Today, Senator Morahan flanked by his colleagues in the Assembly joined Attorney General Andrew M. Cuomo and other elected officials to announce new, bipartisan legislation that would replace the sole trustee at the New York State Common Retirement Fund with a board of trustees and eliminate pay to play in state public pension funds.
The new legislation, entitled, “Taxpayers’ Reform for Upholding Security and Transparency” (“T.R.U.S.T.”) would institutionalize Attorney General Cuomo’s Public Pension Fund Reform Code of Conduct, announced earlier this year, and provide additional civil, criminal and administrative penalties and sanctions to ensure firms and individuals are held accountable for violations of the new law.
The Common Retirement Fund, last valued at $116.5 billion, is the state’s largest pool of money.
The Attorney General has made a good point in noting that for decades, the State pension fund has been weakened and corrupted by the sole trustee model, and that this model has allowed pay-to-play to flourish in a system meant to protect the retirement accounts of thousands of hard-working public employees. To put it simply - the model doesn't work. It’s about as sensible as having a single lock on Fort Knox. This new legislation will ensure that the fate of our public retirement fund isn’t decided by one individual, and that the entire system is rid of the kind of pay-to-play that infected and derailed it in the first place.”
Attorney General Cuomo’s investigation has revealed numerous incidents of abuse in the current system and it is imperative that we join together to protect residents of New York State from any future corruption and fraud. The legislation he is introducing today will serve as a great starting point towards restoring the integrity that the taxpayer’s public dollars deserve and rebuild the system to protect the investment of our retirees. I look forward to working with him as we move forward with this important issue and putting together the pension system reforms that will find support on both sides of the aisle in the Senate and the Assembly.
The legislation would increase the rigor, integrity and transparency of the investment process by eliminating campaign contributions by firms investing public pension money and banning the use of intermediaries paid to open the door to public pension fund investments. The legislation would also strengthen enforcement by adding misdemeanor and felony provisions and authorizing the Attorney General to commence civil actions to enjoin ongoing violations and impose civil penalties.
This important pension reform proposal stems from a two-year, ongoing investigation into corruption involving the New York State Comptroller’s Office and the CRF, conducted by Attorney General Cuomo’s Office. The charges to date allege a complex criminal scheme involving numerous individuals operating at the highest political and governmental levels under former Comptroller Alan Hevesi, in which the New York state pension fund was used as a piggy bank for the Comptroller’s chief political aide and a favor bank for political allies and other friends.