New Chris Christie Scandal: NJ Gov Gave Pension Fund Billions to Wall Streeters Who Bankrolled His Campaigns
New Jersey Republican Gov. Chris Christie has turned his state’s multi-billion dollar pension fund into a giant political extortion racket, where top employees at 43 different investment firms were given contracts to manage $14 billion in retirement accounts after giving $11.6 million to Republican Party operations that helped elect Christie governor and fueled his rise as chairman of the Republican Governors Association.
This massive “pay-to-play” scheme is illegal under state and federal anti-corruption laws, but those hurdles did not deter Christie and the Republicans from raising the campaign funds and subsequently doling out the lucrative contracts, a two-month investigation tracing this political money train by Pando Daily’s David Sirota has found.
Christie’s staff refused to comment for the report published Thursday, which included a detailed spreadsheet naming the donors and recipients. The reporting is a showcase of corruption, impotent campaign finance law, ignored ethical standards and underscores how little it actually costs wealthly interests to buy influence and wrest profits.
The $11.6 million in donations, which date back to Christie’s first gubernational election in 2009, led to $14 billion in public funds to manage—an investment of little more than a penny for every dollar in pension assets turned over to privatized managers.
During this same period, top employees of these investment houses also gave more than $200,000 in political donations to New Jersey Democrats—underscoring that influence-buying is about profits and cultivating power more than partisanship. However, most of the more than $11 million donated went to Republican groups that, in the shell game that is modern political money laundering, spent it to elect Christie as New Jersey governor, greased his rise as RGA chairman, and bet on his likely presidential candidacy in 2016.
The GOP donors who received Christie administration contracts were from Goldman Sachs, Blackstone, Credit Suisse, JP Morgan, Guggenheim Partners, Gleacher, Lubert Alder, General Catalyst, State Street, Elliot Associates, Parella Weinberg, Third Point, Lazard Asset Management, and others. New Jersey campaign finance law bars state officials from giving contracts to firms where employees have made contributions to campaigns for governor and state legislature. The federal Securities and Exchange Commission also has anti-circumvention rules to stop “pay-to-play” schemes.
PandoDaily’s report detailed these anti-corruption laws and contacted a few donors, who contended that their political giving was allowed under narrow loopholes—which Sirota explained was not the case. Some donors said they were not associated with the firms listed on the campaign finance reports, even though they responded to Sirota’s questions from e-mails addresses at those same companies.
Some of the biggest donations—quarter-million dollar increments or more—went to the Republican Governor’s Association, which, since 2009, got $7.1 million from employees of firms managing state pension funds, PandoDaily found. When it came time to send those funds back to New Jersey for use by Christie’s campaign, his staff breezily said it was exempt from anti-corruption laws that would have barred use of that money.
“For its part, the Christie administration has declared that when it comes to RGA contributions, it will not enforce the anti-circumvention provisions in state pay to play rules. Indeed, in 2013, the Bergen County Record reported that the Christie-controlled Election Law Enforcement Commission unilaterally deemed such contributions “legal because the governors’ group is bound by federal regulations, not state law.”
The Republican National Committee used the same kind of subterfuge, PandoDaily said.
“Along with the aforementioned [SEC] anti-circumvention provisions, New Jersey pay to play rules bar pension investment contracts from going to firms whose financial professionals have made donations to “political committee organized in this State.” The RNC’s extensive operations in New Jersey raise questions about whether it fits that definition.
In 2009, for instance, the RNC publicly bragged about spending $4.1 million in New Jersey, and about organizing “over 2 million volunteer phone calls and doors knocked” in the state.
Likewise, in 2013, the Newark Star-Ledger published an article headlined, “Republican National Committee foots the bill for Christie’s voter turnout operation.” Noting that the RNC’s operations were headquartered next door to Christie’s campaign, the article quoted Christie’s campaign manager saying the group “work(s) alongside Christie for Governor people, they work alongside Republican state Senate campaigns whether incumbents or challengers, they work with county freeholder candidates, all the way down to mayors.” That is corroborated by New Jersey state campaign reports in which the RNC details how it funnels money to New Jersey county parties.
This kind of nerdy detail is why PandoDaily’s report on how Christie abused his office—to accumulate more political money, power and influence—a real investigative triumph. It not only shows how political corruption works in New Jersey when a governor manages his state’s biggest coffers like a mafia don and flouts state and federal law to do so. It reveals how the political system can be corrupted by insiders, and why Christie is anything but presidential. An orange jumpsuit would be more appropriate.