay 14th, 2009 Carlyle Group to pay $20M in NY pension probeNEW YORK — The Carlyle Group, one of the nation's largest private equity funds, has agreed to pay $20 million and make other reforms to resolve its role in an influence-peddling scandal at New York's public pension fund. The settlement will bring an end to the possibility that the company, its executives or employees would face charges in the case, New York Attorney General Andrew Cuomo said.
A biographical look at pro sports owner Tom HicksMay 10th, 2009 A biographical look at pro sports owner Tom HicksA biographical look at pro sports owner Tom Hicks:
BORN: February 1946 in Dallas. EXPERIENCE: Spent early part of his career working for venture capital banks in New York and Texas.
3 days after acquisition by private equity firm, San Diego Union-Tribune cuts 192 jobsMay 8th, 2009 San Diego Union-Tribune cuts 192 jobsSAN DIEGO — The San Diego Union-Tribune is cutting 192 jobs in another round of layoffs affecting all departments at the newspaper. The Union-Tribune said Thursday the layoffs amount to about 18 percent of its staff, which will be reduced to about 850 workers after the cuts become effective July 6.
Politically connected placement agents get subpoenas in NY pay-to-play pension probeMay 8th, 2009 Political agents get subpoenas in NY pension probeNEW YORK — Investigators probing influence peddling at the state pension fund have subpoenaed a number of politically connected New Yorkers who picked up big paychecks lobbying former officials at the retirement fund. State officials on Wednesday released a list of dozens of agents who acted as middlemen between investment firms and pension fund officials during the tenure of former comptroller Alan Hevesi.
NY comptroller sues Aldus Equity over Dallas firm's role in pay-to-play scandalMay 6th, 2009 NY comptroller sues firm in pay-to-play scandalNEW YORK — New York state's comptroller is suing a company accused of paying illegal kickbacks in exchange for a big investment from the state pension fund. Comptroller Thomas DiNapoli filed the suit Wednesday in Albany as part of his effort to sever all ties with the Dallas firm, Aldus Equity Partners.
NM firing financial adviser entangled in kickback scandal involving NY retirement fundApril 30th, 2009 NM firing financial adviser mentioned in NY probeSANTA FE, N.M. — A state investment office is firing a financial adviser caught up in a pay-to-play investigation involving a New York state pension fund.
FBI questions NM investment funds about adviser caught up in NY pension probeApril 24th, 2009 FBI questions NM investment funds about adviserSANTA FE, N.M. — Federal agents have questioned New Mexico investment fund officials about a financial adviser entangled in a pay-to-play investigation involving a New York state pension fund.
NYC comptroller reportedly looks into whether Quadrangle failed to disclose finder feesApril 22nd, 2009 NYC comptroller eyes Quadrangle feesNEW YORK — The New York City comptroller's office is reportedly looking into whether private-equity firm Quadrangle Group — once headed by Steven Rattner — misled or deceived city pension funds. Rattner now leads President Barack Obama's auto-industry bailout.
India Equity Partners eyeing buyout of small firmsFebruary 8th, 2009 KOLKATA - Private equity firm India Equity Partners is in talks with cash-strapped business houses to buy out some of their smaller group companies, a top company official said here Monday. Co-founder and managing director Gaurav Mathur said several business, which are finding it increasingly difficult to raise funds for core operations, are now willing to sell off majority stake in some group companies.
Loading ...