Submitted by Leo Kolivakis, publisher of Pension Pulse.
Earlier this week, Michael Hudson wrote an excellent comment in counterpunch, The Real AIG Conspiracy:
It may seem odd, but the public outrage against $135 million in AIG bonuses is a godsend to Wall Street, AIG scoundrels included. How can the media be so preoccupied with the discovery that there is self-serving greed to be found in the financial sector? Every TV channel and every newspaper in the country, from right to left, have made these bonuses the lead story over the past two days.
What is wrong with this picture? Is there not something over-inflated about the outrage led most vociferously by Senator Charles Schumer and Rep. Barney Frank, the two leading shills for the bank giveaways over the past year? And does Pres. Obama perhaps find it convenient that finally, at long last, he has been able to criticize something that he believes Wall Street has done wrong?
Even the Wall Street Journal has gotten into the act. The government’s takeover of AIG, it pointed out, “uses the firm as a conduit to bail out other institutions.” So much more greed is involved than just that of AIG employees. The firm owed much more to other players – abroad as well as on Wall Street – than the assets it had. That is what drove it to insolvency. And popular opposition has been rising to how Obama and McCain could have banded together to support the bailout that, in retrospect, amounts to trillions and trillions of dollars thrown down the drain. Not really down the drain at all, of course – but given to financial speculators on the winning “smart” side of AIG’s bad financial gambles.
“The Washington crowd wants to focus on bonuses because it aims public anger on private actors,” the Journal accused in a March 17 editorial. But instead of explaining that the shift is away from Wall Street grabbers of a thousand times the amount of bonuses being contested, it blames its usual all-purpose bete noire: Congress. Where the right and left differ is just whom the public should be directing its anger at!
Here’s the problem with all the hoopla over the $135 million in AIG bonuses: This sum is only less than 0.1 per cent – one thousandth – of the $183 BILLION that the U.S. Treasury gave to AIG as a “pass-through” to its counterparties. This sum, over a thousand times the magnitude of the bonuses on which public attention is conveniently being focused by Wall Street promoters, did not stay with AIG. For over six months, the public media and Congressmen have been trying to find out just where this money DID go. Bloomberg brought a lawsuit to find out. Only to be met with a wall of silence.
Until finally, on Sunday night, March 15, the government finally released the details. They were indeed highly embarrassing. The largest recipient turned out to be just what earlier financial reports had rumored: Paulson’s own firm, Goldman Sachs, headed the list. It was owed $13 billion in counterparty claims. Here’s the picture that’s emerging. Last September, Treasury Secretary Paulson, from Goldman Sachs, drew up a terse 3-page memo outlining his bailout proposal. The plan specified that whatever he and other Treasury officials did (thus including his subordinates, also from Goldman Sachs), could not be challenged legally or undone, much less prosecuted. This condition enraged Congress, which rejected the bailout in its first incarnation.
It now looks as if Paulson had good reason to put in a fatal legal clause blocking any clawback of funds given by the Treasury to AIG’s counterparties. This is where public outrage should be focused.
Instead, the leading Congressional shepherds of the bailout legislation – along with Obama, who came out in his final, Friday night presidential debate with McCain strongly in favor of the bailout in Paulson’s awful “short” version – have been highlighting the AIG executives receiving bonuses, not the company’s counterparties.
There are two questions that one always must ask when a political operation is being launched. First, qui bono — who benefits? And second, why now? In my experience, timing almost always is the key to figuring out the dynamics at work.
Regarding qui bono, what does Sen. Schumer, Rep. Frank, Pres. Obama and other Wall Street sponsors gain from this public outcry? For starters, it depicts them as hard taskmasters of the banking and financial sector, not its lobbyists scurrying to execute one giveaway after another. So the AIG kerfuffle has muddied the water about where their political loyalties really lie. It enables them to strike a misleading pose – and hence to pose as “honest brokers” next time they dishonestly give away the next few trillion dollars to their major sponsors and campaign contributors.
Regarding the timing, I think I have answered that above. The uproar about AIG bonuses has effectively distracted attention from the AIG counterparties who received the $183 billion in Treasury giveaways. The “final” sum to be given to its counterparties has been rumored to be $250 billion, do Sen. Schumer, Rep. Frank and Pres. Obama still have a lot more work to do for Wall Street in the coming year or so.
