(Adds paragraph about Carlyle no longer using finders in
paragraph 7, byline)
By Megan Davies
NEW YORK, April 19 A firm affiliated with Henry
Morris, the former New York state comptroller's top fundraiser,
was involved with helping investment firms procure pension fund
business in New Mexico as well as New York, a source and one of
the firms said on Sunday.
Last month, Morris and David Loglisci, New York State's
pension investment chief, were charged with taking millions of
dollars in kickbacks from money manager firms. [ID:nN19456890]
Morris, who was associated with Connecticut-based advisory
firm Searle, made over $15 million in purported placement and
finder fees between January 2003 and December 2006, a U.S.
Securities and Exchange Commission complaint said in March.
The scheme is alleged to have centered around the New York
pension fund, but Searle was also used to procure investments
in New Mexico, one firm and a source said on Sunday.
The Carlyle Group [CYL.UL], one of the world's biggest
private equity firms, used Searle in New Mexico a couple of
years ago, a spokesman for Carlyle confirmed. Carlyle has not
been accused of any wrongdoing in connection with the probe.
"We used Searle to obtain an investment from the New Mexico
State Investment Council and disclosed it to them at the time,"
the spokesman said. He added Carlyle only used Searle to obtain
investments from the New York and New Mexico investment funds.
Carlyle stopped using so-called finders or placement agents
when seeking commitments from public pension funds two years
ago, he added.
Private equity firm Quadrangle Group also hired Searle
seeking an investment from the New Mexico fund, a source close
to Quadrangle said. However, although Quadrangle did receive an
investment from the fund, it did not pay Searle a fee, said the
source, who did not want to be identified because the matter
had not been made public.
Quadrangle, which has also not been accused of any
wrongdoing, was co-founded by Steven Rattner, the leader of the
Obama administration's auto task force.
The Wall Street Journal cited a spokesman for the New
Mexico fund saying that Quadrangle and Carlyle used Searle &
Co, to get investments from the government-run fund in New
Mexico. The New Mexico fund was not immediately available for
Separately, Morris or one of his associates placed or tried
to place other investment firms with government-run funds in
California, New Jersey, Connecticut and New York City, the Wall
Street Journal reported, citing person familiar with the
The first criminal charges related to the scheme were
brought last month by New York state attorney general Andrew
Cuomo, who accused Morris and Loglisci with taking
million-dollar kickbacks. The two men, whose lawyers say they
are innocent, also face civil charges from the SEC.
More than 20 investment deals made by the state's pension
fund were "tainted" by the kickbacks, Cuomo said at the time.
(Additional reporting by Jui Chakravorty Das; Editing by