Tuesday, April 21, 2009

Bianca Knows Best ...

...And Helps a "Cool" Mom

Posted By on Tue, Apr 21, 2009 at 1:13 PM

Check out Bianca's latest advice column.

New Investment Scandal?

New York “kickback” investigation names Memphis firm; may spark scrutiny here.

Posted By on Tue, Apr 21, 2009 at 9:22 AM

An extortion scandal in New York State is beginning to reverberate in Memphis, where a company named as having illegally purchased an assets-management contract from the Empire State's former comptroller is currently involved in managing assets for both Shelby County government and Memphis Light Gas & Water.

The firm is Memphis-based Consulting Services Group, which, according to a complaint by the Securities and Exchange Commission, acquired management control over New York state Retirement Fund assets by paying a kickback of $1,150,000 in 2005 to a top political aide to the state's then comptroller, Alan Hevesi. CSG was directed to pay that aide, Henry Morris, by New York's deputy comptroller, David J. Loglisci, as the price -- and the only means -- of landing the management contract.

The amount of the payment demanded was equivalent to 30 percent of the management fees that CSG would receive from the state’s Retirement Fund for managing its assets. It was formally paid to Searle & Co, a Connecticut financial services firm which employed Morris, who then pocketed 95 percent of the payment in the form of a "finder's fee."

Morris and Loglisci had previously been indicted by New York state attorney general Andrew Cuomo for their alleged involvement in "a fraudulent scheme to extract kickbacks from investment management firms seeking to manage investment assets held by the New York State Common Retirement Fund." CSG, which is but one of several firms allegedly forced to provide front-end payments to get state business, was not charged but may be providing evidence in that case as well as the SEC investigation.

At the time of the alleged payoff, CSG had for several years been serving the Comptroller's Office as a hedge fund consultant, providing services similar to those it contractually performs for Shelby County government and MLGW. The SEC complaint cites the fact of CSG's prior involvement with the New York Comptroller's office as a priori evidence of wrong-doing.

As the complaint states, "Given that CSG already had a strong relationship with Loglisci and other senior members of the Comptroller's investment staff, the statements by Loglisci and Morris regarding the need for CSG to engage Morris as a 'finder' amounted to a kickback demand. Morris did not need to, and did not introduce CSG to the Retirement Fund or perform any other legitimate placement or finding services for CSG."

The complaint also states that Loglisci "arranged for the Retirement Fund to hire CSG to create and manage an investment fund exclusively for the Retirement Fund, named Liberty Oak Capital Fund, L.P. (Liberty Oak 16 Fund)." Further: "Pursuant to this undisclosed quid pro quo arrangement, the Retirement Fund purchased a $635 million limited partnership interest in the Liberty Oak Fund between July and December of 2006 and another $130 million interest in June 2007.

"This raises all kinds of questions," said Shelby County Commissioner Mike Ritz, when apprised of the SEC complaint by the Flyer. Ritz, who had previously sought detailed information on county investments from county finance officer Jim Huntzicker, has launched his own inquiries of county officials concerning the activities of CSG.

In an e-mail sent last week to Huntzicker, Shelby County Mayor A C Wharton, District Attorney General Bill Gibbons, and fellow commissioners J.W. Gibson and Mike Carpenter (both members of the Pension Board and the four member commission investment committee), Ritz requested, "Because of the recent Madoff, Stanford, and other revelations re: bad and/or illegal investment advice, I recommend that our Pension Fund began a thorough review of every money management relationship, the circumstances of each firm's original selection to advise the Pension Fund, any charges by any party against any advisor, and any other matter the Retirement Board or Investment Committee deems appropriate."

Responding to Ritz's emails, Wharton expressed thanks for receiving them and continued, "I will see that you get your answers. ... I share the same concerns."

Huntzicker also responded, promising to "see that our Board exercise its 'due diligence' on this matter and all other contractual relationships." The county CFO said that CSG received a "base consulting fee" of $110,000 from the county "for investment advice and certain reporting functions, as well as additional fees for special manager searches and hedge fund monitoring."

