Thursday, October 22, 2009

What Will the Pensions Scandal Cost $$$ New York

Breaking News: Court Deals Blow to Owners of Huge Apartment Complex Stuyvesant Town and Peter Cooper Village *** Thompson Has Not Closed Gap; Trails Bloomy by 16 pts.

California Pension Investigation Gives New Yorkers Some Clues of Scandal Costs $$$

AG Cuomo is unraveling a Pay-to-play scams that have roiled the nation’s retirement funds involving a vast and deeply-enmeshed web of super-connected players. AG Andrew Cuomo says his investigation has "uncovered a Nationwide matrix of corruption – which grows more expansive and interconnected by the day.” What we don’t know at this point from the indictment and guilty pleas is how much these pay to play pension fund money managers who use campaign contributions and political connections to cut themselves into a piece of NY's working families pensions, will cost the taxpayers. The pension cost to the New York tax pay has in the last decade jumped 100% to 7 billion dollars. That was before the nation’s economic melt down which cut the value of many pension dramatically. The big question is how much of the pensions fund melt down was cased by play to play money manager’s bad investments. In the answer to that question, California is light years ahead of clueless New York.

What We Know from California

Two Main Players in California under Investigation Are Major Players in New York

We learned last week was that the California pension fund called Calpers is being rocked by 'Pay to Play' investigation. The two main targets of the investigation are Alfred Villalobos who ran the pension investment fund Arvco and Leon Black who ran Apollo Management. California investigators are looking at how former Calpers board member Vilalobos had reaped more than $50 million in fees for arranging investments that could saddle California taxpayers with hundreds of millions of dollars in losses.

Freddy Ferrer, the Democratic nominee for mayor of New York City in 2005, worked as a consultant for Alvco in 2007. Seven months after Mr. Ferrer made the introduced Vilalobos to NY State Comptroller DiNapoli, Ferrer earned $100,000 in fees and a $10 million fee for Vilalobos firm Alvco.

Leon Black's Apollo Paid Vilalobos Alvco
Leon Black private equity firm Apollo Management paid Villalobos Arvco Capital Apollo at least $40.9 million in placement-agent fees, Millions in 2007 after the New York pension fund invested $350 million Apollo, even though the state has invested with Mr. Black's firm since 1996. Starting in 1977 Leon Black learned the trade while he was employed by ex junk bond king Michael Milken Drexel Burnham Lambert. Black. Black started Apollo after Milken was jailed, after a guilty plea to six securities and reporting violations.

Villalobos Arvco Loses Money for California Pension Fund
Wall Street Journal reported that Arvco recommended some of Calpers's poorly performing investments; last year the pension fund lost nearly a quarter of its value and more than $50 billion.

Black’s Apollo has Also Poorly Performed Money managers LEON BLACK MAY NEED TO GIVE $365M TO COVER PENSIONS IN APOLLO, the returning of money is know as clawback. Apollo Management has asked for and received a two-year extension, to July 2010, in hopes of righting the money-losing fund. In 2008 to Apollo Credit Opportunities Fund I, which invests in debt markets and was down 49% as of March, according to Calpers documents? Investments in two other Apollo funds -- $1 billion in its flagship private-equity fund, and $200 million in an Amsterdam-listed vehicle that invests in Apollo's funds and deals -- were both down around 60% at the height of the stock market crash.

Villalobos Arvco clients including Apollo have obtained seven commitments from Calipers (California Pension Board) totaling more than $3.3 billion since 2006, not bad for a pension fund that accepted fewer than 10 percent of the proposals made by private equity firms represented by placement agents.

In 1993 Villalobos resigned as Los Angeles' deputy mayor for economic development after the Los Angeles Times reported that he had suffered huge gambling losses and filed for personal bankruptcy in the 1980s. What was this guy doing in New York’s pension funds? Must have been the magic of pay to play money managers

California is investigation weather Albert Villalobos and his daughter Carissa and other associates gave money to a pension board member campaign in return for business from the pension fund

Arvco also brokered a deal involving the city’s pension fund, but the office of City Comptroller William C. Thompson Jr. said Mr. Ferrer had not approached Mr. Thompson as part of any deal or for Arvco. Albert Vilalobos contributed $2000 to controller Thompson and his daughter Carissa $4,950.00.

Clueless New York We do not know how much money was lost by Vilalobos’s Arvco, Black’s Apollo, Hank Morris’ web of companies and the other pay to play involved in the New York’ pension scandal. The reason is we do not have a press investigates or holds anyone feet to the fire anymore.

