Carlyle Groups Settles in "Pay to Play" Scandal Probe
Politically-Connected Firm Admits Payments of $13 Million to Indicted Middleman to Get New York State Business
By RICHARD ESPOSITO and BRIAN ROSS
May 14, 2009
The Carlyle Group, a giant Wall Street firm best known for its ties to former President George H.W. Bush and other prominent public officials, made more than $13 million in payments to a indicted political fixer who arranged for the firm to receive business from a New York pension fund, New York attorney general Andrew Cuomo said today.
The Carlyle Group, a giant Wall Street firm best known for its ties to former President George H.W. Bush and other prominent public officials, made more than $13 million in payments to a indicted political fixer who arranged for the firm to receive business from a New York pension fund, New York attorney general Andrew Cuomo said today.
Cuomo said Carlyle had agreed to $20 million to "resolve its role" in the ongoing corruption investigation and agreed to a new code of conduct that prohibits the use of such middlemen.
Cuomo said the code would "help eliminate the conflicts of interest and corruption inherent in a system that allows people to buy access to those holding the pension fund purse-strings."
Carlyle is the latest high-profile firm to be ensnared in a nationwide probe known as the "pay for play" scandal because Wall Street firms allegedly paid politically-connected fixers to get them business from pension funds controlled by public officials.
According to Cuomo, his corruption investigation found that in 2003, Carlyle hired Hank Morris, the chief political aide to then New York state comptroller Alan Hevesi, as "a placement agent" to help obtain investments from the New York Common Retirement Fund.
"If Boss Tweed were alive today, he would be a placement agent," Cuomo said.
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http://abcnews.go.com/Blotter/WallStreet/story?id=7586756&page=1
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