The financial crisis brought havoc to just about every financial institution in the country. But let’s focus on the current status of state pension funds, where the crisis is beginning to look particularly grim.
Just how underfunded are state pension funds? The estimates start at well over a trillion dollars and go up from there. The answer depends on the observed time period, the difficulty in raising taxes on an already overtaxed public, and the severe problems in getting decent returns without taking unacceptable risks.
But consider the fundamentals. The disproportionately large baby boomer generation born from 1946 to 1964 already has begun retiring. This represents a demographic time bomb even without the economy faltering.
Then consider that a study of state pension funds released in 2012 showed that annual returns for large public pension funds averaged about 5.9% over the last ten years despite the fact that the target … Read More ➡ “State Pension Funds and Big Investment Firms: What Could Possibly Go Wrong?”
New York State Senator John Sampson (D-Brooklyn) was arrested today, charged with embezzelment, obstruction of justice and making false statements to the FBI.
Also, the New York Daily News reports today that the FBI is investigating a $188,500 “loan” to Sampson from Edul Ahmad, the Guyanese-American businessman who pled guilty to charges in a multi-million dollar mortgage fraud scheme.
Ahmad also made a $40,000 loan to U.S. Rep. Gregory Meeks (D-NY) who failed to disclose it until the FBI reportedly began reviewing his finances, apparently prompted by headlines about a nonprofit called New Direction Local Development Corporation. Among other irregularities exposed by NLPC, New Direction raised money for Hurricane Katrina victims who never received the assistance.
In December 2012, the House Ethics Committee announced that it could find nothing wrong with the Ahmad loan, even though the Office of Congressional Ethics, a separate entity, found:
…there is a substantial reason
… Read More ➡ “John Sampson Busted; He Also Got Loan From Fraudster Ed Ahmad”
Yesterday, the New York Times reported:
On Friday, prosecutors disclosed that Shirley L. Huntley, when she was a Democratic state senator from Queens, had secretly recorded conversations with seven elected officials and two other people after she was confronted by the F.B.I. and asked about her alleged participation in criminal schemes involving embezzlement and bribery.
NLPC exposed a sham charity Huntley founded called The Parent Workshop, to which she steered tens of thousands in taxpayer money. Our research was first reported in the New York Post of March 6, 2011, apparently triggering the criminal probe.
The nonprofit conducted no activities. Instead, the money was siphoned off by an aide and Huntley’s niece, both of who were previously charged with crimes. Huntley was defeated in a Democratic primary for her seat on September 13, 2012.
NLPC’s Huntley allegations were a byproduct of our investigation of U. S. Rep. Gregory … Read More ➡ “Queens Politics Paralyzed Amid Reports Ex-Sen. Shirley Huntley Wore FBI Wire”
Democratic State Senator Malcolm Smith, a close crony of embattled U.S. Rep. Gregory Meeks (D-NY), was arrested by the FBI this morning, along with several Republican party officials. According to various news reports, the arrests result from a scheme to bribe Republican officials to allow Smith to run for New York City mayor as a Republican. Smith is the former president of the State Senate.
From afar, the scheme seems bizarre, but in the context of the endemic graft in New York City, it is not far fetched at all. NLPC has played a key role in exposing a rotten political culture that is corrupt from top to bottom, and spans both parties.
In January 2010, NLPC exposed the involvement of Smith and Meeks in a charity called New Direction Local Development Corporation. The group appears to have served as a slush fund for Smith, Meeks and their associates. Among … Read More ➡ “State Senator Malcolm Smith Busted in Scheme to Rig New York City Mayoral Race”
The Washington Post today reports that a federal grand jury is investigating Senator Robert Menendez (D-NJ) for pushing a Dominican port security deal that would have meant a windfall for Dr. Salomon Melgen, a major donor. The post security deal was first reported in the New York Times on February 1, based on information provided by NLPC.
Post reporters Carol Leonnig and Peter Wallsten cited unnamed sources for the existence of the grand jury and a related investigation. According to the story:
Last month, people with knowledge of the case said FBI agents were conducting interviews in the Dominican Republic and the United States concerning allegations against Menendez, including the role he played in advocating for the enforcement of the port-security contract.
