Riverstone founder David Leuschen coughs up $20m for role in NY pension scandal

Leuschen has agreed to pay up $20m in restitution to absolve him of his role in the corruption case involving the New York State Common Retirement Fund (CRF).

Leuschen is accused of giving $100,000 to a relative of a pension fund official following a $150m investment by the fund into a Carlyle-Riverstone joint venture. The charge matches that brought against Elliott Broidy, ex-chairman of Markstone Capital, who last week pled guilty to bribery charges in the same case.

According to Cuomo, Riverstone was a joint venture partner with Carlyle on three investment deals with the CRF. The Riverstone-Carlyle partnership received $530m in total from the CRF through spurious placement agent Searle, a company associated with Henry “Hank” Morris - the chief political aide to then comptroller Alan Hevesi.

Attorney General Cuomo said, “It is important that both firms and individuals be held accountable for conduct that jeopardised the integrity of the New York State Common Retirement Fund.”

In June 2009, Riverstone became the second company to sign on to Cuomo’s Public Pension Fund Reform Code of Conduct and paid $30m in restitution to the CRF. Carlyle signed onto the code in May 2009 and paid $20m to the state of New York to resolve its role in the case. Leuschen’s payment brings the total amount collected by Cuomo on the Carlyle-Riverstone investments to $70m.

Riverstone issued the following statement, “Riverstone and its founders are pleased to have resolved all issues with the New York Attorney General with respect to its investigation of fundraising activities at the New York Common Retirement Fund.
“We continue to support the efforts of the New York Attorney General and his staff to level the fundraising playing field for all parties involved.”

Cuomo’s inquiry has collected over $100m for the retirement fund and the state so far.

The investigation is ongoing.

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