HOLY CRAP! WaPo Says Couric Response On Fake Documentary Is “Weaselly”
I rarely have much good to say about the Washington Post and its staff, but today at least one of them put ideology aside and did what was rightRead More »
A corruption investigation of public pension funds found that nearly $2 million was given in campaign contributions to elected officials who had influence over those investments. This included donations to the Governor of Pennsylvania Ed Rendell, a Democrat, by Blackstone Group chairman Steven Schwarzman, whose firm managed $2.8 billion of the state’s funds and took $129 million in fees.
Gov. Edward Rendell received $11,000 in contributions during his 2002 and 2006 campaigns from Stephen Schwarzman, chairman of the private equity firm Blackstone Group. Pennsylvania’s governors appoint six of the state pension board’s 11 members. The state pension fund invested more than $2.8 billion with Blackstone from 1994 through 2007. Blackstone has earned $129 million in management fees.
More than two dozen firms that have surfaced in a broad corruption investigation of public pension funds gave at least $1.97 million in campaign contributions to officials with potential influence over the funds’ investments, a USA TODAY analysis shows.
The givers included private-equity giants such as the Blackstone Group, the Carlyle Group and the Quadrangle Group, the firm founded by Steven Rattner, who in July resigned as the White House point man for the auto industry rescue.
The analysis of donations since 1998 showed the money flowed in 30 states to incumbents and candidates for governor, treasurer and other posts that influence billions of dollars in pension fund awards.
Several of the firms won pension investment work after they, their executives or hired intermediaries gave contributions. The awards generate lucrative fees and lend prestige that could help lure new clients.
Schwarzman and Rendell are also linked to the former fraudster, fugitive, and donor to Hilary Clinton, Norman Hsu.
Many “HillRaisers” — people who rustle up at least $100,000 for Hillary Clinton’s presidential campaign — are dwarfed beside Mr. Hsu (pronounced “Shu”). Several people involved in Democratic presidential fund-raising say Mr. Hsu, an apparel executive, has raised well over $1 million for the New York senator’s presidential campaign, making him one of the top 20 Democratic fund-raisers in the country.
…Mr. Hsu supports other Democrats besides Mrs. Clinton. On June 23, he helped throw a “6th Anniversary of his 60th Birthday fund-raiser” for California Rep. Mike Honda. A few days later, he joined Blackstone Group Chairman Stephen Schwarzman and lawyer David Boies to host a $1,000-a-plate 40th-birthday bash for Rep. Patrick Kennedy of Rhode Island.
In the email to the Journal, Mr. Hsu listed several Democratic politicians to whom he has given money, and said he has never asked any for favors. They include Pennsylvania Gov. Edward G. Rendell; New Jersey Gov. Jon Corzine; Massachusetts Sen. Ted Kennedy; California Sen. Dianne Feinstein; and Ohio Sen. Sherrod Brown.
Clinton returned $850,000 to 260 donors associated with Hsu after he was charged with fraud and making illegal donations in the names of others.
The role of bundlers, though, remains largely hidden from public view — except when scandal erupts, as it did in the case of Norman Hsu, a major fundraiser for Democratic presidential candidate Hillary Rodham Clinton. Hsu, a onetime fugitive in connection with a 1992 guilty plea for theft, was charged Thursday with fraud and illegally making campaign contributions in the names of others.
…Spokesman Howard Wolfson said the campaign will refund $850,000 to about 260 donors associated with Hsu. Clinton also plans to run criminal background checks on donors who have raised at least $100,000, Wolfson said. The campaign still was working out details on how the vetting process would work, he said. He said it could include asking donors’ permission to research credit histories.
Update: It’s been reported that the resignation of ‘Car Czar’ Steven Rattner was due to the involvement of his former firm, Quadrangle Group, in the pension scandal.
The peculiar timing of Steven Rattner’s departure as White House car czar has raised questions about the course of an investigation that has scrutinized his possible dealings with the New York state pension fund.
The Wall Street Journal reported Tuesday that Cuomo’s office had stepped up its scrutiny of both Quadrangle and Rattner.
That’s after an SEC complaint in April detailed a “transaction” in which Quadrangle struck a deal worth $100 million with the state pension fund after a “senior executive” of the firm met with a former official under then-Comptroller Alan Hevesi. The complaint said the firm paid more than $1 million as part of the deal.
The Journal reported in April that the “senior executive” was Rattner.
Rattner’s firm also donated to the campaign of New Mexico Governor Bill Richardson, a Democrat, in return for a $20 million investment. The founder of that state’s former investment adviser, Aldus, has been indicted.
Federal prosecutors have subpoenaed two state agencies in an ongoing investigation into investment practices in New Mexico. Of interest, according to a federal subpoena released in June, is Texas-based Aldus, New Mexico’s former investment adviser. Meyer, its founder, has been indicted in an ongoing New York investigation into pay-to-play allegations there.
