Random NY Scandal Ramblings

Some assorted items related to the New York “pay to play” scandal:

Item I: Most of the tainted fund commitments come out of NY Common’s general fund. Several of them, however, come out of pools managed by outsourced managers like Aldus Equity and Hamilton Lane. I spoke to someone familiar with the set-up, who said that such pools are only quasi-discretionary. Aldus, Hamilton Lane and others do initial due diligence and make recommendations to NY Common, but do not have sole discretion. Moreover, the deal-flow can reverse, with NY Common asking the managers to research certain fund managers.

Item II: Aldus and GKM (another outsourced manager) are all over the SEC complaint. Hamilton Lane – which also happens to be NY Common’s primary PE consultant – isn’t mentioned once.

Item III: NY Common has a webpage devoted to its alternative investments, but it’s woefully out of date. The only listed contact left Common last fall, and the current holdings file is as of March 31, 2007 (you can find more recent info in the annual report, but still…).

Item IV: I’m sure it’s just coincidence, but a lot of PE pros seem to have donated to former NY Comptroller Alan Hevesi (whose political aides were Loglisci and Morris). Specifically, a lot of PE pros whose funds received commitments from NY Common via the alleged kickback scheme. Here’s a brief sampling (asterisks are for those who don’t live in NY State):

  • David Lueschen (Riverstone LLC)
    $40,000, 12/4/04
  • Lauren Leichtman* (Levine Leichtman Capital Partners)
    $37,500, 12/10/04
  • Daniel D’Aniello* (Carlyle Group)
    $15,000, 1/11/05
  • David Rubenstein* (Carlyle Group)
    $15,000, 1/11/05
  • Erica Bushner* (GKM)
  • $6,125, 5/27/05
    $6,000, 10/26/06
  • Jeff Scheinrock* (GKM)
    $6,000 10/26/06