NY Reaches another Settlement in Pay-to-Play Probe

September 17, 2010 (PLANSPONSOR.com) - Attorney General Andrew M. Cuomo announced an agreement with former comptroller Alan Hevesi and fundraiser and unlicensed placement agent William “Bill” White in his ongoing public pension fund investigation.

Under the agreement, White will pay $1 million to New York state and will comply with the Attorney General’s Public Pension Fund Reform Code of Conduct, which bans the use of placement agents and campaign contributions related to public pension fund business.    

According to a news release from Cuomo’s office, White brokered investments worth several hundred million dollars from the New York State Common Retirement Fund (CRF) on behalf of firms that paid him hundreds of thousands of dollars in fees.  White did not have the required license to broker the deals.  

After obtaining one of these deals, White personally contributed and bundled contributions to (former) Comptroller (Alan) Hevesi’s campaign from the principals of one of the firms.     

Specifically, the investigation by the Attorney General’s office found:  

  • White brokered deals involving several New York public pension fund investments without having a securities license as required by state and federal law.   
  • White brokered several deals totaling $500 million in investments by the CRF in the Guggenheim Partners Select State Fund, L.P., for which White secretly received in excess of $570,000 in fees. 
  • Guggenheim hired broker-dealers Ariane Capital and Pali Capital to obtain an investment from CRF. However, Guggenheim refused to do business with White, who was affiliated with Ariane, because he lacked a securities license.  Pali Capital filed a disclosure letter with the CRF which did not include White’s role. 
  • In the fall of 2006, White gave $10,000 himself and bundled $50,000 in campaign contributions from two Guggenheim principals to Hevesi’s reelection campaign, after the initial investments had been made.   
  • White received other fees in connection with New York public pension fund investments in the Cypress Grove International Fund and Palladium Equity Partners III, L.P.  These fees were received at various times, both before and after White obtained a securities license. 
  • White also received consulting fees in connection with a pension fund investment in a Fisher Brothers fund – the City Investment Fund, L.P. – but he did not broker that investment. 


To date, Cuomo’s investigation has garnered $138 million in recoveries for the state through agreements with fifteen firms and two individuals, as well as six guilty pleas (see Cuomo Garners Five Pension Probe Settlements).