The New York Times today examines the pension fund investigations that have spread since New York attorney general Andrew Cuomo (pictured) started digging into the scandals involving such funds in this state. The notion seems to be spreading that “placement agents” who intervene between fund managers and people who would like to handle their assets are frequently crooks, and officials in 30 states are looking into the actions of such interlocutors. The Times cites the city of Fort Worth’s advisement by Consulting Services Group, which caused their public money to invested with parties from whom the Group was also collecting fees — one of them Bernie Madoff. A lawsuit by New Mexico’s former chief investment officer alleges a web of cronies in that state forced him out of office when he bucked pressure to invest in pals of Governor Bill Richardson; one advisor took $11 million in fees for promoting shaky “alternative investments” to New Mexico.
There’s been plenty of action on the score closer to home: Connecticut has fired pension consultants Aldus, against which New York has filed legal action for its involvement in the Hank Morris pay-to-play scheme. Cuomo’s pension investigations proceed apace: He recently subpoenaed the records of former state comptroller Carl McCall. It looks to be a busy year for the marshals.
Update: The Wall Street Journal focuses on officials who aren’t sweating their placement agents, and who think the answer to problematical investments lies with better management of the funds.