To succeed in this work – while mitigating the public outrage already rising against the bad bailouts – they need to strike precisely the pose that they’re striking now. It is an exercise in deception.
The moral should be: The larger the crocodile tears shed over giving bonuses to AIG individuals (who seem to be largely on the healthy, bona fide insurance side of AIG’s business, not its hedge-fund Ponzi-scheme racket), the more they will distract public attention from the $180 billion giveaway, and the better they can position themselves to give away yet more government money (Treasury bonds and Federal Reserve deposits) to their favorite financial charities.
Let’s go after the REAL money given to AIG – the $183 billion! I realize that this has already been paid out, and we can’t get it back from the counterparties who knew that Alan Greenspan and George Bush and Hank Paulson were steering the U.S. economy off a real estate cliff, a derivatives cliff and a balance-of-payments cliff all wrapped up into one by betting against collateralized debt obligations (CDOs) and insuring these casino bets with AIG. That money has been siphoned off from the Treasury fair and square, by putting their own proxies in the key government slots, the better to serve them.
So let’s go after them altogether. Sen. Schumer said to the AIG bonus recipients that the I.R.S. can go after them and get the money back one way or another. And it can indeed go after the $183-billion bailout recipients. All it has to do is re-instate the estate tax and raise the marginal income and wealth-tax rates to the (already reduced) Clinton-era levels.
The money can be recovered. And that’s just what Mr. Schumer, Mr. Frank and others don’t want to see the public discussing. That’s why they’ve diverted attention onto this trivia. It’s the time-honored way to get people not to talk about the big picture and what’s really important.
In response to the above article, Paul Craig Roberts asks, Was the Bailout Itself a Scam?:
Professor Michael Hudson (CounterPunch, March 18) is correct that the orchestrated outrage over the $165 million AIG bonuses is a diversion from the thousand times greater theft from taxpayers of the approximately $200 billion “bailout” of AIG. Nevertheless, it is a diversion that serves an important purpose. It has taught an inattentive American public that the elites run the government in their own private interests.
Americans are angry that AIG executives are paying themselves millions of dollars in bonuses after having cost the taxpayers an exorbitant sum. Senator Charles Grassley put a proper face on the anger when he suggested that the AIG executives “follow the Japanese example and resign or go commit suicide.”
Yet, Obama’s White House economist, Larry Summers, on whose watch as Treasury Secretary in the Clinton administration financial deregulation got out of control, invoked the “sanctity of contracts” in defense of the AIG bonuses.
But the Obama administration does not regard other contracts as sacred. Specifically: labor unions had to agree to give-backs in order for the auto companies to obtain federal help; CNN reports that “Veterans Affairs Secretary Eric Shinseki confirmed Tuesday [March 10] that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance”; the Washington Post reports that the Obama team has set its sights on downsizing Social Security and Medicare.
According to the Post, Obama said that “it is impossible to separate the country’s financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government.”
After Washington’s trillion dollar bank bailouts and trillion dollar gratuitous wars for the sake of the military industry’s profits and Israeli territorial expansion, there is no money for Social Security and Medicare.
The US government breaks its contracts with US citizens on a daily basis, but AIG’s bonus contracts are sacrosanct. The Social Security contract was broken when the government decided to tax 85% of the benefits. It was broken again when the Clinton administration rigged the inflation measure in order to beat retirees out of their cost-of-living adjustments. To have any real Medicare coverage, a person has to give up part of his Social Security check to pay Medicare Part B premium and then take out a private supplemental policy. The true cost of Medicare to beneficiaries is about $6,000 annually in premiums, plus deductibles and the Medicare tax if the person is still earning.
Treasury Secretary Geithner, the fox in charge of the hen house, has resolved the problem for us. He is going to withhold $165 million (the amount of the AIG bonuses) from the next taxpayer payment to AIG of $30,000 million. If someone handed you $30,000 dollars, would you mind if they held back $165?
PR flaks have rechristened the bonus payments “retention payments” necessary if AIG is to retain crucial employees. This lie was shot down by New York Attorney General Andrew Cuomo, who informed the House Committee on Financial Services that the payments went to members of AIG’s Financial Products subsidiary, “the unit of AIG that was principally responsible for the firm’s meltdown.” As for retention, Cuomo pointed out that ”numerous individuals who received large ‘retention’ bonuses are no longer at the firm” .
