NY's Cuomo probing fund investor's campaign funding

Legal News Line Oct. 17, 2007, 11:55am

ALBANY -- New York Attorney General Andrew Cuomo is probing links between a prominent hedge-fund investment firm and a former state comptroller and admitted felon. Cuomo is investigating a number of suspected irregularities that occurred at the New York State Pension Fund under Alan G. Hevesi's sole trusteeship. The fund invested $447 million in Guggenheim Advisors' "fund of funds" in 2005. The firm's two top executives, Patrick T. Hughes and Loren M. Katzovitz, each donated $25,000 to Hevesi's campaign one month before he won re-election last November. One month later he resigned after admitting improperly using a state vehicle and is now under wider investigation, the New York Times (NYT) reported. The AG's office is seeking evidence that a Hevesi fund-raiser used the pension-fund investment as leverage to pry contributions from Hughes and Katzovitz to the comptroller's campaign. Guggenheim Advisors has earned $3.2 million in fees since the state's 2005 investment, NYT noted. New York City-based Guggenheim Advisors is majority-owned by Dublin-based financial-services giant Bank of Ireland. Its board of advisors includes presidential candidate Fred D. Thompson and former White House economic advisor Lawrence B. Lindsey. Hevesi earlier denied knowing that a key aide was getting payments from other investment companies that did business with the fund, NYT wrote. The New York State Pension Fund has $154 billion under management.

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