New York City Comptroller William C. Thompson, Jr. will ask the New York City Pension Funds to adopt the principles in New York State Attorney General Andrew M. Cuomo’s Code of Conduct to further strengthen transparency and eliminate conflicts-of-interest in investments.

 “I have carefully reviewed the Attorney General’s Code of Conduct that was recently released, and fully support the principles set forth in the Code,” Thompson said. “Accordingly, I will be recommending to the New York City Pension Funds that they promptly adopt those principles as part of their investment policies and practices.”

Thompson added: “I commend the Attorney General for this significant achievement for reform and look forward to continuing to work with him and his office in bringing additional transparency and accountability for investment managers seeking investments from public pension funds.”

Last week, Cuomo announced a Public Pension Fund Reform Code of Conduct which bans investment firms from hiring, utilizing, or compensating placement agents, lobbyists, or other third-party intermediaries to communicate or interact with public pension funds to obtain investments.

To avoid pay-to-play schemes, the Code prohibits investment firms (and their principals, agents, employees and family members) from doing business with a public pension fund for two years after the firm makes a campaign contribution to an elected or appointed official who can influence the fund's investment decisions.

This provision also would bar all firms currently doing business with the pension fund from making such campaign contributions. Investment firms also would have to disclose any conflicts of interest to public pension fund officials or law enforcement authorities, to increase transparency and avoid abuse of the fund for personal gain.

Adoption of the principles set forth in the Attorney General’s Code of Conduct will further strengthen transparency in the City’s public pension systems and builds on work already accomplished by Comptroller Thompson.

Over the last few weeks, Thompson has:

• Successfully urged three of the City’s Pension Funds to ban the use of placement agents in private equity investments with the Funds. Trustees of the remaining two boards are scheduled to vote on the measure later this month.
• Asked the Attorney General to investigate whether the Funds “were intentionally misled or deceived” as to the identities of any placement agents involved in a particular investment.
• Called on Mary Schapiro, the Chairman of the U.S. Securities and Exchange Commission (SEC), to increase transparency and public confidence in the investment activities of all public pension funds. You can view the Comptroller’s letter at www.comptroller.nyc.gov. You can view the Comptroller’s letter here.

The Funds are the: New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund, and Board of Education Retirement System.

Trustees of the Pension Funds include Mayor Bloomberg, his commissioners, and representatives and appointees from labor unions. The Comptroller serves as a member of the Board of Trustees of four of the five Funds and is investment advisor to, and custodian of, the five. The Funds cover more than 237,000 retirees and beneficiaries and more than 344,000 City and City-affiliated employees. The Funds have combined assets of more than $77 billion as of March 31.

Trustees are as follows:

New York City Employees’ Retirement System: Bud Larson, Mayor’s Representative; New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), James Molinaro (Staten Island), and Ruben Diaz, Jr. (Bronx); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.
Teachers’ Retirement System: Bud Larson, Mayor’s Representative; Deputy Chancellor Kathleen Grimm, New York City Department of Education; mayoral appointee Tino Hernandez; and, Sandra March, Melvyn Aaronson (Chair) and Mona Romain, all of the United Federation of Teachers.

New York City Police Pension Fund: Mayor Michael Bloomberg; New York City Acting Finance Commissioner Michael Hyman; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Thomas Sullivan, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.

New York City Fire Department Pension Fund: Mayor Michael Bloomberg; New York City Fire Commissioner Nicholas Scoppetta (Chair); New York City Acting Finance Commissioner Michael Hyman; Stephen Cassidy, President, James Slevin, Vice President, Robert Straub, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Dunne, Captains’ Rep.; John J. McDonnell , Chiefs’ Rep., and James J. McGowan, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Joseph Gagliardi, Marine Engineers Association.

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