County retirement-systems manager David Pontius would add that CSG "were originally hired in 1985 and we did a national search (April 2007) and re-hired them."

UPDATE: The Flyer received the following communication from CSG attorney Edward R. Balsmann:

On March 19, 2009, the Securities and Exchange Commission (“SEC”) filed a civil complaint against Henry Morris, David J. Loglisci and associated parties (the “Complaint”) relating to the New York State Common Retirement Fund (“Retirement Fund”). CSG fully cooperated with the SEC’s investigation and is not a party to the litigation.

The SEC’s Complaint includes information about the Liberty Oak Capital Fund, L.P. (“Liberty Oak Fund”), which was a limited partnership established in June 2006 and designed by counsel for the Retirement Fund as a single purpose entity through which capital of the Retirement Fund would be allocated to a customized portfolio of hedge fund investments. CSG, as general partner of the Liberty Oak Fund, managed the hedge fund investments of the Liberty Oak Fund for the benefit of the Retirement Fund. As part of the Retirement Fund’s 2008 Strategic Plan, it was determined that the investment staff of the Retirement Fund would make direct investments in hedge funds thereby eliminating the need for the Liberty Oak Fund. In April 2008, the Liberty Oak Fund was dissolved. CSG continues to assist the investment staff of the Retirement Fund in the dissolution process.

The SEC’s Complaint contains allegations that a solicitation agreement (the “Agreement”) between CSG and a registered broker-dealer, Searle & Co., was not disclosed to the Retirement Fund. No claims have been made against CSG relating to the disclosure of this Agreement and CSG disputes the accuracy of the allegation that the Agreement was not disclosed. In fact, during the joint investigation conducted by the Office of the New York Attorney General (“New York Attorney General”) and the SEC, CSG provided numerous documents that demonstrated the disclosure of the Agreement to both the appropriate employees of the Retirement Fund and outside counsel to the Retirement Fund, Morgan Lewis and Bockius.

Additionally, on March 26, 2009, CSG, through its outside legal counsel, sent a letter to the SEC’s New York office detailing the full disclosure of the solicitation agreement as explained above in this email and in that letter requested that the SEC take immediate action to correct the inaccurate allegations involving CSG’s disclosures that were contained in the SEC’s complaint. Further, on March 27, 2009, the firm’s outside legal counsel sent a letter to the New York State Attorney General’s office requesting that the Attorney General’s office provide the SEC with any documentation that it possessed that confirms that CSG’s solicitation agreement was in fact disclosed by CSG.

Monday, April 20, 2009

Tyreke Evans Officially Declares for NBA draft...

... but will not sign with an agent and could return to the Tigers next season.

Posted By on Mon, Apr 20, 2009 at 9:36 PM

Evans issued the following statement through the university: "I am pursuing what has been a dream of mine for a long time, and that is to play someday in the NBA," Evans said in a school-issued news release. "I am thankful to Coach [Josh] Pastner and my family and friends for their support.

"I am putting my name in the draft and see what happens. I will attend some workouts and see what feedback I receive. Once I have all the information available to me, I will sit down with my family and talk about what's the next step to take -- either to remain in the NBA draft or return for another season of college basketball here at Memphis."

City Council Considers New Traffic Offenses

Will discuss fines for minor vehicular offenses.

Posted By on Mon, Apr 20, 2009 at 2:39 PM

Bianca Phillips reports that Memphis City Council is looking at some new traffic ordinances. Read about it here.

From My Seat ...

Frank Murtaugh likes what he sees with this year's Redbirds.

Posted By on Mon, Apr 20, 2009 at 9:15 AM

Frank Murtaugh likes what he sees with this year's Redbirds. Check out his take on the team at From My Seat.

Sunday, April 19, 2009

Listening Log: Art Brut, Brother Ali, Pains of Being Pure at Heart

Check out what Chris Herrington's listening to this weekend.

Posted By on Sun, Apr 19, 2009 at 9:19 AM

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Saturday, April 18, 2009

Are You Shakespearianced?

