A firm that employees Gov. Chris Christie’s wife, first lady Mary Pat Christie, has continued to receive hundreds of thousands of dollars from the state of New Jersey years after state officials said its investment in the company was terminated, according to a new report in International Business Times.
New Jersey’s pension system terminated a $150 million investment in a fund called Angelo, Gordon & Co. in 2011, according to the report, but continues to make payments and hold an “illiquid” investment in the firm.
And in 2012, just a year after officials ordered the withdrawal of the funds, the company hired Mary Pat Christie as a managing director, a position which pays her $475,000 a year, according to the governor’s most recent tax return.
“Pension overseers and financial experts characterized the appearance of the arrangement as deeply troubling,” the report reads. “They saw it as symptomatic of a lack of transparency plaguing the management of public pension funds at a time when states and municipalities are entrusting increasingly hefty sums (and paying substantial fees) to Wall Street managers.”
The report quotes Tom Bruno, the chairman of the board of trustees of one of New Jersey’s three major pension funds, calling the arrangement “extremely problematic.” He added that Christie “talks about what he is supposedly doing to help the pension system, but the possibility of him and his family deriving any kind of personal benefit from a deal like this raises some truly serious ethical red flags.”
The report also states that under Christie, fees paid by the state to financial firms have more than tripled to almost $400 million a year, including the fees paid to Mary Pat Christie’s firm, and that firm executives at Angelo Gordon have made more than a quarter-million dollars worth of donations to Republican candidates and groups since 2009.
The news comes on the heels of other recent revelations of alleged mismanagement of the state’s beleaguered pension and benefit system, currently suffering from billions in unfunded liabilities, at the hands of New Jersey officials. In August, IBT reported that the state had awarded lucrative pension management contracts to hedge fund, private equity, venture capital and other so-called “alternative investment” firms whose executives made campaign contributions to Christie’s campaign, his state party, the Christie-led Republican Governors Association and the Republican National Committee.
That news was followed quickly by the resignation of Robert Grady, the private equity executive and Christie ally who chaired the New Jersey State Investment Council and oversaw its investments.
Responding to the report, Christie spokesperson Kevin Roberts disputed the timing and the state’s current involvement with Angelo Gordon.
“The facts of New Jersey’s former investment with Angelo Gordon is a straightforward matter of public record,” Roberts said in a statement. “The original investment agreement was made back in 2006 under Governor Corzine and the Christie Administration made the decision to end the investment in 2011, almost a year prior to Mary Pat Christie joining the firm (she did not begin working at Angelo Gordon until September 2012).”
In addition, the governor’s office noted that in 2012, after the state ended its investment with the firm, management fees and bonuses paid to Angelo Gordon dropped by over 89 percent, from nearly $2.5 million to less than $260,000.