Cuomo sits one out in pension probe

By John O'Brien | Jun 25, 2009


NEW YORK (Legal Newsline) - In his investigation into those who handle public pension funds, New York Attorney General Andrew Cuomo distanced himself a hedge fund manager that has handled his money.

A Bloomberg report says Cuomo recused himself in any probe of EnTrust Capital, Inc., which managed his personal and campaign finances. Any EnTrust matters were given to special counsel Linda Lovelace in 2007, the report says.

EnTrust has never been a subject of the probe, the company said in the report.

Two firms have settled with Cuomo and agreed to adopt his code of conduct.

The Caryle Group was the first company to adopt the code of conduct, which bans campaign contributions to those who control public pension funds. It also bans investment firms from using placement agents, lobbyists or other third-party intermediaries.

Riverstone Holdings also settled with Cuomo and paid $30 million to the New York State Common Retirement Fund.

Cuomo has been joined in his investigation by more than 30 states. He started by digging into former Comptroller Alan Heyesi.

Cuomo said Carlyle retained Hank Morris as a placement agent in 2003 to obtain investments from the New York Common Retirement Fund. Morris was the chief political aide to Heyesi.

Carlyle obtained approximately $730 million in investment commitments from the CRF, and the company paid Searle & Company, the broker-dealer associated with Morris, nearly $13 million in placement fees, Cuomo said.

The "lion's share" of those fees were paid to a company controlled by Morris, Cuomo said

Criminal charges have been filed against Morris. Cuomo has subpoenaed more than 100 investment firms.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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