Hunt grows for pension kickbacks
California and three dozen other states formed a task force Friday to investigate whether the abuses alleged at a New York state retirement fund are taking place at public pension agencies across the country.
The announcement marks the latest expansion of a pay-to-play probe that has increasingly revealed California connections.
New York Atty. Gen. Andrew Cuomo and the Securities and Exchange Commission have brought a series of charges alleging a massive kickback scheme in which investment firms made payoffs to be hired to manage New York state pension assets.
Cuomo has said that many of the same practices might be found in other states.
“Obviously, we have information relevant to California and we’ve been sharing information with California,” Cuomo said in a conference call with reporters. “The amount of information has increased so dramatically that it no longer works to do it on an informal basis.”
The SEC on Thursday sued Aldus Equity, one of two firms that recommend private equity funds to the Los Angeles Fire and Police Pension agency, accusing it of making improper payments to win business from the New York fund.
Last month, the SEC asked two members of the Los Angeles pension board for information about their personal financial dealings and about any communications they had with Aldus and other firms whose names have been linked to the scandal.
“If there is wrongdoing in California, we will look into it and take appropriate action,” said Scott Gerber, a spokesman for California Atty. Gen. Jerry Brown.
Cuomo announced Friday that he had sent more than 100 subpoenas to investment firms and the “middlemen” they’ve paid to help win contracts to invest pension assets in New York. The purpose of the subpoenas is to determine whether the so-called placement agents are properly licensed and registered.
Placement agents need to be registered in most cases, Cuomo said, adding that in New York as many as half of such intermediaries are not.
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Times staff writer Marc Lifsher in Sacramento contributed to this report.
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