Eliot Spitzer, the former New York Governor who was set-up in a sex scandal to prevent him investigating Wall Street’s financial gangsterism, pointed out on March 17 that the real scandal is the billions of taxpayer dollars paid to the counterparties of AIG’s financial deals. These payments, Spitzer writes, are “a way to hide an enormous second round of cash to the same group that had received TARP money already.”
Goldman Sachs, for example, had already received a taxpayer cash infusion of $25 billion and was sitting on more than $100 billion in cash when the Wall Street firm received another $13 billion via the AIG bailout.
Moreover, in my opinion, most of the billions of dollars in AIG counter-party payments were unnecessary. They represent gravy paid to firms that had made risk-free bets, the non-payment of which constituted no threat to financial solvency.
Spitzer identifies a conflict of interest that could possibly be criminal self-dealing. According to reports, the AIG bailout decision involved Bush Treasury Secretary Henry Paulson, formerly of Goldman Sachs, Goldman Sachs CEO Lloyd Blankfein, Fed Chairman Ben Bernanke, and Timothy Geithner, former New York Federal Reserve president and currently Secretary of the Treasury. No doubt the incestuous relationships are the reason the original bailout deal had no oversight or transparency.
The Bush/Obama bailouts require serious investigation. Were these bailouts necessary, or were they a scam, like “weapons of mass destruction,” used to advance a private agenda behind a wall of fear? Recently I heard Harvard Law professor Elizabeth Warren, a member of a congressional bailout oversight panel, say on NPR that the US has far too many banks. Out of the financial crisis, she said, should come consolidation with the financial sector consisting of a few mega-banks. Was the whole point of the bailout to supply taxpayer money for a program of financial concentration?
I am not sure about the final argument Mr. Roberts is trying to make. In Canada, we have six major banks and we did not see anywhere near the shenanigans that we saw down south. The banks do get criticized for keeping their fees high, but they are better regulated here than in the United States and their leverage ratios never reached dangerous levels.
Mr. Roberts is correct that the bailouts benefited AIG’s counterparties, especially Goldman Sachs. Let’s not forget that Hank Paulson, the former Treasury Secretary, was also the chairman and CEO of Goldman Sachs before landing the top economic post in the Bush administration.
But the Mother of all scams happened way before AIG, GM, Citigroup and others received bailout funds. That’s right, now that the alternative investment bubble has popped, the end of the great pension con job has exposed the pension Ponzi scheme that dwarfs the Madoff scam.
For years, Goldman Sachs and other investment banks, hedge funds, private equity funds and real estate funds received billions in fees from pension funds chasing “alpha”. The marketing ploys were sophisticated as they kept touting “absolute returns that are not correlated to stocks and bonds”.
The investment banks and private funds made a killing in fees but the for the most part, pensions got suckered into believing the garbage pension consultants were feeding them, exposing them to some serious downside risk. And don’t kid yourself, the collective actions of pensions funds shoving billions of dollars into alternative investments contributed to this systemic crisis we are now living.
So why did senior pension fund managers allocate so aggressively into alternative investments? One big reason, which I have repeatedly stated in this blog is that they could muck around with the benchmarks in these investments, allowing them to reap huge bonuses based on bogus benchmarks.
As if this wasn’t bad enough, late this week we learned that big-name private equity and hedge funds are at the center of criminal charges filed against associates of former New York Comptroller Alan Hevesi, although none of those firms is charged with wrongdoing in the current indictment:
Named in the complaint are, among others, private equity giant Carlyle Group, a hedge fund and a private equity fund run by Art Samberg’s Pequot Capital Management, the HFV multi-strategy (subscription required)
One of those associates to Mr. Hevesi, a political consultant called Hank Morris, was arrested this week on charges of kickbacks:
First the background: We already knew that certain investment companies looking to do business placing funds for the state pension system paid scads of money in fees to firms connected to political consultant Hank Morris.
Morris’ political consulting clients have included U.S. Sen. Charles Schumer and, at one time, Tom DiNapoli, who subsequently became comptroller.
But Morris’ closest political tie was to Comptroller Alan Hevesi, the Democrat ousted from statewide office for misusing state resources, to which he pleaded to avoid jail time. The state comptroller is the sole trustee of the state pension funds.
