NJ Gov. Chris Christie's pension moves cost taxpayers and retirees billions

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NJ Gov. Chris Christie's pension moves cost taxpayers and retirees billions
Former President Bill Clinton, right, shakes New Jersey Gov. Chris Christie's hand as he arrives on stage during the Clinton Global Initiative (CGI) Meeting in Chicago, Friday, June 14, 2013. Clinton and Christie spoke during a closing session titled "Cooperation and Collaboration: A Conversation on Leadership." (AP Photo/Scott Eisen)
In this July 15, 2014, photo, former U.S. Secretary of State Hillary Rodham Clinton reacts to host Jon Stewart during a taping of "The Daily Show with Jon Stewart," in New York. As Clinton promotes her book, liberals in the Democratic party are elbowing into the 2016 presidential conversation while pitching populist messages on the economy and immigration. (AP Photo/Frank Franklin II)
New Jersey Gov. Chris Christie talks with reporters at the National Governors Association convention Saturday, July 12, 2014, in Nashville, Tenn. (AP Photo/Mark Humphrey)
New Jersey Gov. Chris Christie, center, talks with members of the media at the National Governors Association convention Saturday, July 12, 2014, in Nashville, Tenn. (AP Photo/Mark Humphrey)
Former Secretary of State Hilary Clinton speaks at the World Bank May 14, 2014 in Washington, DC. Former Secretary of State Hilary Clinton joined others to speak about women's rights. AFP PHOTO/Brendan SMIALOWSKI (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
FILE - In this Tuesday, June 24, 2014, file photo, New Jersey Gov. Chris Christie addresses a gathering after he signed into law a bill that would extend the cap on arbitration awards to New Jersey's police and firefighters in front of the Statehouse Tuesday, June 24, 2014, in Trenton. Gov. Chris Christie's administration is facing an investigation into how it paid for a $1 billion repair of a New Jersey bridge. Two people said the investigation deals with whether funding for Pulaski Skyway repairs was misrepresented in bond documents by the Port Authority of New York and New Jersey. (AP Photo/Mel Evans, File)
Former U.S. Secretary of State Hillary Clinton smiles as she speaks at an event at Children's Hospital Oakland Research Institute (CHORI) to launch a community campaign to encourage parents to talk, sing and read to their young children in Oakland, Calif., Wednesday, July 23, 2014. (AP Photo)
BELMAR, NJ - MARCH 25: New Jersey Gov. Chris Christie speaks during a Town Hall Meeting with families affected by Superstorm Sandy at Belmar Borough Municipal Building on March 25, 2014 in Belmar, New Jersey. Christie talked about some of the programs the state is running for homeowners, as well as efforts to build and restore dunes along the coast this spring,The governor was not asked about the George Washington Bridge lane-closure (Photo by Kena Betancur/Getty Images)
Former U.S. Secretary of State Hillary Rodham Clinton waves to the media after a meeting with French President Francois Hollande at the Elysee Palace in Paris, Tuesday, July 8, 2014. (AP Photo/Michel Euler)
New Jersey Gov. Chris Christie, right, speaks while former President Bill Clinton listens during the Clinton Global Initiative America's meeting, Friday, June 14, 2013, in Chicago. Clinton and Christie held a closing session titled "Cooperation and Collaboration: A Conversation on Leadership." (AP Photo/Scott Eisen)
NEW YORK, NY - NOVEMBER 11: Martin Edlund (L) and Former United States Secretary of State Hillary Clinton attend Malaria No More's International Honors Gala honoring Hilary Clinton on November 11, 2013 in New York City. (Photo by Theo Wargo/Getty Images for Malaria No More 2013)
BELMAR, NJ - MARCH 25: New Jersey Gov. Chris Christie speaks during a Town Hall Meeting with families affected by Superstorm Sandy at Belmar Borough Municipal Building on March 25, 2014 in Belmar, New Jersey. Christie talked about some of the programs the state is running for homeowners, as well as efforts to build and restore dunes along the coast this spring,The governor was not asked about the George Washington Bridge lane-closure (Photo by Kena Betancur/Getty Images)
New Jersey Gov. Chris Christie gestures as he listens to a question as he addresses a gathering at Shimon and Sara Birnbaum Jewish Community Center in Bridgewater, N.J., Wednesday, April 11, 2012. Days after returning from a trip to Israel, Christie met with Jewish leaders in New Jersey. Christie was in Jerusalem during Holy Week for a trade mission and tour. He then traveled to Jordan with his family before returning home on Sunday. (AP Photo/Mel Evans)
