Wolf at Thompson Door, Part II . Avella Opens A Cut

Monday, August 31, 2009

Wolf at Thompson Door, Part II . Avella Opens A Cut

by Gary Tilzer

Tony Avella Opens the Door to the Pension corruption inside Thompson office that True News exposed in April The Wolf at Thompson's Door

When mayoral candidate Councilman Tony Avella was given the opportunity to pose his opponent City Comptroller Bill Thompson a direct question in last night’s first Democratic debate, he according to Robbins in the Village Voice opened up a small cut over Thompson's eye that the comptroller was able to to close. Avella asked Thompson flat-out if he were under investigation for his role in the Pensiongate scandal – specifically because two of Thompson’s top deputies left their jobs in the City Comptroller’s office and then promptly set up a private company which received contracts to manage millions of dollars of the City’s pension fund. Avella also pointed that both of those former employees – Josh Wolf-Powers and Adam Blumenthal – were now major donors to Thompson’s campaign for Mayor.

Thompson denied he was under investigation, but the facts that have come out to date in the True New and the Voice about the Pensiongate scandal cast serious doubt on the plausibility of Thompson’s denial. Wolf-Powers, a former top aide to Thompson, and Blumenthal, who served as First Deputy Comptroller and CFO from 2002-2005, left their jobs at the Comptroller’s office in 2005 to co-found the company Blue Wolf Capital Management right after Wolf-Powers rewrote the rules in the Comptroller’s office to ease restrictions on private money managers gaining access to the City’s retirement funds. In the coming years, Blue Wolf Capital received $60 million from the City’s pension funds to invest, yielding Blue Wolf $500,000 in fees. Subsequently, Wolf-Powers donated the maximum amount of $10,000 to Thompson’s, while Blumenthal gave $4,050 and Blue Wolf Management as a corporate entity donated $4,950.

But what True News reported months ago Wolf-Powers’ central role in the Pensiongate scandal extends beyond this clear-cut illustration of pay-for-play between Blue Wolf Management and the City Comptroller’s office. According to a April 21st, 2009 article in the New York Times, it was Wolf-Powers, when he was still working in the Comptroller’s office, who advised Steven Rattner’s private equity firm Quadrangle Group to hire Hank Morris as his “placement agent” if Quadrangle wanted to get the New York City pension fund to invest money with Rattner’s company. The New York Post revealed on April 23rd, 2009 that Quadrangle subsequently received $85 million from the City pension fund to manage – and failed to report that it had hired Morris as a placement agent. Morris has since been indicted for his role in the Pensiongate fund scandal and Rattner had to quietly resign his role as President Obama’s “Car Czar” under a growing cloud of suspicion about his involvement with Morris and Wolf-Powers.

How can Thompson claim his office is clean, when according to the New York Times, it appears that the Rattner-Morris four-state pension fund crime spree was launched inside Thompson’s office?” As soon as the media starts really probing Thompson’s connection to the abuse and theft of hundreds of millions of dollars of City workers’ hard-earned money, his campaign is going to unravel in disgrace and Bloomberg will win a third term by default. Democrats, have already embarrassed ourselves enough this year with the shameful shenanigans in Albany. Will the City’s Democratic Party crumble in scandal too. Stay Tuned.