Union: Politics Guided Jersey Pension Investments
Key donors to Gov. Chris Christie are being rewarded with “lucrative” pension fund management contracts, the New Jersey AFL-CIO said Thursday in a complaint filed with the state ethics commission.
The target of the complaint is Robert Grady, chairman of the State Investment Council.
The complaint stems from reporting this week in the International Business Times that, during the Christie Administration, an increasing amount of pension funds had been steered away from low-risk funds to higher-risk Wall Street investments — often with the money placed with firms that had donated to Christie’s election efforts. The problem? Those riskier investments ended up underperforming the stock market, costing the pension fund billions of dollars.
“Despite clear boundaries created to shield pension investments from the influence of politics, it appears that the State Investment Council under Robert Grady’s direction and the Christie administration’s leadership clearly violated those rules,” said AFL-CIO President Charles Wowkanech, who represents one million union members across the state. “We urge the State Ethics Commission to investigate this pay-to-play scheme on behalf of taxpayers who are footing the bill for this abuse and pensioneers being shortchanged of their retirement funds.” Fees paid to politically connected fund managers have more than tripled under Christie, to $398 million last year alone. Many of the state’s relationships with Wall Street firms coincide with generous political contributions, even though state ethics rules require a two-year lag before a donor can be a pension investor. For example, an employee of the Blackstone Group donated $10,000 to the NJ Republican State Committee in 2011, the same year new investment business was being proposed for the firm. Another Blackstone employee donated to candidate Christie.
NJ.com offers an angry reply from the Christie Administration, taking aim at IBT reporter David Sirota, who has a long history in Democratic politics and liberal opinion journalism:
Christie spokesman Kevin Roberts scoffed at the complaint. “It’s a cheap political stunt based on shoddy, distorted reporting from an individual who over and over again has been shown to be biased, willfully inaccurate, and just flat out wrong,” he said. Peter S. Goodman, editor in chief of the International Business Times, said, “We are pleased the governor is continuing to read our stories, and we note that he has yet to challenge any facts.”