As part of a new agreement with the New York Attorney General’s office and its pension probe, Patricia Lynch Associates (PLA) has agreed to pay nearly $500,000 to the state.
Also, its founder, Patricia Lynch, is banned from stepping foot within the state Comptroller¹s office for a five-year period.
According to state Attorney General Andrew Cuomo, Albany-based PLA, a firm that was created in 2001, will fork over the half million dollars and agree to stay away from Comptroller Thomas DiNapoli’s headquarters, the investment adviser and sole trustee for the New York State Common Retirement Fund (CRF).
Cuomo stated in today¹s announcement that Lynch “sought to curry favor” at the state CFO office “by arranging contributions for Alan Hevesi’s campaign, a consulting contract for the daughter of the Chief of Staff’s girlfriend, and gifts worth thousands of dollars for the daughter.”
In 2004, PLA’s creator and additional staff began to meet with former Comptroller Hevesi’s “concerning pension fund business.” During the period, the firm received $10,000 monthly in lobbying fees from then client LW Strategies. And in September 2005 and March 2006, PLA attempted to court the CRF for possible investments with its clients; the firm fell short.
However, in 2007, it secured a $13 million investment by the New York City Police and Fire Pension Fund in a strategy managed by GE Capital Management & Advisors. As a result, Lynch and her partner received $104,000 in placement fees, which they split. At the time, Lynch was not a licensed securities broker and her partner in the firm was not registered broker-dealer.
Collectively, Lynch obtained about $52,000 in placement fees from the New York City pension fund investment, Cuomo said.
“Gifts, favors, and campaign contributions are not a legitimate basis for government contracts or special treatment,” New York’s future governor said in his comments. “Lobbyists whose stock-in-trade is pay-to-play have no business appearing before government agencies that safeguard taxpayer dollars. Those who market investments must follow the rules, and lobbyists are no exception.”
Additionally, Dallas-based Aldus Equity and its current former partners have agreed to pay $1 million in cash, forfeiture of certain fees and forfeiture of interest in the Aldus/NY Emerging Fund, a fund that held $475 million in capital from the CRF.
The private equity firm’s decision comes following its former Principal Saul Meyer pleaded guilty in October 2009 to Martin Act securities fraud. Aldus Equity’s agreement “concerns the firm’s responsibility for securities fraud,” the announcement said, while noting that Meyer is scheduled for sentencing next Thursday.
As of press time, attempts to reach Darren Dopp, a spokesperson and partner at Lynch’s firm, seeking comment on the agreement were not immediately returned. Alternately, Aldus Equity’s Dallas office main phone line was disconnected.
Collectively, both PAL and Aldus Equity have agreed to sign onto Cuomo’s Public Pension Reform Code of Conduct, which to date, includes investment firms, lobbying firms, placement agents, and unlicensed individuals. In total, through his investigation, Cuomo has returned nearly $160 million back into New York’s pension coffer.
Michael Giardina is a reporter for IMWeekly, a SourceMedia publication