Raimondo’s Top Hedge Fund is Being Investigated by Feds
Friday, May 02, 2014
The hedge fund receiving the most in fees from the Gina Raimondo's employee retirement fund is being investigated by the Securities and Exchange Commission.
The firm Och-Ziff has received millions in fees from the Employee Retirement System of Rhode Island - the board selecting Och-Ziff is chaired by Raimondo. Her strategy to shift large portions of the state's pension dollars over to hedge funds has come under criticism by Ted Siedle of Forbes and a forensic investigator, Matt Taibbi of First Look Media (formerly Rolling Stone magazine), public unions and former General Treasurer Frank Caprio. He is running for General Treasurer in 2014 after a failed campaign for Governor in 2010.
The SEC announced an investigation of Och-Ziff for violations of the Foreign Corrupt Practices Act.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"Under Raimondo's secrecy scheme, there's no way for the public to know that Rhode Island pension fund investments are being investigated in violation of law, said Siedle in an interview with GoLocal Thursday night.
Raimondo, who was elected as General Treasurer in 2010, has defended the investments in hedge funds as important to diversify the state's investments. Raimondo is a 2014 candidate for Governor.
Siedle is the head of a forensic auditing firm and a columnist for Forbes magazine. He is presently conducting a review of misspending in the South Carolina pension system.
Hedge Fund Shift
Since Raimondo became General Treasurer she has led a an effort to shift billions of retirement funds to hedge fund investments.
"Raimondo's position that 25% of the state pension fund -- or $2B -- can be cloaked in secrecy illustrates the dangers of her position, with her lack of oversight," said Siedle.
Barron's report, "The Wall Street Journal reported that Och-Ziff faces Securities and Exchange Commission and Justice Department scrutiny over $234 million in loans to companies controlled by Israeli mining magnate Dan Gertler in connection with controversial oil and mining deals in the Democratic Republic of Congo. The news prompted a 10% slump in the stock on Monday."
"Her secrecy policy fosters illegal activity -- foreign corrupt practice cases tend to move pretty quickly, because they involve public companies that have to disclose they're being investigated," said Siedle.
"In this case, it really tests whether Rhode Islanders are willing to accept a culture of secrecy that fosters illegal activity by shielding it from the public eye. She's the only one to know how these secret investments are being made, and whether they're violating the law," said Siedle.
Related Slideshow: Timeline - Rhode Island Pension Reform
GoLocalProv breaks down the sequence of events that have played out during Rhode Island's State Employee Pension Fund reform.
Related Articles
- NEW: Siedle Blasts Raimondo for Withholding Hedge Fund Info
- Aaron Regunberg: Think Again on Pension Reform
- Donna Perry: Don’t Ruin the RI Pension Reform Law
- Laffey Blasts Raimondo on Pension Reform
- NEW: Mediation Ordered in State Pension Reform Lawsuit
- NEW: Raimondo Featured In Institutional Investor on Pension Reform
- REPORT: RI Public Pension Reform - Wall Street’s License to Steal
- Special Session 2011: Business Leaders Demand Pension Reform
- Will the State & Organized Labor Reach a Deal on Pension Reform?
- State Pension System to be Investigated by Siedle
- Anti-Pension Reform Lawmakers Cash in with Unions
- Donna Perry: No Time for Timid Pension Reform in Providence
- Lawmakers Rake in $120k Since Voting Against Pension Reform
- NEW: Freezing COLAs is Only One Step to Local Pension Reform, Group Says
- NEW: New Pension Reform Coalition Formed
- NEW: Raimondo—Pension Reform Needed to Avoid Budget Disaster
- RI Groups Will Target Lawmakers Who Oppose Pension Reform
- State Pols Left in the Dark on Pension Reform Bill
- Should Raimondo Release Contracts with Hedge Funds
- Ted Siedle and Matt Taibbi: 13 Who Made a Difference in RI in 2013
- BREAKING: Pension Reform Bill Passes; Heads to Governor’s Desk
- Donna Perry: Time for Heavy Lifting on Disability Pension Reforms
- Majority of Anti-Pension Reform Lawmakers Returning to Smith Hill
- NEW: Governor Chafee Says Pension Reform is “Incomplete”
- NEW: Pawtucket Mayor Calls for Municipal Pension Reform
- PODCAST: Rhode Island Pension Reform Showdown - Who Will Prevail?
- RISC’s Five Pillars of Pension Reform
- State Report: Rhode Island Pension Reform & Falling Off the Fiscal Cliff
- Ted Siedle: Hedge Fund Industry Loves RI Pension—For Good Reason
- Central Falls Paves the Way for Pension Reform
- Donna Perry: Union Strategy: Sabotage Pension Reform
- Municipal Pension Reform May Be Impossible
- NEW: Governor Postpones Israel Trip to Focus on Pension Reform
- NEW: Pension Reform Coalition Created
- PODCAST: State Pols Left in the Dark on Pension Reform Bill
- Rhode Island Pension Reform Showdown - Who Will Prevail?
- Taveras Budget: No Pension Reform—Yet
- Exclusive: Rolling Stone’s Taibbi Responds to Raimondo Comments
- Chafee Pushes Pension Reform to Cities
- Exclusive Poll: Two-Thirds Of Voters Don’t Trust Pols With Pension Reform
- NEW: Chafee Release Video Touting Pension Reform
- NEW: Governor and Treasurer Outline Pension Reform Proposal
- NEW: Poll Says Rhode Islanders Want Pension Reform
- Pension Reform Breakdown: Plan Kills COLAs For 19 Years
- Rob Horowitz: Pension Reform Poised for Adoption
- Tea Party Lines Up Behind Treasurer Raimondo on Pension Reform
- Matt Taibbi’s Deceptive Hatchet Job on Gina Raimondo
- Chafee: Everything on Table for Pension Reform
- Experts React to Rhode Island Pension Reform Agreement
- NEW: Chafee Releases Pension Reform Video
- NEW: Governor and Treasurer Unveil Pension Reform
- NEW: Providence City Councilman Calls for Local Pension Reform
- Pension Reform Coming For Providence
- Rob Horowitz: Pension Reform is a Political Winner
- Travis Rowley: Pension Reform? Or Pension Negotiations?
- In Case You Missed It: Siedle Report on RI Pension Investments
- NEW: Caprio Splits with Raimondo on Hedge Funds
- Council at Odds: Members Call for Changes to Pension Reform
- Forbes: Retirement Planning in the Face of Pension Reform
- NEW: EngageRI Supports Providence Pension Reform
- NEW: Hassett and Igliozzi Call for Changes to Providence Pension Reform
- NEW: Providence Council Takes Up Pension Reform
- Pension Reform Lawsuit Decision: The Timeline
- Rob Horowitz: RI Leads the Way on Pension Reform
- Travis Rowley: “Hope and Change” for “Pension Reform”
- MINDSETTER™ Ted Siedle: News from the State Pension is All Good
- A LIVELY EXPERIMENT: Pension Reform
- Does Rhode Island’s Pension Reform Law have Any Hope of Survival?
- Kerry King Addresses Pension Reform
- NEW: Former Union Head Day Blasts City Council on Pension Reform
- NEW: Judge Won’t Halt Pension Reform Law
- NEW: Providence Retirees Approve Pension Reform
- Providence Would be Devastated if Courts Block Pension Reform
- Russell Moore: Don’t Gut Pension Reform
- Who Won this Round of the Pension Reform Battle?