State Treasurer Denise Nappier said today her office is ending its investment relationship with a fund manager linked to an alleged “pay-to-play” scam in New York that involves that state’s former comptroller.
Nappier said she notified Aldus Capital LLC last week that its June 2008 contract to manage $65 million of state pension money will end within 90 days.
She said Houston-based Aldus was hired to be a so-called “fund of funds manager,” in which it managed small and emerging fund managers who handled about $13 million of the state’s pension money.
In New York, criminal and civil investigators are probing whether, during the term of former New York comptroller Alan Hevesi, funds such as Aldus hired sub-fund managers who in turn may have paid third parties for the privilege of managing New York’s investments
Connecticut banned fund managers from lobbying or issuing third-party payments to land state business in the wake of a “pay-to-play” investment scandal involving then state Treasurer Paul J. Silvester. Silvester pleaded guilty to corruption charges in 2000.
Nappier said she is further tightening state rules making it mandatory that all fund of fund managers doing business with Connecticut disclose all payments to third parties and placement agents, and whether any of those third parties paid any “subagents.”
“Despite these developments, I believe that the reforms we adopted in Connecticut following the criminal activities of my predecessor, Paul Silvester, have stood the test of time,” Nappier said. “In Connecticut, there are no secrets, and no deals.”
