State agencies have already suspended their deals with Aldus Equity pending internal reviews
The FBI has questioned officials from two state investment agencies about Aldus Equity, a firm that does business with the state and is involved in a pay-to-play scandal in New York, The Associated Press is reporting.
The federal agents met earlier this month with officials from the State Investment Council (SIC) and Educational Retirement Board (ERB) about the firm, the news service reported. Last week, both agencies suspended their deals with Aldus, which has advised both on billions of dollars in private equity investments.
Both suspensions are pending internal reviews.
The AP quoted Charles Wollmann, spokesman for the SIC, as saying that the FBI met with the agency’s lawyer and director of private equity, who were “fully responsive and cooperative.” ERB Executive Director Jan Goodwin wouldn’t answer the AP’s questions about the FBI, but the news service quoted a source with knowledge about the situation as confirming a meeting between the FBI and ERB officials.
Aldus issued this statement:
“While we are not going to discuss ongoing investigations, we can assure you that every investment Aldus has recommended to New Mexico’s SIC and ERB was based solely on the merits of the funds, after they were examined through its thorough due diligence process.”
The New York scandal
Aldus is involved in a scandal that has already led to indictments in New York and is growing in New Mexico. It’s one of several firms that allegedly agreed to pay kickbacks in exchange for business with the State of New York’s pension fund.
Another firm under scrutiny is Quadrangle Group LLC. The head of President Barack Obama’s auto-bailout program, Steven Rattner, was a managing principle in the firm until he left to take the government job in February. Though he hasn’t been charged with any wrongdoing, Rattner has been identified by national media outlets as the unnamed person in federal documents who allegedly arranged in late 2004 for Quadrangle to pay $1.1 million in exchange for business with the state of New York.
Hank Morris is under indictment in the New York case, accused of using his position in that state’s comptroller’s office to shake down companies wanting to do business with the state’s pension fund. Morris is accused of taking 95 percent of the money from Quadrangle as a kickback. He denies the allegations.
Neither Aldus nor Quadrangle officials are under indictment in the New York case.
In NM, scandal, scandal and more scandal
Morris served as the third-party marketer who helped Aldus and Quadrangle win the investment deals in New Mexico.
Rattner gave $20,000 to Gov. Bill Richardson’s gubernatorial campaigns. Richardson heads the SIC. The ERB chairman, Bruce Malott, is a close ally of the governor.
But that isn’t quite the end of it. As reported by the AP, the son of former New York Comptroller Alan Hevesi, who oversaw the pension fund at the center of the scandal in that state, has also done business in New Mexico. Dan Hevesi received a $250,000 fee for a 2006 investment of $25 million in a private equity fund, according to SIC records.
As if all that isn’t difficult enough to keep straight, it simply adds to the number of pay-to-play scandals dogging the Richardson administration. There’s also the ongoing federal, criminal grand jury investigation into allegations that the Richardson administration traded a lucrative state bond contract for $110,000 in contributions to Richardson’s political committees and his 2006 gubernatorial campaign.
And there’s the lawsuit brought by Frank Foy on behalf of the state alleging that the SIC and ERB made investments with Vanderbilt Financial and affiliated companies in exchange for a little more than $15,000 in contributions to Richardson’s 2008 presidential campaign. The state ended up losing $90 million in those investment deals.