Legal News

New York AG?s Pay-to-Play Probe Heats UP

By Ashby Jones

It was a big day yesterday for New York attorney general Andrew Cuomo in his long-running corruption investigation of officials who oversaw the state's massive pension fund.

Cuomo has alleged that state officials awarded pension-fund business to money managers in exchange for kickbacks and other assorted personal and political payments.

David Loglisci, the chief investment officer of the fund from 2004 to 2007, pleaded guilty Wednesday to a felony, admitting that investment decisions at the fund were based partly on the "political benefit" money mangers agreed to provide to former Comptroller Alan Hevesi, who helped oversee the fund.

Here’s a WSJ article on the guilty plea, the first by a former official at the fund. Hevesi hasn't been charged, and his lawyer, Bradley Simon, denied wrongdoing.

But an even bigger fish ─ Steven Rattner, the Wall Street financier and former auto czar ─ made news yesterday in connection with the investigation.

Rattner is in settlement talks to resolve his role in the "pay to play" matter, WSJ's Peter Lattman reports.

Cuomo has investigated Rattner's activities at Quadrangle Group. Quadrangle, a private equity firm Rattner founded, allegedly obtained a $100 million investment from the New York state pension fund three weeks after a DVD company owned by Quadrangle agreed to distribute "Chooch," a low-budget move co-produced by none other than David Loglisci and his brother, according to court papers.

A spokesman for Rattner declined to comment.

So, what do we know about "Chooch," which has become a bit player in the pension-fund saga? According to the filmmaker's press kit, "Chooch" is about two Queens residents (One being Dino Condito, "the Chooch"), who were abducted in Mexico by a pair of thugs before they were saved by some of their friends from Queens and by the Chooch's pet dachshund. "Only after a jail bust, donkey ride, chicken coop explosion, and a life-changing love affair at the local bordello does the [Queens] crew finally arrive to save the day," the press kit explains.

Full post as published by Law Blog - WSJ.com on March 11, 2010 (boomark / email).