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Sunday, July 22, 2018

Christie’s Latest Scandal: How He Sold Public Pensions To Wall Street Donors

Christie’s Latest Scandal: How He Sold Public Pensions To Wall Street Donors

The media would label it Pensiongate — if they were interested.

When Governor Chris Christie (R-NJ) cruised to his first statewide election victory in 2009, his promise to responsibly manage the state’s pensions helped deliver him the governor’s mansion. It’s Democrats like Governor Jon Corzine who are playing fast and loose with public pensions, the Christie campaign argued. “Jon Corzine made it easier for his friends from Wall Street to manage New Jersey’s pension fund,” read a campaign press release.

But soon after Christie took the reins as governor, his skepticism of the relationship between Wall Street and pension funds quickly evaporated. Hedge funds managed by influential Republican donors soon landed enormous contracts to manage public pensions. Friends of The Governor benefited handsomely.

As the Investigative Fund’s Lee Fang reports, the controversy centers around Paul Singer, the billionaire founder of Elliott Associates. The month prior to Christie’s first 2009 gubernatorial victory, Singer donated $100,000 to the Republican Governors Association, a fervent supporter of Christie’s election bid. After his election, and despite his campaign rhetoric to the contrary, Christie suggested that Elliot Associates be given a contract to manage $200 million in public pensions. In 2012, the firm was indeed granted the contract.

The result of this investment was large payoffs for the hedge fund, while New Jersey public workers saw their pension returns fall below average. In 2013, the median pension return was 16.1 percent; in New Jersey, the pension program delivered a return of just 11.79 percent.

But because of fines and fees associated with a hedge fund investment, it was a lucrative business for managers like Singer. As Fang reports, Singer benefited greatly from the deal: Chris Tobe, a former trustee of Kentucky Retirement Systems, estimates that in 2013 alone, Elliot Associates collected close to $8.6 million in fees from the New Jersey public pension fund.

And Singer, it seems, is not one to let a favor go unreturned. After Christie became chair of the Republican Governors Association in 2013, Singer donated $1.25 million to the group.

Interestingly, Singer’s profitable deals with politicians do not start and stop with the embattled Governor Christie. A recent report in The Hill shows former Rep. Connie Mack (R-FL) may also have used his office to aid the notable Republican donor. Mack, now a lobbyist, has registered to lobby for American Task Force Argentina, a group that seeks to “hold medium and wealthy nations accountable for the repayment of their debts to U.S. creditors and to uphold U.S. court judgments against these same nations.” Holding impoverished South American nations accountable for their debt to American companies is an initiative Mack touted during his time in office.

As it happens, Elliot Associates is also a member of Task Force Argentina. According to The Hill, employees of Elliot management were the second largest contributor to Mack’s failed 2012 Senate run. Furthermore, another hedge fund linked to Singer is owed $1.6 billion by the Argentine government.

 AFP Photo/Jeff Zelevansky

10 Responses to Christie’s Latest Scandal: How He Sold Public Pensions To Wall Street Donors

  1. What does Qid Pro Quo really mean??? It seems there are some on the Supreme Court in DC who needs a new Miriam Webster instead of a Bible..or a translation from Corruptese into ‘Merikan….

  2. He is, was, and probably always will be a bully, and I still can’t believe the people of this state were stupid enough to re-elect him, never mind all the Democrats and independents elsewhere who talked about how fair and noble he was and how they would vote for him if he ran for president.

    • Don’t count me in on such idiocy, there isn’t a Republican alive today (or in 2016) who should deserve the nation’s highest office.

  3. Christie, a member of the so called establishment GOP, have a disdain for
    public sector pensions, that borders on hatred. Except their own, naturally.
    The first thing about public pensions that really makes their blood boil, is if
    not for public sector pensions, there would be damn few private sector ones. Which would suit them just fine. It wasn’t all that long ago, about half
    of all workers enjoyed some type of employer based retirement plan. But,
    like everything else that has served to buoy, the security of the middle
    class, they just keep hacking away at it, year in, and year out. And will continue to do so I guess, until retirement will finally arrive the day we fall dead at our roadside apple stands, or something. Seriously, if there is a better indicator of the Republican Right’s total disregard for the working people of this troubled Country, than the effort they’ve put in eliminating pensions from the labor landscape. It might be the tax breaks that pay companies to move their operations overseas, or out of the Country.

  4. It looks like Paul Singer really gets around. He’s the guy who partnered with Romney and some other cronies hoping to buy out the auto industry back in 2008/2009 when it was foundering. Romney was the cheer leader egging Bush and then Obama on to let GM and Chrysler go into full bankruptcy; knowing full well that there was no private sector funds available to bail them out which would certainly make them ripe for the pickings.

    When it became obvious that Obama wasn’t going to let GM and Chrysler go under without trying to bail them out first, Singer, Romney and their cohorts set their sights on the auto industry’s largest small parts maker Delphi (was Delco). As GM and Chrysler foundered, Delphi stock collapsed along with them such that Singer and Romney were able to do a leverage buyout at the bargain basement sale price of 67 cents per share (the stock price had been in the twenties).

    Once Singer and Romney had pirated Delphi, they dumped all its 25,000 union jobs and arranged to move small parts production to China; they then sold off Delphi’s assets for millions and pocketed those along with Delphi’s pension funds, dumping the company’s pension liabilities on guess whom – the American taxpayer. One of Singer’s hedge fund buddies bragged later that the buyout was really a sweet deal because they were able to get out from under Delphi’s pension liabilities by foisting them on the taxpayers. But even here, Singer and Romney weren’t satisfied. They had to take one more shot at trying to force GM and Chrysler into bankruptcy, so they tried to accomplish that by refusing to provide them with the small parts they needed in order to restart production.

    Singer, Romney and their cronies are really great Americans – not only were they willing to destroy an American industry but they were willing to do it at a time when America really couldn’t afford to lose more jobs – while America was in the midst of the worst recession it had seen in almost 80 years with job losses rapidly approaching 14 million. Fortunately, the judge overseeing the leverage buyout of Delphi stipulated that the only way he would approve the buyout was if Delphi honored its commitments in providing GM and Chrysler with the small parts they needed to restart auto production.

    And here Singer is in cahoots with Christie in another scheme to get even richer (billions apparently aren’t enough for him), by operating an under performing hedge fund that rakes in more millions while somewhat short changing struggling American workers’ future retirements.

  5. Christie should watch what he says because I believe this statement speaks volumes of his mentality when it comes to these Scandals and his response inquiries. Christie statement at a Town Hall Meeting on 3/13/14: “Said listen I’m a trained Lawyer, what that means I could make up an answer at any time that sounds convincing.”

    • … And that’s just ONE of their on-going felonies. 52 attempts at defunding Obamacare while wondering why their seen as a do-nothing congress.. Listen to them.. they’ve been busy.. 52 attempts.

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