KEANSBURG, NJ - FEBRUARY 04: New Jersey Gov. Chris Christie speaks during a press conference with families affected by Superstorm Sandy at a lounge in the New Point Comfort Fire Company on February 4, 2014 in Keansburg, New Jersey. Christie, whose governorship is being threatened by a scandal is facing federal investigation over use of Sandy funds. (Photo by Kena Betancur/Getty Images)
BERLIN, GERMANY - JULY 06: Hillary Rodham Clinton, former United States Secretary of State, U.S. Senator, and First Lady of the United States, arrives for the presentation of the German translation of her book 'Hard Choices' ('Entscheidungen' in German) at the Staatsoper in the Schiller Theater on July 6, 2014 in Berlin, Germany. (Photo by Adam Berry/Getty Images)
EWING, NJ - OCTOBER 30: New Jersey Gov. Chris Christie updates members of the media on damage and recovery efforts related to Hurricane Sandy from the emergency operations center at State Police Headquarters on October 30, 2012 in Ewing, New Jersey. High winds and a massive storm surge caused major destruction to the Jersey Shore and throughout the Garden State. (Photo by Jeff Zelevansky/Getty Images)
LAS VEGAS, NV - MARCH 29: New Jersey Gov. Chris Christie laughs while speaking during the Republican Jewish Coalition spring leadership meeting at The Venetian Las Vegas on March 29, 2014 in Las Vegas, Nevada. (Photo by Ethan Miller/Getty Images)
Former Secretary of State Hillary Clinton waits to speak at the World Bank May 14, 2014 in Washington, DC. Former Secretary of State Hilary Clinton and World Bank President Jim Yong Kim joined others to speak about women's rights. AFP PHOTO/Brendan SMIALOWSKI (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
NEW YORK, NY - MARCH 28: New Jersey Governor Chris Christie and his wife Mary Pat Christie look on during the regional semifinal of the 2014 NCAA Men's Basketball Tournament between the Connecticut Huskies and the Iowa State Cyclones at Madison Square Garden on March 28, 2014 in New York City. (Photo by Bruce Bennett/Getty Images)
BELMAR, NJ - MARCH 25: New Jersey Gov. Chris Christie laughs during a Town Hall Meeting with families affected by Superstorm Sandy at Belmar Borough Municipal Building on March 25, 2014 in Belmar, New Jersey. Christie talked about some of the programs the state is running for homeowners, as well as efforts to build and restore dunes along the coast this spring,The governor was not asked about the George Washington Bridge lane-closure (Photo by Kena Betancur/Getty Images)
Former U.S. Secretary of State Hilary Clinton arrives with France's Foreign Minister Laurent Fabius at the Quai d'Orsay, in Paris, Monday, July 7, 2014. The former U.S. secretary of state was in Paris or the publication in France of her book “Hard Choices” which recounts her four years running American diplomacy. French Foreign Minister Laurent Fabius offered a reception in her honor. (AP Photo/Thibault Camus)
Secretary of State Hilary Rodham Clinton bows in response to Vannak Anan Prum of Cambodia, before presenting him with a plaque for his work to end human trafficking, during the release of the 2012 Trafficking in Persons Report at the State Department in Washington, Tuesday, June 19, 2012. Prum was held captive on a Thai fishing boat from 2005 to 2009 in slave-like conditions. He escaped by jumping overboard and swimming four kilometers off of Malaysian Borneo. (AP Photo/Cliff Owen)
Republican New Jersey Gov. Chris Christie, right, speaks during the Clinton Global Initiative America's meeting in Chicago, Friday, June 14, 2013, as former President Bill Clinton listens. Christie is walking a political tightrope as he charts his future, trying to balancer his re-election campaign in a Democratic-leaning state with a potential presidential bid aimed at winning over Republicans. Clinton and Christie held a closing session titled "Cooperation and Collaboration: A Conversation on Leadership." (AP Photo/Scott Eisen)
Former U.S. Secretary of State Hillary Clinton holds her new book "Hard Choices" before a book signing at Northshire Bookstore on Tuesday, July 29, 2014, in Saratoga Springs, N.Y. Clinton is making selected stops to promote her book about her four years heading the State Department under President Barack Obama. (AP Photo/Mike Groll)
Hillary Rodham Clinton arrives to a signing of her book "Hard Choices", Thursday, July 17, 2014, in Ridgewood, N.J. (AP Photo/Julio Cortez)
FILE - This June 20, 2014, file photo shows New Jersey Gov. Chris Christie speaking at the Faith and Freedom Coalition's Road to Majority form in Washington. In advance of a potential 2016 presidential run, Christie has embraced a new signature issue, blasting the war on drugs as a trillion-dollar “failure.” He used his first major speech in front of an Evangelical conservative audience to again hammer the need for treatment over mass incarceration. (AP Photo/Molly Riley, File)
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By RYAN GORMAN

