State and Albany County investigators are examining whether the sons and top aides of former State Comptroller Alan G. Hevesi improperly reaped benefits from his control of the state’s $154 billion pension fund, according to people involved in the investigation.
Hevesi’s Sons and Aides Face Pension Fund Investigation
They are scrutinizing the relationship between Mr. Hevesi’s office and several companies, including Third Point Capital, a hedge fund. In 2005, the comptroller’s office decided to invest a portion of the pension’s money in a fund that invests in hedge funds, including Third Point. Several months later, Third Point hired Mr. Hevesi’s elder son, Daniel.
In addition, investigators are reviewing records of political contributions from investment firms and their executives to Mr. Hevesi’s younger son, Assemblyman Andrew Hevesi, a Queens Democrat. It is legal in New York State for investment managers to contribute to comptrollers (or any elected official), and they have long done so. Money managers vie aggressively for the job of investing blocks of public pension money, and New York State’s fund is so large that even a tiny piece could generate substantial management fees. It would be illegal for companies to make contributions with the understanding they would receive business or favorable treatment, but such a case would probably be difficult for investigators to prove.
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