Less than a month after New York’s former comptroller was put in prison for a corruption scheme involving the New York Common Retirement Fund, New Mexico’s pension system filed two lawsuits, one in federal court and the other in state court, seeking damages and restitution from its own pay-to-play scandal. New Mexico’s scandal allegedly involves the state’s former pension chief as well as close associates of former Gov. Bill Richardson. In addition, the suits name many of the same people implicated or found guilty in the New York scheme.
The federal suit targets defendants living outside New Mexico, while the state case is aimed at defendants in the state, according to sister magazine Buyouts. Both suits were filed by the New Mexico State Investment Council, which manages $15 billion in pension funds.
At the center of the state-level suit is Gary Bland, a Richardson appointee who served as the council’s chief investment officer of from 2003 to 2009. Bland was forced to resign following the launch of a federal investigation into the state’s investments and because of pressure from the council’s board. Investments in the state’s $1.3 billion private equity portfolio were at the center of the alleged wrongdoing.
The state suit called Bland “one of the primary perpetrators” of New Mexico’s pay-to-play scheme, alleging that while Bland was in office, “Governor Richardson’s supporters and senior members of his staff requested Bland to secure political contributions from investment management firms that had received fees in connection with investments.”
The suit says that New Mexico funds were steered to particular investment managers for “selfish” or political reasons. Attempts to reach Bland and his attorney, Ira Robinson, were unsuccessful; however, in an AP report, Bland called the allegations “absurd.”
Richardson, a Democrat who was New Mexico’s governor between 2003 and 2010, was not personally named in either case. A spokesman for the former governor, Gilbert Gallegos, said in a written statement: “Gov. Richardson remains confident that all investments by SIC were first properly vetted by the competent staff of financial analysts the SIC, and made with the best interests of the state in mind.” He also added that, “after a thorough investigation of state investments, a federal grand jury has not found any wrong-doing by the Governor’s Office.”
There have not yet been any criminal charges announced, but state and federal authorities have requested SIC documents as part of their investigation. Gov. Susanna Martinez, the current Republican governor who doubles as the chairman of the New Mexico State Investment Council, said in a press release: “As we wait for justice in the criminal courts, we must aggressively pursue legal action of our own. These efforts must continue until all responsible parties are held accountable for the abuses that occurred here in New Mexico.”
Neither suit has yet put a dollar figure on the damages and compensation being sought, but state documents reveal that the placement agents named in the suit shared $22 million in fees.
The federal suit names 14 individuals. Among them is Anthony Correra, who was one of Gov. Richardson’s key supporters; according to the case, he often claimed to be speaking on behalf of the governor. He was known, according to the suit, as the “de facto gatekeeper” for getting favored investment proposals in front of Bland and the SIC’s board. Those investments were then used, according to the suit, as tools to garner contributions that benefited Gov. Richardson’s political campaigns. Calls to Correra’s attorney, Sam Bregman, were not returned.
Correra’s son, Marc, one of the main placement agents named in the suits, left the country in 2009 and is currently living in Paris, France, according to the AP, citing documents filed in a Texas divorce suit. Buyouts was unable to locate or contact Marc Correra or his attorney.
Another person named in the federal suit is Saul Meyer, and his firm, Aldus Equity Partners. Aldus was a key adviser on private equity investments to the SIC, its contract being terminated in 2009 following the firm’s implication in the New York pay-to-play scandal. Meyer, who has pleaded guilty to securities fraud in New York, said in a plea agreement that because of political pressure, he recommended certain favored investments to the SIC. Calls to Meyer’s attorney, Paul Shechtman, were not returned at press time.
The connections between the two scandals do not end there. Also named in the New Mexico suits is Hank Morris, who was dubbed the mastermind of the New York scandal. Earlier this year, Morris was sentenced to up to four years in prison. Calls to Morris’s attorney, William Schwartz, were not returned. In addition, Daniel Hevesi, a former New York state senator and son of Alan Hevesi, the imprisoned former New York comptroller, was named in the federal suit as a placement agent for one of the New Mexico’s investments. Attempts to locate and contact Daniel Hevesi were unsuccessful. Alan Hevesi is currently serving up to four years in prison for New York’s corruption scheme.