Embattled New Jersey Governor Chris Christie faces another possible scandal – this time for possibly costing tax payers nearly $4 billion after diverting state pension funds to Wall Street firms.

Wall Street mega firms Blackstone, Third Point, Omega Advisors, Elliot Associates and The Carlyle Group have reportedly pocketed $3.8 billion dollars in fees since 2010 at a rate triple what was paid to pension fund managers prior to Christie assuming office.

Christie advisor Robert Grady notably had a long career at The Carlyle Group prior to joining the government, according to the International Business Times.

The switch was made in 2010 to give the state "diversified portfolio and maximize returns while appropriately managing risk," Grady told the trade publication Institutional Investor in a report headlined "New Jersey ups the ante."

The Carlyle Group has received $450 million in state pension funds while ranking among the top fee earners on Wall Street, according to state disclosure documents.

All management fees paid to firms by the pension have skyrocketed from only $125.1 million in 2009 to nearly $400 million in 2013, according to the New Jersey State Investment Council, which oversees the pension.

Those higher fees coupled with underperforming assets have left the pension with a benefits gap bigger than the state's entire education budget.

This while the pension eked out a return of only 11.8 percent last year while similar funds average nearly a full percent higher, according to the IB Times.

Both pension funds used by teachers in California saw returns well over 18 percent in June alone, the Associated Press reported. They had expected returns of only 7.5 percent for the whole year.

New Jersey's fund is also invested at a rate of just over 25 percent in financial firms, according to the NJSIC, more than double any other sector.

At least one person voted against Christie's diversion plan, and he told the IB Times this outcome was inevitable.

"All the leading players on the [New Jersey State Investment Council] were from the alternative universe and all of their decisions were driven by a political agenda and an investment ideology which had no relationship to facts on the ground," said Jim Marketti.

"And the facts were that you simply couldn't justify these investments on the basis of what they cost in fees to generate a dollar of new returns."

A New Jersey official defended the moves, saying that the state's pension has earned a return this year of 15.9 percent.

Similar funds are averaging returns of well over 17 percent, according to the IB Times.

This is just the latest in a series of bizarre scandals for Christie that have included the "Bridgegate" traffic tie-up at the George Washington Bridge, the possible bullying of at least one high-profile mayor (Hoboken's Dawn Zimmer) over Superstorm Sandy recovery funds and scrutiny of real estate deals around the state.

The questionable quandries have put a dent in his reported presidential ambitions as Christie defends the pension problems by saying they are proof retirement benefits to retirees – earned through decades of service to the Garden State – need to be cut.

There's no word on whether "The Governor" would also demand fees paid to Wall Street also be cut.

Chris Christie's Image Has Yet To Recover In New Jersey

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