And the news: Morris, escorted after his arrest, who was never on the official state payroll, was indicted in a case brought by Attorney General Andrew Cuomo and tens of millions of dollars in those fees now officially have been called kickbacks.
Morris, 55, faces a 123-count grand jury indictment. He was arraigned in State Supreme Court, Manhattan, where he pleaded not guilty and was released on the condition he’d post $1 million bail.
In addition, Morris has a co-defendant: David Loglisci, who was the top investment officer of the pension fund, charged with official misconduct, falsifying records and fraud. He’s out on $350,000 bail.
Nobody is surprised. After nearly two years of suspense and speculation, the charges are public and the matter is in court. Cuomo indicates that there is more to come.
Morris has deep Long Island ties. He was raised in Westbury and worked on campaigns for former Suffolk County Executive Patrick Halpin, Long Island Power Authority Chairman Richard Kessel, and Bruce Nyman, now an aide to Nassau County Executive Tom Suozzi.
In 2001, Morris advised DiNapoli, then a state assemblyman from Great Neck, in his failed primary for county executive against Suozzi.
According to the Times of London, the kickback deals included the Carlyle Group:
Two men allegedly pocketed $30 million in kickbacks for steering investments by the $122 billion New York state pension fund to managers including Carlyle Group, one of the world’s biggest private equity firms.
David Loglisci, former chief investment officer to the pension fund, and Henry Morris, a so-called fund-finder, were charged with 123 criminal counts including bribery, money laundering, grand larceny and securities fraud.
The Securities and Exchange Commission (SEC) brought a parallel series of civil complaints alleging securities fraud against the men, who have pled not guilty to all charges against them.
Other senior State officials are expected to face charges over their involved in the scam.
The arrests were the culmination of a two-year joint investigation by the SEC and Andrew Cuomo, the New York Attorney General who is winning plaudits for his determination to expose fraud on Wall Street.
“Over one million New Yorkers and their families who are the beneficiaries of this fund deserve to have their hard-earned retirement accounts kept free from politically-driven investments and personal agendas,” Mr Cuomo said yesterday.
“Mixing politics, self-dealing, kickbacks and billions in taxpayer funds is nothing short of the perfect public integrity storm.”
If convicted, Mr Morris faces 340 years in prison and Mr Loglisci 193 years.
Allegations in the colourful case include Mr Loglisci’s use of the giant pension fund’s power to induce a private equity boss to invest $100,000 in a low budget film called Chooch produced by Mr Loglisci’s brother. Another private equity investor was allegedly induced to arrange a contract to distribute a DVD of the movie.
Meanwhile, Mr Morris is accused of paying thousands of dollars in rent for a luxury Manhattan apartment inhabited by a girlfriend of an unnamed official close to the pension fund.
Between 2004 and 2007 Mr Logisci, a former banker, was chief investment officer at the office of State Comptroller Alan Hevesi’s office. Mr Hevesi was the sole administrator of the state’s pension fund, which is the third biggest in the country. Between 2003 and 2006, investment houses including Carlyle innocently paid Mr Morris and his companies to find investors keen to entrust money to their funds.
Mr Morris pretended that he was attracting the New York State pension fund to these funds, charging the investment specialists millions of dollars in “placement fees”.
Mr Cuomo said that Carlyle alone paid Mr Morris more than $13 million in return for attracting $730 million in investments from the pension fund.
The Attorney General alleges that Mr Morris paid off Mr Loglisci and other high-level Government officials with thousands of dollars worth of gifts and favours in return for steering the State pension fund to investors that secured his fund-finding services.
More than 20 investments made by the fund were corrupted by their actions, Mr Cuomo said.
Mr Morris’s attorney said that the fund made at least hundreds of billions of dollars from the investments introduced to it by Mr Morris. “There was no fraud and no corruption,” William Schwartz, the fund-finder’s attorney said.
Mr Hevesi resigned in 2007 after pleading guilty in a separate case to charges that he misused state drivers to chauffeur his ill wife.
Caryle said that it had fully co-operated with Mr Cuomo’s investigation, of which it was not a target.
Let me be crystal clear so that the FBI, RCMP and all other police bodies finally wake up and smell the coffee. This case is not an exception. There are more scams going on at public pension funds involving kickbacks from private funds to pension officers and to pension consultants.