Over Bill Lynch’s Dead Body Eleanor Randolph a member of the editorial board of the New York Times incredibly said on the Times’ NY1 weekend show that we hope the new comptroller Liu understand the seriousness of the weakness of the city’s pension funds and hires non political managers so we won’t have anymore Hank Morris’ money manager pay to play thing again. Give me a break. This lady could have had Liu make her any promise she wanted during the primary campaign. Has the Times turned into a complete wimp or just clueless of its own power when used wisely?

In California not only is the press more aggressive, the pension fund itself along with the other pay to play investigation is uncovering facts. That is why we know how nuch money is lost in Calpers. In New York we know there was corruption, we still do not know how much of a bill the tax payers will have to pay in the pension fund bailouts.

Asset Ratings Fix? In fact the California Pols are so far ahead of New York that their Attorney General Jerry Brown is investigating Wall Street's big credit rating agencies to determine what role they may have played in the collapse of the financial markets and pension funds. He wants to find out how the weak investments got into the California pension funds. And Brown is doing more California sues bank, alleging fraud against state's 2 largest pension funds

California Brown has issued subpoenas to Moody's Investors Service, Standard & Poor's and Fitch Ratings to determine whether they violated state law in "recklessly giving stellar ratings to shaky assets."

We went through an entire election cycle to elected a new New York City Controller and because of the careful election spin strategies of the candidates to ignore the pension scandal and the absence of media investigation reporting we have no clue of the value of our pension, no clue what the new comptroller will do to get rid of political money managers beyond the new comptroller John Liu statement that he will go back to traditional investments. True News has been reporting the pension fund scandal all along The Silence of the Lions: What the Comptroller Candidates Don't Want You to Know * Everyone is Covering Up the Pension Scandal for Their Own Reasons * OUT OF COMPTROLLER, AS SCANDAL SPREADS, CITY COMPTROLLER CANDIDATES LOOK FOR BIGGER ROCK TO HIDE UNDER

Thompson Opens the Bank for Money Managers (Untraditional Investments)

Mr. Wolf-Powers served as Managing Director - Private Markets for New York City Comptroller William C. Thompson, Jr., from 2003-2005. In this position, Mr. Wolf-Powers oversaw the process by which the New York City Retirement Systems invested in private equity, economically targeted investments and other securities for which there is not a public market. During his tenure, the New York City Retirement Systems more than doubled their allocation to the private equity asset class, and their commitments to private equity funds, committing over $2 billion to nineteen private equity funds.”

As reported in the NYT Thompson aide Josh Wolf-Powers’ advisement that Steven Rattner’s private investment firm Quadrangle Group hired the now-indicted Hank Morris as its placement agent. Rattner badly wanted to gain access to investment from the State’s pension fund and according to the Times, “Wolf-Powers told Mr. Rattner that he could not think of any investment firm that had persuaded the city’s pension fund to invest without using a placement agent.” True News has been reporting on the pension scandal all along The Wolf at Thompson's Door * True News: Wolf at Thompson Door, Part II . Avella Opens A Cut

Former director under Thompson, Josh Wolf-Powers, secured $70 million in investments for his private equity company Blue Wolf Capital after he left the Comptroller's Office. On July 9, 2007, six days after the City Council outlawed campaign contributions from limited liability corporations and partnerships went into effect, [Thompson] accepted a $4,950 donation from the investment firm Blue Wolf Capital Management L.L.C. and a $4,050 contribution from its co-founder and managing partner, Adam Blumenthal.”

The Media Pushes for the Mayor
Sometimes, stubbornness pays NYP continues its positive daily editorials of Bloomberg. I guess they want to make sure the public gets the message. There one editorial of Yassky (all the papers) did not work. It all about giving people a positive image of the mayor More Off the Track Positive Spin With the state and city budgets in a sea of red ink this is just another fake public relations spin that the new MTA chairman dumps on the dummy press Off-peak fare slash weighed (NYP)M.T.A. Weighs Lower Fares During Off-Peak Hours (NYT) , Report: MTA To Consider Off-Peak Discount (NY1) The MTA's chief will consider reduced night and weekend fares as part of the new "smart card" program. No wonder why they are spinning with the press and public, the MTA can't even dig a hole properly Bracing for 2nd Ave. Subway The MTA will shell out $500,000 to brace two shaky buildings for underground blasting along the Second Avenue Subway construction route

