Governor Christie Faces Ethical Issues Over State Pension Fund
The Inquisitr has revealed that Chris Christie will have to deal with ethical issues surrounding the management of the state pension fund.
In a complex web of conflict of interest, Christie’s appointed Chairman of the New Jersey State Investment Council, Robert Grady, seems to have violated the state’s ethics standards.
The International Business Times on Monday reported that Robert Grady has been investing funds from the state pension fund in a private equity firm in which his company, Cheyenne Capital, has interest.
The New Jersey Division of Investment announced back in December 2011 that it would be investing $50 million in private equity firm, Blackstone Capital Partners VI. The move was spearheaded by Grady who from the onset has been intent on investing a substantial amount of the state pension fund in Blackstone.
This is all well and good as it is the prerogative of the investment council to make financial investments as it sees fit.
The slight of hand in these Blackstone investments arises in Cheyenne Capital’s private equity report. The report reveals that in 2011 the firm invested $2.69 million in Blackstone.
The conflict of interest is clear as day. Grady is listed as a managing director on Cheyenne Capital’s website and he has disclosed his ownership stake in the firm on state financial disclosure forms.
The New Jersey ethics standard explicitly prohibits conflicts of interest such as these.
“As a State officer or employee or special State officer or employee, you are prohibited from acting in your official capacity in any matter in which you have a direct or indirect personal or financial interest that might be expected to impair your objectivity or independence of judgment. As a practical matter,this means that you should not participate, even informally, on a matter in which you have a personal or financial interest.”
According to Salon, the state pension fund has been a sore point for Christie after he cut payments to the fund to address a budget shortfall.
Governor Christie could be implicated if his statements that the council does not choose the places where the fund’s money is invested proves true. Christie, at a press conference last week, was quoted as saying, “they set out categories of the way they want to see it done, and then professionals that we hire, both in the Department of Treasury and outside, have made those choices.”
This admission means that Christie knew of the conflict of interest violation that Grady faces through the investments.
Christie and Grady are longtime friends.
[Photo Credit: AP/Mark Humphrey]