The New York City Comptroller is investigating whether Quadrangle Group “intentionally mislead or deceived” city pension funds by not disclosing payments to an investment firm affiliated with indicted pay-for-play suspect Henry Morris.
The New York City pension funds committed $85 million to Quadrangle in 2005 and $40 million in 2006. At the time, according to the Comptroller, Quadrangle never mentioned any relationship with Searle, a company affiliated with Morris.
A Wall Street Journal report Tuesday said Quadrangle paid Searle for the 2005 investment, citing an attorney for Searle.
“The information provided to the five New York City pension funds and the New York City Comptroller’s office indicate that neither Hank Morris nor Searle were in any way involved as placement agents in connection with the funds’ investment in Quadrangle Group,” the comptroller said in an emailed statement. Thompson was in control of the city pensions at the time the commitments were made, having been elected in the office in 2002 and re-elected in 2006.
Quadrangle did disclose that it used Monument Group and Helix Associates “to assist in the marketing of QCP II”.
Quadrangle was co-founded by Steve Rattner, who left the firm earlier this year to join the administration of US President Barack Obama as an advisor on the auto industry.
Morris, a former political operative with former New York State Comptroller Alan Hevesi, along with David Loglisci, former chief investment officer with the $122 billion New York State Common Retirement Fund, were indicted by New York’s attorney general Andrew Cuomo for allegedly collecting sham finder’s fee from investment firms looking for commitments from the pension. The attorney general indicted two other people for the alleged scheme.
Morris allegedly expanded his scheme beyond New York into New Mexico, where Quadrangle and The Carlyle Group allegedly paid Morris’ company finder’s fees for investments from the New Mexico State Investment Council, an oil and gas endowment.