Road to City Hall Today's Tip Sheet: New Poll Will Take Stock of Mayoral Race (NYT) *** Education Returns To Center Of Mayoral Campaign *** Double Standard for the Times; But Then Why Not? Bloomberg Owns This Town (Huff Post) *** We can't afford 4% raise for teachers: Thompson *** Bloomberg defends the updating of the 911 system *** Bloomberg adopts an old-school strategy in mayoral race: Divide and conquer *** Thompson: I'm a better manager than Bloomberg*** The education way-back machine: Thompson should have spoken up, say Bloomberg-backing pols*** New York City Mayor: Bloomberg Overkill? (NPR) *** Sophie Elmhirst: “Bloomberg is flanked by security men and, as he enters, the band of noisy New York journalists falls silent, like an obedient class of schoolchildren. Bloomberg, the richest man in New York, with a personal fortune valued at $17.5bn, has a hushing effect.” *** With New York Picking a Mayor, the ‘Jewish Vote’ Is on the Wane Smaller and More Fractured, its Influence Is ‘Not What it Was’ (Forward) *** Smear Campaigns Mark Mayoral Race in Final WeeksEpoch Times *** Bloomberg: 'No Santa Claus In Budgeting' *** One Giuliani Critic Remains Silent Rev. Al Sharpton *** Bloomberg Explains Axing Commissioners, Raising Taxes and Being Polite to Bill Thompson *** Bloomberg Promises a Staff Shake-Up *** Poll: Bloomberg at 52 Percent *** Campaign Ad Races Heat Up in VA, NJ, and NY Contests *** Dem Doldrums in Gotham (Nation) *** Battling For The Orthodox Vote New York's Economic Melt Down Paterson Administration Fears Cost of U.S. Health Care Overhaul ***Fizzy fit over 'tax' on sodas GOP Against *** Dave's smokes signals on sale of smokes It suggests that the governor is prepared to correct this outrageous flouting of state law by Indian reservations, as we've long urged, and that he understands the violent resistance that could result *** Sharp Drop in Building Residences in the City *** NYC construction spending to drop 20% this year *** Mets owner Wilpon liable for Madoff millions *** Gov. Paterson eyes chance to talk up his budget fix *** Carnegie Hall stagehand earned over 500G in salary & benefits *** How to save New York: Legislature must not undermine Paterson's painful budget cuts (DN ED) *** Junior's mousecake photo leaves bad taste for cheesecake lovers *** Nanette Lepore, Diane von Furstenberg and Michael Kors rally to support Garment Center *** Ex-Bellevue boss fined for giving aides personal tasks *** State leaders attended a public leaders’ meeting to rehash talk of the budget. (TU) *** Paterson declines to call for Sen. Hiram Monserrate’s expulsion from the Senate. (AP) *** Republicans name their members to the Monserrate panel. (TU) *** State officials signal a growing interest in letting D.C. resolve the issue over taxes on cigarettes sold on Native American reservations. (BN) *** Thomas Carroll pens an op-ed, criticizing Paterson for not pushing for changes that would make New York competitive for federal “Race to the Top” education funds. (NYP) *** Fewer than 6,300 units of housing will be built in the city this year *** The Post says is would be "a sign of leadership" if Paterson can successfully collect cigarette taxes from Indian reservations *** The Times Union says the case of Hiram Monserrate shows that the State Senate needs a new ethics review process *** LG Richard Ravitch says the state is being "penalized for our generosity" on Medicaid; the administration is worried health care reform will further increase the deficit *** By creating a special committee to deal with Sen. Hiram Monserrate, the Senate has acknowledge the existing ethics committee is "worthless," the TU says *** Paterson: You Just Cost me $1 Billion, Obama *** Food Stamp NYC Enrollment Surges to 1.6 Million
*** Paying for Monserrate probe (UPDATE) *** Election Officials Fear Poll Workers Won't Show Up on Nov. 3 *** Mayor Bloomberg on what Albany will do in the budget negotiations: "(W)hat they’re going to do is screw the city. It’s the only practical thing for them to do." *** Court Rules In Favor Of Stuy Town, Peter Cooper Tenants *** After Stuy Town Decision, Experts See Real Estate Market "Collapse." Really?Pay to Play Ex-Queens pol Anthony Seminerio brags to FBI about LIRR job hookup: Court hears *** Prisoner # 210-717 Big, bad Bernard Kerik wants to bunk with the regular Joes -- even if they're accused killers, rapists and muggers. The disgraced former city police commissioner yesterday refused to ask to be separated from the general population *** As Kerik Seeks Appeal, He Remains No. 210717 (NYT) *** Kerik lobbied Bush for pardon (DN) Fraud Reported in Program to Help New Homebuyers *** Lobbyists pay $60,000 fine *** Lobbyist watchdog names new head

