US - The New York Attorney General has brought charges against the ex-chairman of the New York liberal party and accepted a guilty plea from a hedge fund manager accused of engaging in pay-to-play schemes involving the state's pension fund.
Yesterday's felony complaint said Harding received $300,000 for a $20m investment the new York State Common Fund made in 2004 in the Paladin Homeland Security Security Fund, a private equity fund focusing on homeland security investments.
Harding also allegedly received $500,000 for investments the Common Fund made with private equity firm Pequot.
Gary Naftalis, Harding's attorney, said: "Ray Harding is innocent of these charges. Ray has had a long and honorable career in both his private and public life. His work as a placement agent on behalf of highly respected firms was entirely honorable and lawful."
Naftalis said Harding will defend against the charges. "He looks forward to defending against these baseless accusations in court and maintaining his good name and reputation."
The charges against Harding are among a string of charges involving corruption at the $122bn state pension vehicle.
Cuomo last month filed charges against Henry Hank Morris and David Loglisci, who served as Hevesis top political advisor and Chief Investment Officer, respectively, from 2003 to 2006.
"Morris and Loglisci are charged with conspiring to sell access to the Fund in exchange for millions of dollars in kickbacks and other payments from private equity firms. The charges entail a web of corrupt acts in which top officials from the Comptrollers Office manipulated investment decisions at the Fund for personal and political gain," a Comptroller report said (Global Pensions, 20, March 2009)
According to yesterday's complaint, Harding participated in a scheme devised by Morris and Logisci to grant the pension fund's business to political allies.
Cuomo said: "The State pension fund should not be used as a political tool - it is held in trust for over one million State employees and their families. Our investigation will continue until we have unearthed all aspects of this scheme and restored the public trust."
Cuomo also said yesterday hedge fund manager Barrett Wissman pleaded guilty in a pay-to-play scheme also involving Morriss. Wissman, formerly an associate of hedge fund firm Hunt Financial Ventures (HFV), will pay the state $12m and will be charged at a later date.
The Attorney General also announced that hedge fund manager and placement agent Barrett Wissman pled guilty to a felony charge under the Martin Act, and has agreed to pay $12 million in penalties and forfeiture to the State of New York.
Cuomo said: "As alleged, when Wissman was looking for investors for his hedge fund, HFV, Morris opened the door, arranging for the State pension fund to invest in hedge funds for the first time and in particular to invest in HFV. In exchange, as charged, Morris demanded and Wissman paid kickbacks to Morris.
The State pension fund invested $100 million in HFV, and Wissman paid Morris $600,000.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.