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Political Payback; Cash Kickback

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Saul Meyer had a couple of reasons to keep Richardson administration insiders Anthony and Marc Correra happy.

Meyer’s company, Aldus Equity Advisors of Dallas, was making $1.6 million a year to give advice on private equity deals to New Mexico’s State Investment Council and Educational Retirement Board. Meyer believed that keeping the Correras happy was key to keeping that lucrative deal.

On top of that, he admitted taking a $10,000 cash kickback from Marc Correra in return for pushing ERB investment business his way — deals for which Marc Correra made millions of dollars in fees.

An amended lawsuit filed Friday by the ERB, which manages New Mexico’s $9.5 billion teacher pension fund, adds new details to the web of alleged corrupt dealings tied to state investment money. Defendants include Aldus Equity, Meyer, Marc Correra and Deutsche Bank.

The ERB lawsuit alleges Aldus made recommendations intended to enrich Correra at the expense of the company’s client in order to garner the benefits of Correra’s “political influence.”

“Aldus believed that Correra’s influence was in large part responsible for Aldus being selected as ERB’s private equity consultant, and believed that Correra and his father, Anthony Correra, wielded considerable sway over both former State Investment Officer (and ERB board member) Gary Bland and former Governor Bill Richardson,” the lawsuit alleges.

Marc and Anthony Correra have been at the center of the controversy over alleged pay-to-play practices involving state investments.

Anthony Correra, a former New York stockbroker who surrendered his license to resolve an insider trading case, was a close friend and adviser of Richardson, whose two terms as New Mexico governor ran from 2003 through 2010, and was instrumental in the appointment of Gary Bland as state investment officer.

Anthony Correra also lent then-ERB Chairman Bruce Malott $360,000 and arranged to secure a line of credit up to $720,000 for a Las Cruces business owned by former Richardson chief of staff and campaign manager David Contarino and his wife.

Meanwhile, Marc Correra shared in more than $22 million worth of fees paid to him by companies that were awarded business by the State Investment Council and the ERB.

Those transactions are the focus of civil lawsuits, along with criminal and regulatory investigations.

The amended complaint filed Friday by the ERB is the latest legal development in the scandal and claims Meyer admitted taking the cash from Correra in a tape-recorded telephone conversation with another member of his firm.

Meyer has pleaded guilty to a felony charge in a pension fund investment scandal in New York and is awaiting sentencing. As part of his plea deal, he promised to cooperate in New Mexico investigations.

Deutsche Bank bought controlling interest in Aldus in 2007. The court filing alleges Meyer was actually kicked out of the firm by his partners but was reinstated at the insistence of Deutsche Bank officials.

The ERB lawsuit claims Deutsche Bank promised the junior partners it would conduct its own investigation into whether Meyer had been engaging in improper activities.

But Deutsche Bank never investigated Meyer, the lawsuit alleges, and the bank’s controlling interest did not stop him from recommending seven investments involving Marc Correra as a placement agent.

The ERB claims Deutsche Bank adopted the Aldus and Meyer business model “of buying political influence.”

The Educational Retirement Board was briefed on the amended lawsuit Friday during a closed executive session by Albuquerque attorney Joseph Goldberg, who filed the lawsuit.

Foy lawsuits

Although the lawsuit doesn’t mention him by name, it references former ERB Chief Investment Officer Frank Foy’s well-documented fight to keep Deutsche Bank from paying placement agent fees.

In a separate incident, cited in the lawsuit, a Deutsche Bank hedge fund was scheduled to receive $250 million investment from ERB.

Foy would not wire the money until the bank’s hedge fund agreed not to pay a placement agent fee to a company later linked to Marc Correra.

Foy has filed two lawsuits alleging pay-to-play schemes in the state’s investment practices at the SIC and ERB.

The SIC has filed its own lawsuit and is seeking to dismiss portions of Foy’s lawsuits.

In open session Friday, the board heard from Foy and his attorney, Victor Marshall, about the status of their two lawsuits.

Marshall asked the ERB to stay out of “this dogfight” with the SIC and asked to work with the current board in pursuing Foy’s lawsuits.

ERB Chief Counsel Chris Schatzman said he didn’t think the ERB would seek to dismiss Foy’s claims in the near future — as the SIC has done — but wouldn’t rule it out.

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