NEW YORK (Legal Newsline) – New York Attorney General Andrew Cuomo has introduced legislation that would replace the New York State Common Retirement Fund’s sole trustee with a board of trustees.
Cuomo says the legislation would end pay-to-play politics with pension funds. He has been investigating corruption on the part of those that control public pension funds.
“For decades, the tate pension fund has been weakened and corrupted by the sole trustee model,” Cuomo said.
“The model has allowed pay-to-play to flourish in a system meant to protect the retirement accounts of thousands of hard-working public employees. To put it simply – the model doesn’t work.
“Today’s legislation will ensure that the fate of our public retirement fund isn’t decided by one individual, and that the entire system is rid of the kind of pay-to-play that infected and derailed it in the first place.”
The Common Retirement Fund, the state’s largest pool of money, is valued at $116.5 billion.
The “Taxpayers’ Reform for Upholding Security and Transparency” legislation, or TRUST, was announced by Cuomo, New York Senate Majority Conference Leader John L. Sampson, Sen. Brian X. Foley and Sen. John Flanagan.
The TRUST legislation is designed to institutionalize the Public Pension Fund Reform Code of Conduct, announced earlier this year by Cuomo, and to provide additional civil, criminal and administrative penalties and sanctions so as to ensure firms and individuals are held accountable of the new law.
TRUST, which is designed to increase the rigor, integrity and transparency of the investment process through the elimination of campaign contributions by firms investing public pension money and by banning the use of intermediaries paid to open the door to public pension fund investments, will strengthen enforcement by adding misdemeanor and felony provisions and authorizing the attorney general to pursue civil actions to enjoin ongoing violations and impose civil penalties, Cuomo said.
“Public pension money is held in trust for state and local employees and is supported by taxpayer dollars. This new bill will help us safeguard that trust, and pave the way for nationwide reform,” Cuomo said.
TRUST also ensures ongoing compliance with investment firms now certifying annually compliance with key disclosure requires. Enforcement is also enhanced with the addition of comprehensive and enforcement provisions and the creation of new civil, criminal and disciplinary penalties and sanctions as well as requirements for licensed professionals to report any evidence of violations of the law.
It is alleged that former Comptroller Alan Hevisi maintained a complex criminal scheme with numerous individuals operating the the highest political and governmental levels under. The scheme used the New York state pension fund as a piggy bank for Hevesi’s chief political aide and as a favor bank for political allies and other friends, Cuomo says.