Federal prosecutors have subpoenaed the State Investment Council (SIC) for documents related to its investment deals, Bloomberg is reporting.
That’s just one of several news items in the last two days that indicates that the investment scandal that began in New York is spreading even further in New Mexico. In addition, a third-party marketer who did business in New Mexico has pleaded guilty to charges he faced in New York, and a company involved in the scandal has agreed to pay $20 million and reform its investment practices to avoid prosecution.
But first the subpoena. SIC spokesman Charles Wollmann, speaking to Bloomberg, confirmed the subpoena from the U.S. attorney in Albuquerque but would not describe the contents.
“We’re working to comply with the request of the authorities,” Bloomberg quoted Wollmann as saying. “We’ll be cooperating fully.”
Meanwhile, as reported by the Albuquerque Journal, third-party marketer Julio Ramirez pleaded guilty to securities fraud in New York this week. Like so many others in the New York scandal, he has connections to New Mexico. From the Journal:
“Ramirez shared in $1.5 million in third-party fees paid in connection with the four New Mexico deals and, on at least two of them, shared the money with Marc Correra, a Santa Fe placement agent who is the son of a close friend and supporter of Gov. Bill Richardson’s.”
Ramirez pleaded guilty in New York to being involved in the taking of kickbacks by Henry ‘Hank’ Morris, the man at the center of the New York scandal, from companies that received state investment business. In some instances, according to the Journal, Ramirez was the middle man for those payments.
Last, there’s The Carlyle Group, one of the largest equity funds in the nation, which, according to The Associated Press, agreed today to pay the $20 million “and make other reforms to resolve its role in an influence-peddling scandal at New York’s public pension fund.”
What role was that? Well, the company, according to the news service, “paid $13 million to Morris for his help in influencing the fund, which ultimately invested more than $730 million dollars with the company.” While the company has denied wrongdoing or knowledge of wrongdoing, it released a statement saying it has been “victimized by Hank Morris’s alleged web of deceit,” according to the AP. The company said it intends to sue Morris.
Carlyle also agreed to ban employees from making campaign contributions to officials who have influence over state investments and said it would stop hiring politically connected third-party marketers.
Now the New Mexico connection. From the AP:
“Carlyle paid Morris $150,000 for his help lobbying for a $20 million investment from New Mexico’s state investment council.”
If you have the sense that this scandal isn’t nearly done spreading, I think you’re right. It already spans at least 30 states. Though New York is the only in which criminal charges have been filed, the state grabbing the most attention after New York is New Mexico.
Stay tuned.