In order to end the two-year-old inquiry by New York Attorney General Andrew M. Cuomo into its pension business, the Carlyle Group has agreed to pay $20 million and make broad changes to its practices. Carlyle, one of the world's largest private equity firms, will no longer use intermediaries, known as placement agents, to secure investment business from public pension funds, and it will curb its campaign contributions to elected officials who oversee pension funds.
"This is a revolutionary agreement," Cuomo said Thursday. "I believe it totally changes the way people operate: It ends pay-to-play, it bans the selling of access, it puts the political power brokers out of business."
Carlyle denied any wrongdoing, describing itself as the victim of the intermediaries and claiming not to know that these middlemen might have been engaged in corrupt activities. Under the deal, Carlyle executives and the firm will not face criminal prosecution or any further action by New York's state attorney general.
Cuomo says he hopes the settlement will be a model for an industrywide overhaul of how hedge funds and private equity firms interact with public pension funds. "I commend Carlyle for being the first to embrace the Reform Code," he said, "and leading the industry toward critical change of the public pension investment system."
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Reader Comments (Page 1 of 1)
5-15-2009 @ 4:11PM
clikdawg said...
So, let's see ... they get to keep all their ill-gotten booty (less the chump-change $20M to Cuomo), retain their jobs and stay out of jail.
Nice deal -- if you favor the selling of indulgences (which was a "revolutionary" idea when the Church did it way back in the day).
That corporate safety net just keeps growing, and growing ...
5-15-2009 @ 4:27PM
clikdawg said...
P.S. -- If it was really some kind of a landmark in the history of "the way people operate", it wouldn't have been revealed on a Friday afternoon; they're just tryin' to sneak it on by ya like one of ol' Tug McGraw's "Peggy Lee" pitches: "Is that all there is?" :)