Last month, the FBI arrested men linked to $339 million of frozen Iowa pension money:
Two investment managers linked to $339 million in frozen assets of the Iowa Public Employees’ Retirement System were arrested today by the FBI on securities fraud charges, federal authorities said.
Paul Greenwood, 61, of North Salem, N.Y., and Stephen Walsh, 64, of Sands Point, N.Y., were taken into custody and were expected to appear in Manhattan Federal Court this afternoon. Court papers identified Greenwood and Walsh as the owners of Greenwich, Conn.-based WG Trading Co. LP and Westridge Capital Management Inc., based in Santa Barbara, Calif.
Donna Mueller, IPERS’s chief executive officer, issued a statement today saying she was encouraged by the arrests.
“This is an indication that regulators moved quickly to address suspicions and are acting on our behalf,” Mueller said.
The arrests come days after the Iowa Public Employees’ Retirement System reported that $339 million in Iowa pension funds have been frozen following the suspension of Greenwood and Walsh’s trading privileges by the National Futures Association, which had been attempting to audit WG Trading.
The Iowa pension fund has terminated its contract with Westridge Capital Management and is seeking a return of its assets. Westridge had completed transactions through WG Trading
From at least 1996 through February 2009, Greenwood and Walsh ran a fraudulent commodities trading and investment advisory scheme using WG Trading Company, said Lev Dassin, acting U.S. attorney for the Southern District of New York. They promised to invest the money in a program called “enhanced stock indexing,” which they said was a conservative trading strategy that had outperformed the results of the S&P 500 Index for more than 10 years.
Several institutional investors, including charitable and university foundations, retirement and pension plans – invested more than $668 million through WG Trading Investors, receiving in exchange promissory notes that the defendants claimed would pay interest at a rate equal to the investment returns earned by the enhanced stock indexing strategy.
“Contrary to their representations to their investors, Greenwood and Walsh misappropriated the majority of the investor funds. According to a complaint, they covered up the theft by manufacturing promissory notes to present the appearance that investors’ money had been loaned to them.
These promissory notes totaled about $293 million for Greenwood and about $261 million for Walsh, authorities said.
More than $161 million was allegedly used for Walsh and Greenwood’s personal expenses, including purchasing rare books, horses, Steiff teddy bears costing as much as $80,000, and a $3 million residence for Walsh’s ex-wife, federal officials said.
Efforts are ongoing to account for and locate investors’ funds, authorities said.
The New York Daily News reported today that Greenwood and Walsh were part of a “Gang of Four” that owned the New York Islanders’ hockey team during some bleak years in the early 1990s, following a string of Stanley Cup championships a decade earlier.
Last week, the University of Pittsburgh and Carnegie Mellon University sued Westridge Capital Management, seeking the return of $114 million.
The U.S. Commodity Futures Trading Commission said today it is seeking a restraining order freezing the defendant’s assets and preserving records.
Stephen Obie, the CFTC’s acting director of enforcement issued a statement: “The coordinated acts of multiple federal regulators resulted in uncovering and ending this egregious fraud. Defendants treated investor money – some of which came from a public pension fund – as their own piggy bank to lavish themselves with expensive gifts. The public can rest assured that their nation’s commodity futures regulator is pursuing every avenue to locate and eliminate crooked commodity professionals.”
[Note: Click this link to watch video of a discussion between IPERS CEO Donna Mueller, IPERS board chairman David Creighton and Register reporter William Petroski about the status of IPERS.]
Hedgefund.net reported that Wilshire Associates and Mercer were two of the advisers who recommended to clients that they invest with Westridge Capital Management:
Wilshire Associates was an investment advisor to the Iowa Public Employees’ Retirement System, which put $339 million into Westridge, according to a statement from the pension fund. A spokeswoman for Wilshire had not responded to e-mailed questions by press time.
California’s Sacramento County Employees’ Retirement (SCERS) system had about $52 million in Westridge, although it had managed to pull $5 million out before the arrests, the pension fund said in a statement. Mercer was the outside investment consultant for SCERS. A spokesman for Mercer said the firm has a policy of not commenting on individual client accounts.
Another firm recommending Westridge to clients was Cambridge Associates, however, a spokeswoman for the firm said that out of its 900 clients only one private client had a small investment in Westridge.
Besides the public pension funds, Carnegie Mellon University and the University of Pittsburgh have sued Westridge over money they invested in the fund. Carnegie Mellon alleged in court documents that it invested more than $49 million, while the University of Pittsburgh claimed it invested more than $65 million.