The reporters point out:
Cases of political bribery are extremely hard to build and prove, according to ethics experts and public-corruption defense lawyers, and many such investigations
… Read More ➡ “Grand Jury Investigating New Jersey Sen. Robert Menendez”
Frances Robles reports in the New York Times that an ex-aide to Senator Robert Menendez (D-NJ) stood to benefit from a Dominican port security deal, along with Menendez benefactor Salomon Melgen. From the Times:
Mr. Menendez, Democrat of New Jersey, has pushed United States government officials to help enforce a contract that a company owned in part by one of his major donors, Dr. Salomon E. Melgen, has with the Dominican government, which has refused to honor it.
A top executive at Dr. Melgen’s security company will be Pedro Pablo Permuy, a former national security adviser and senior legislative aide to Mr. Menendez, according to a cousin of Dr. Melgen. Mr. Permuy’s ties to the senator go back at least 20 years.
But Menendez’ office told the Times that this is all news to the Senator:
Tricia Enright, a spokeswoman for Mr. Menendez, said the senator had no knowledge
… Read More ➡ “Sen. Menendez Claims He Didn’t Know Ex-Aide Was Part of Port Deal”
Ever since the spotlight was placed on Dominican-born eye doctor Salomon Melgen and his large campaign contributions to Senator Robert Menendez (D-NJ), the question for us has been “What has Menendez done for Melgen?”
We believe that we have answer. After an extensive review of publicly available documents that link the two men, the answer relates to unusual actions on behalf of a port security company known as ICSSI.
Ray Hernandez and Frances Robles detail in a New York Times story how Menendez sought to help ICSSI “in ways that could bring the doctor a highly lucrative windfall.” From the article:
Two years ago, Dr. Melgen, despite an apparent lack of experience in border security issues, bought an ownership interest in a company that had a long-dormant contract with the Dominican Republic to provide port security. Mr. Menendez, who is chairman of the Senate subcommittee that holds sway over
… Read More ➡ “Sen. Menendez Pushed ‘Windfall’ for Melgen in Dominican Port Security Deal”
Amanda Becker reports in the Capitol Hill newspaper Roll Call today that outside groups spent $3.6 million to sponsor foreign trips for members of Congress and their staffs in 2012. The article includes my comments:
“Congressmen are frequently accused of living inside a bubble. So you can make a good case that members should be traveling and getting to see certain things overseas,” Boehm said.
“But all too often they have been arranged by groups that have very pronounced legislative interests,” he added. “And what’s more enticing than having the possibility of talking [to lawmakers] in a relaxed, vacation resort-type setting?”
Foreign travel by members of Congress that is paid for by outside groups is subject to regulations under the House Rules. Rep. Charles Rangel (D-NY), in photo, ignored the regulations in 2008 by accepting corporate-funded Caribbean junkets. He was forced to resign his Ways and Means Chairmanship after being … Read More ➡ “Boehm Warns About Special Interest Funding of Congressional Travel”
The New York Post reports today that federal prosecutors are investigating close associates of Rep. Gregory Meeks (D-NY) as part of probe into a possible casino bid-rigging scheme at Aqueduct Racetrack. According to the Post:
Investigators are asking questions about the roles of then-Senate Democratic leaders John Sampson and Malcolm Smith and others who were accused of helping the Aqueduct Entertainment Group (AEG) land a multibillion-dollar casino contract three years ago, sources said.
The AEG bid became controversial after NLPC exposed several individuals involved with the bid, including Malcolm Smith, as also being involved with a charity called New Direction Local Development Corporation. New Direction appeared to operate as a slush fund for Meeks and his friends. It also raised money for Hurricane Katrina victims who never received the aid.
In 2010, then-New York Governor David Paterson granted a lucrative gambling franchise to AEG, touching off a firestorm against … Read More ➡ “Meeks Cronies Probed in Aqueduct Bid Rigging Scheme”
The New York Post reported today that there is a federal probe of New York State Senator John Sampson, a political ally of Rep. Gregory Meeks (D-NY). Sampson is former Majority Leader of the New York State Senate.
Sources told the Post that the Sampson probe stems from a broader federal investigation of Meeks. Sampson is also linked to convicted mortgage fraudster Edul Ahmad, who is a facing a possible lengthy prison sentence in connection with his guilty plea in a mortgage fraud case. State Senator Sampson performed legal work for Ahmad and has been publicly criticized for notarizing a document for one of Ahmad’s employees despite having a lapsed notary license.
Federal interest in Meeks appears to have begun in 2010 after the National Legal and Policy Center exposed the ties between Meeks and some of his Queens, NY political allies and a questionable charity which appears to have falsely … Read More ➡ “Another Meeks Crony Under Investigation”