Among the allegations in the New York inquiry is that Meyer helped the son of the New York state comptroller, Alan Hevesi, win a lucrative contract in New Mexico for a firm he was representing in return for Aldus’ increased business in New York, according to the criminal complaint. At the time, the comptroller’s son, Dan Hevesi, was acting as a third-party marketer.
…Richardson has one other direct tie to the investment scandal: Steven Rattner, the former head of Obama’s auto-bailout program, gave $5,000 to Richardson’s 2002 gubernatorial campaign and $15,000 to Richardson’s 2006 re-election bid.
Richardson heads the State Investment Council (SIC) which, in 2005, voted to invest $20 million with Quadrangle Group LLC. At the time of the 2002 and 2006 campaign contributions, Rattner was a managing principal in the company, which he left in February of this year to take the auto-bailout job.
Richardson was forced to withdraw as nominee for Commerce secretary after being caught in another pay to play scandal. Entwined in that investigation was none other than Gov. Ed Rendell.
Gov. Ed Rendell’s connection to a central figure in a New Mexico “pay-to-play” investigation has prompted some Pennsylvania lawmakers to renew a push for legislation prohibiting campaign contributors from receiving state contracts.
…New Mexico Gov. Bill Richardson withdrew as Obama’s nominee for Commerce secretary amid a federal grand jury’s investigation of donations to Richardson’s campaign committees by CDR Financial Products, a Beverly Hills firm that won contracts worth $1.5 million to provide advice on state-issued bonds.
…David Rubin, CDR’s chief executive officer, donated $100,000 to Richardson’s campaign committees. He gave $40,000 to Rendell, most of it when Rendell first ran for governor in 2001 and 2002.
The company in 2003 was approved as an adviser to the Pennsylvania Housing Finance Agency, a no-bid contract that eventually would pay CDR nearly $600,000.
2nd Update: Rendell was wrapped up in an additional pay to play scandal with the Bailey, Perrin & Bailey law firm.
State Attorneys General regularly hire private plaintiffs lawyers on a contingency-fee basis to prosecute cases. The trial bar returns the favor with campaign donations to state office holders. And despite the inherent conflicts of interest and questionable ethics of the practice, corporate defendants have rarely challenged such arrangements. Which is why a motion pending before the Pennsylvania Supreme Court is so remarkable — and deserves more public attention.
The state alleges that Janssen has improperly marketed the drug for off-label uses not approved by the Food and Drug Administration…what’s at issue is the fact that the civil action against Janssen is being prosecuted on behalf of the state by Bailey, Perrin & Bailey, a Houston law firm. And it turns out that Pennsylvania Governor Ed Rendell’s Office of General Counsel was negotiating this potentially lucrative no-bid contingency fee contract with Bailey Perrin at the same time that the firm’s founding partner, F. Kenneth Bailey, was making repeated campaign contributions totaling more than $90,000 to the Democratic Governor’s 2006 re-election bid.
…Under terms of the contingency-fee contract, Bailey Perrin receives up to 15% of any settlement or judgment. Even better for the lawyers, the state is barred from settling for nonmonetary relief “unless the settlement also provides reasonably for the compensation of [Bailey Perrin] by [Janssen] for the services provided by the law firm under this contract.”
It’s been revealed that the arrangement is part of a national pay to sue scheme where the law firm brings pre-packaged suits to Democratic state Attorneys General.
The rest of this underreported story is that Mr. Bailey has been running a nationwide “pay-to-sue” operation with Democratic state Attorneys General.
…Mr. Bailey’s Janssen suit is part of a national pay-to-sue operation, as he and his Bailey, Perrin & Bailey law firm have taken their pre-packaged lawsuit to many states. Janssen’s complaint asking the Pennsylvania Supreme Court to dismiss Bailey Perrin from the suit notes that the firm has “taken on numerous engagements similar to this action, including representation in the states of Louisiana, South Carolina, Arkansas, Mississippi and New Mexico.”
It’s some racket. The plaintiffs attorneys come up with novel legal theories under which to sue companies or entire industries. They then solicit state AGs (or cash-hungry Governors like Mr. Rendell) to retain them to bring cases on behalf of the government on a contingency-fee basis. Motley Rice and Lieff Cabraser are among the firms that have targeted drug companies as well as makers of cigarettes, paint and guns.
Campaign records show that, in addition to the Rendell contributions, Mr. Bailey or his law firm donated $75,000 to Mississippi AG Jim Hood; $50,000 to New Mexico AG Gary King; and $20,000 to a political action committee in Louisiana that ran ads for Attorney General Buddy Caldwell.