isn't going away.
Law firms in Albuquerque, New York City and Washington, DC have
joined to file a class-action lawsuit
against former New Mexico Investment Officer
and members of the Educational Retirement Board who participated in alleged
pay-to-play schemes
involving two out of state firms, Vanderbilt Capital and Aldus Equity.
The lead plaintiff, an ERB beneficiary and
records tech at New Mexico State University
named Donna J Hill, is among approximately
95,000 former educators who lost out
when ERB trustees approved bad investments for political reasons, according to the lawsuit. The Vanderbilt investment alone lost pensioners
at least $40 million
.
The claims echo those made in former ERB employee
, a separate matter, but take the form of a class action. The new lawsuit takes advantage of cryptic statements made by Aldus Equity agent Saul Meyer when he pleaded guilty in a pay to play case in New York. In so doing, he admitted to corrupt activities in New Mexico.
"My law firm has spent quite a bit of time looking at the public pension fund situation nationally, and we spent quite a bit of time studying the situation in New Mexico," DC-based
Jonathan W Cuneo tells SFR.'
When it comes to corrupt practices in public investments,
"I certainly think New Mexico's not alone," Cuneo says.
In addition to "reasonable" attorneys' fees, the claim seeks a judicial injunction against political contributions by companies doing business with the ERB, as well as:
Cuneo's firm is joined by The Rowe Law Firm in Albuquerque and Greenfield & Goodman, LLC, in New York City. The lawsuit was filed in the First Judicial District Court on Jan. 5; it looks like Courthouse News Service
this morning. The case has been assigned to
new District Judge Sarah Singleton
.
Cuneo says the case was filed in state rather than federal court for jurisdictional reasons.
The list of defendants includes agents of Vanderbilt and Aldus, as well officials with the ERB and State Investment Council.
The defendants (minus a number of John Does) are: Pioneer Investment Management,
, Gary Bland, Veronica Garcia, Douglas M Brown, Patrick A Livney, Osbert M Hood, Stephen C Bernhardt, Kurt W Florian Jr, Anthony J Koenig Jr, Mark E Bradley, Ron D Kessinger, Robert P Nault James R Stern, New England Pension Consultants, Aldus Equity, Saul Meyer, Vanderbilt Capital Advisors, Vanderbilt Financial and Vanderbilt Financial Trust.
Cuneo tells SFR that pension scandals haven't gotten the attention they deserve
—but that could change soon.
"The investments themselves are opaque. The process is bureaucratic.
It's mysterious. It's little understood
. There is not a great public perception of what a problem this is," Cuneo says. "Having said that, there was an article in the FT recently that suggested public pension shortfalls across the country—which are of course not all due to pay to play—are going to be pretty substantial."
Indeed, the deficits could total $2 trillion
, according to
.
"If the state pension funds cannot meet their obligations, that would mean our friends and neighbors wouldn't have the same money to spend," Cuneo says.
On Jan. 11, the
and the
brought word that a consulting firm hired to analyze the State Investment Council has concluded that the governor has too much power over investment decisions.
.
