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



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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pawsvacationcare August 25 2014 at 4:45 PM

Christie is so corrupt - just like Nixon and D. Cheney, etc. Three words: President Hillary Clinton. No one comes close. And the RepubLIE-KKK-CONs have absolutely NO ONE!

Flag Reply +82 rate up
41 replies
Alan August 25 2014 at 4:47 PM

Christie is a crook plain and simple. He steals from those who are powerless in the hope he will go undetected and unpunished.

Flag Reply +72 rate up
9 replies
Charlie August 25 2014 at 4:49 PM

And this is what republicans really, really, really want to do with SS.

Flag Reply +70 rate up
9 replies
Bonnie August 25 2014 at 4:39 PM

I'm seeing another good for nothing polictian. He will never get my vote. Already too many black marks against him.

Flag Reply +48 rate up
4 replies
bob3812 August 25 2014 at 4:53 PM

quitely robbed the pension by paying a political kickback to a alies firm and then blame the public workers for not having money. Then make it worse by not keeping up with your promise by not making your required pension contributions.

Flag Reply +45 rate up
5 replies
stevemontani August 25 2014 at 4:45 PM

Why is it that all these Prosecutors turned politicans are so uniformaly corrupt? makes you wonder what horrific things they did on the old job.

Flag Reply +41 rate up
weilunion August 25 2014 at 4:42 PM

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.

Chrisitie is the poster boy for funneling retirement funds to corporations.

He is a coin operated politician, just like Clinton who made one hundred million after repealing Glass Steagal from speechs to banks and hedgefunds.

Cement shoes would be appropriate and theNew Jersey bay

Flag Reply +32 rate up
10 replies
are.we.better.off.now August 25 2014 at 5:01 PM

As months take us into elections
Democrats come out and stir up 'dirt'.
They call it
"scandal creation season"..!
And Democrats are very good at it!

Flag Reply +30 rate up
44 replies
AMedicGary August 25 2014 at 4:42 PM

all politicians = greedy, corrupt back stabbers.

Flag Reply +28 rate up
1 reply
SAM AMedicGary August 25 2014 at 11:13 PM

AMEDICGary>>>>thats a shame, but thats all we got.

Flag Reply 0 rate up
wmerr58523 August 25 2014 at 4:37 PM

Once again the "Huff" goes after Republicans but leaves dems alone. What about New York's mayor and his scandal?

Flag Reply +26 rate up
27 replies
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