The case against WG Trading was sparked by a lawsuit against hedge fund manager Mark Bloom, who was also arrested Feb. 25. Bloom was charged fraud. Prosecutors claimed Bloom put money from his funds-of-funds firm North Hills into a fraudulent hedge fund as well as using the money to line his own pockets.
The Alexander Dawson Foundation, which supports schools in Nevada and Colorado, sued Bloom in New York state court in early December claiming that it had entrusted $13.5 million to Bloom, but that the money manager had only given it back some of its money. The foundation claimed it was out more than $8.5 million because of the fraud, according to court documents.
When the National Futures Association got wind of the lawsuit it started to investigate, according to a Bloomberg report. The investigation led it to WG Trading, where Bloom had once worked.
When Bloom and WG Trading principals Greenwood and Walsh didn’t cooperate, the NFA notified authorities. The FBI got involved and the three men were charged and arrested.
Attorneys representing Greenwood and Walsh in the criminal case could not be immediately reached for comment. Bloom did not return a call left at his home by HedgeFund.net. Bloom’s attorney said he had no comment.
The Chicago Tribune reports on yet another pension probe where millions were invested with DV Urban Realty Partners, a firm with ties to Chicago mayor Richard Daley:
City Hall’s inspector general has begun investigating how at least three city pension funds came to make investments with a firm co-owned by a nephew of Mayor Richard Daley, the Tribune has learned.
The office of Inspector General David Hoffman has subpoenaed records from the pension funds dealing with their investments of tens of millions of dollars in DV Urban Realty Partners, a real estate investment firm formed by a top Daley ally, Allison Davis, and Daley nephew Robert Vanecko.
The inspector general requested records on those investments from the funds for municipal employees, police and laborers, according to a source. The pension funds have paid the investment group hundreds of thousands of dollars in management or consulting fees.
Hoffman’s investigators are seeking details on the property DV Urban Realty acquired using the pension funds’ money, according to a subpoena obtained by the Tribune.
The inspector general’s office also subpoenaed information that the pension funds’ trustees reviewed before investing with DV Urban Realty, suggesting investigators are trying to learn how the decisions were made and whether they were influenced by Vanecko’s relationship with the mayor, the source said.
Davis and Vanecko could not be reached. Hoffman declined to comment.
Davis and Vanecko began DV Urban Realty to do development projects in neglected areas.
Vanecko’s city business ties were an issue in late 2007, when it was reported that he and Daley’s son, Patrick, had obtained a stake in a sewer business that had contracts with the city. The company failed to disclose Daley and Vanecko’s ownership interest in economic disclosure statements filed with the city, as required by city ordinance.
Police pension fund executive director John Gallagher said that DV Urban Realty so far had drawn $5 million on the fund’s original $15 million commitment; as of the end of last year, that $5 million investment was valued at $3.5 million. He declined further comment.
Terrance Stefanski, executive director of the Municipal Employees’ Annuity and Benefit Fund, declined to comment, as did Fred Heiss, general counsel of the Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund. The two declined to disclose how much the funds had committed to DV Urban Realty. The Municipal Employees’ pension paid $225,000 in management fees in 2007.
The city teachers’ pension fund paid more than $300,000 in management fees to DV Urban Realty in 2007, the fund’s annual report states. But it’s unclear if the inspector general subpoenaed its records. Kevin Huber, the fund’s executive director, could not be reached.
All these cases prove to me that public (and private) pension funds should be subjected to rigorous independent forensic fraud examinations by certified fraud examiners (CFEs). I have witnessed shady activities at public pension funds and I am telling you, it is very easy for senior pension fund managers to enrich themselves by recommending to invest millions in a fund or in some investment product or even a back office or risk system. Trust nobody, including those with fancy degrees and industry accreditation, and audit everything down to the last penny!
Yes folks, this scam has been happening all along, building up over many years. It involved alternative investments, allowing private funds to collect exorbitant fees and senior pension fund managers to collect huge bonuses based on bogus benchmarks.
Worse still, some pension fund managers and pension consultants criminally profited from these investments by accepting kickbacks from investment managers. So while you’re focused AIG and all the other smoke and mirrors, the Mother of all stealth scams is happening right under your noses using your pension contributions.