Carlyle Pays New York $20 Million, Riverstone Pays $30 Million… Why the Difference?
This morning’s news that Riverstone Holdings will pay $30 million to the New York State Common Fund left me a bit puzzled. Just a few weeks ago, Riverstone’s partner, The Carlyle Group, paid the pension fund $20 million for its role in the same kickback scandal. Setting aside the message this “settlement” system sends (buy your way out of trouble!), why does The Carlyle Group get to pay $10 million less than Riverstone? Is Carlyle a less bad actor? Are the $20 million and $30 million totally arbitrary? As it turns out, no. The $30 million and $20 million settlement fees represent the management fees New York State Common paid to each firm for the three funds alleged to have received commitments via a pay-to-play scheme. The firms managed to bill their investors with perfectly round numbers, it seems.