White House Bank $hot by Obama pay czar , U.S. to Order Steep Pay Cuts at Firms That Got Most Aid *** Eyeing a Democratic Win, the President Joins Corzine in New Jersey *** Fate of White House Counsel Is in Doubt *** U.S. to Order Steep Pay Cuts at Firms That Got Most Aid *** Clinton Says Iran and North Korea Must Curb Nuclear Ambitions*** Japan moves to redefine alliance (Wash Post) *** Obama: I'm Not Losing Sleep Over Fox News*** Music Stars Demand Records On Bush Admin's Use Of Music For Torture *** Cheney: Stop The "Dithering" As Troops Face Danger *** Institutions allied with Bush now bemoan their treatment by the Obama administration. (WT) *** A new documentary depicts Rahm Emanuel in the quest to win back the House in 2006. (NYT) *** How Obama Should Play the Surge - Patrick Eagan & Joshua Tucker, TNR *** Obama's Military Problem Getting Worse - Peter Feaver, Foreign Policy *** Press Shamefully Silent on WH War on FOX - Tucker Carlson, Daily Beast *** Another Entitlement for Seniors - George Will, Sacramento Bee *** Iran Keeps Obama Waiting on Nuclear Deal - Tony Karon, Time *** Opponents Hit w/Chicago Brass Knuckles - Michael Barone, DC Examiner *** White House Hammers Cheney Over Criticism

Congress AIDS Funding Bill Sails Through the House *** Strains for Democrats in Budget-Balancing Act *** Drug Makers Are Advocacy Group’s Biggest Donors *** Compromise Bill Could Block States on Bank Rules *** House Panel Approves Bill Curbing Insurers' Antitrust Exemption *** Major Wall Street Firms Ramp Up Political Donations, Lobbying *** New focus on Maine's other centrist Republican senator *** Grayson Launches Site To Honor, Name Those Dead From Lack Of Health Care *** Medicare Vote Divides Democrats (WSJ) *** Public Option Redux - A.B. Stoddard, The Hill *** Does the Public Want a Public Option? - Jay Cost, RealClearPolitics *** Lefties Fear Strong Women Like Liz Cheney - Noemie Emery, DC Examiner *** Uncle Sam Spending Like a Drunken Sailor - Investor's Business Daily

Wall Street and the Economy Bove: Wells Fargo not 'sustainable' *** Financial Woes Plagued Galleon Informant *** As the Dollar Sinks, Oil Skyrockets *** Plug-In Cars Are Almost Here, but Charging Stations Lag *** Morgan Stanley Returns to a Profit ***Bank of America Sells Republic Bank to Private Equity Firms *** $13 an Hour? 500 Sign Up, 1 Wins a Job *** A Slow Summer Hurt Continental and American Airlines *** Waiting for the Next McMansion to Drop *** Galleon a shipwreck: Hedge fund shop to 'wind down' *** BofA reportedly selling First Republic Bank *** Galleon Sinks; Informant Surfaces (WSJ) *** Slump Hits Howard Hughes's Heirs *** Fidelity Boosts Foreign Trading *** Wal-Mart Plans More Price Cuts *** Wall St. Wizards Get Chance to Do It Again - Margaret Carlson, Bloomberg *** Raising the Debt Ceiling - David Broder, Washington Post *** Fed to Step Up Reviews of Compensation at Banks *** The Man Who Could Salvage Wall Street

National In Atlanta, String of Black Mayors May Be Broken *** Virginia and Gun Control Candidates for governor in Virginia should pay attention to the polls that found voters want stricter gun controls

International Pakistani Brigadier Is Assassinated *** Mending Fences, Biden Assures Poland That U.S. Is Watching Over It *** China’s Economy Expands 8.9 Percent *** Britain and Its Central Bank Disagree on Banking Laws *** In Iraq, battling an internal bane (Wash Post) *** Robert Mugabe vs. Zimbabwe (NYT Ed) *** China Expands Cyberspying in U.S. *** For Vatican, New Resolve to Expand *** Saudi Family Feud Roils World Banks

Terror Plot Terror Suspect Held in Boston *** Traitors in our midst: Home-grown Islamic terrorists cropping up all over the United States *** Traitors in Our Midst - New York Daily News

Media and New Tech Cyberspace sings Google, Facebook and MySpace are playing your song -- or hoping to. Three of the Internet's biggest companies and fiercest competitors are all planning to unveil new services designed to help users discover and buy music *** Microsoft, Google get anti-social *** Ax swings at Condé *** Windows 7 Keeps the Good, Tries to Fix Flaws
***2 Deals Hint at Revenue for Twitter ***The Billion Designers of Windows 7 ***Google, Microsoft Intensify Rivalry ***Higher Prices on Windows 7 ***Seth Lipsky: All the News That's Fit to Subsidize*** Comcast subscribers get HBO shows online - for free *** moves to subscriber model *** SIGN OF THE TIMES: $35.6M LOSS IS GOOD NEWS