Bard-inspired plays abound this weekend.

Posted on Sat, Apr 18, 2009 at 8:03 AM

This weekend, a variety of plays written or inspired by William Shakespeare open to the public.

To see what's shaking, go to Chris Davis' theater blog Intermission Impossible.

Friday, April 17, 2009

Jobs in Memphis

Is the co-founder of Apple moving to Memphis?

Posted By on Fri, Apr 17, 2009 at 3:12 PM

Okay, here's a story that sounds like the most untrue thing ever. Naturally, I'm going to link to it.

The word on the e-street is that Steve Jobs, co-founder and CEO of Apple and all-around master of the universe, may be on the move to Memphis. The reason: health.

Read more at Sing All Kinds.

Red in the Place

South Main is painting the town — its part of it, at least — red.

Posted By on Fri, Apr 17, 2009 at 2:26 PM

In the coming weeks, the South Main Association will install 10 large red panels in a vacant lot across the Central Station.

"The site has some environmental issues," says Lorie Chapman, chair of the group's neighborhood improvement committee. "We hope to eventually have it developed, but until then, this is a neighborhood beautification project."

The panels, following the lead of Anthony Lee's "Modern Hieroglyphs" project on the Central Station wall, will be several shades of red.

Read more at Mary Cashiola's "In the Bluff."

Why Newspapers are Dying

Big media is eating itself. Chris Davis offers a perspective.

Posted By on Fri, Apr 17, 2009 at 10:08 AM

Big media is eating itself. Chris Davis offers a Viewpoint.

Thursday, April 16, 2009

Bob Levey's Memphis

A noted Washington D.C. writer offers his take on Memphis and the University.

Posted By on Thu, Apr 16, 2009 at 5:39 PM

From 1981 to 2004, Bob Levey wrote a column for The Washington Post called "Bob Levey's Washington." After taking early retirement, he came to Memphis in 2006 as the Hardin Chair of Excellence in Journalism at the University of Memphis. He'll finish that assignment in May and move back to the Washington area. But not before I grabbed him this week for a driving tour of the campus and his adopted home of Midtown to see what this unusually observant and articulate "outsider" has to say about his three-year stay.

More accurately, three years of traveling back and forth between Memphis and Washington so often he's on a first-name basis with airport personnel -- and a lot of other people. When he was writing a column for an audience of more than one million readers, his specialty was burrowing into the city and its neighborhoods and businesses and getting people to open up. The man can talk as well as write.

We met at the Holiday Inn on Central and headed west, passing the little house Levey looked at but decided not to rent when the landlord said "you can have it if you will mow the lawn." We turned south on the evolving Highland Strip -- "the potential is enormous, with 18,000 students sick of eating on campus" -- to the railroad tracks and "insane intersections" that split the campus and leave visitors shaking their heads in wonder.

"I've seen kids belly flop to crawl under a stopped train in order to get to class," he said. "No tunnel, no bridge. I have never seen a more unsafe situation in my life. Somebody is going to get killed here."

We proceeded to a place where somebody was killed, albeit by a gun, not a train. The murder of student-athlete Taylor Bradford nearly two years ago is still memorialized with fresh flowers and mementoes spread around a tree.

"Half of the students have turned over since he died. People who say this is a commuter school and no one cares should come out and look at this."

Levey doesn't understand all the Memphis haters.

If I had a choice of Memphis or Cleveland or St. Louis it wouldn't be close. This city has sauce. If the enemy is white bread then this city has nothing to fear."

It was small kindnesses and quirky places that sold Levey on Memphis and the campus -- the ramshackle M.A. Lightman Bridge Club, breakfast at Brother Juniper's, the oil-change place that gave a discount if you got there at 7 a.m. sharp, the Laundromat where the attendant folded his clothes and called him by name and never gave him a claim check, the racial intermingling at the Tiger Den and in classes. What he never understood, however, was the green and woodsy South Campus, which is mainly the domain of minor sports.

"These old buildings could be knocked down in an hour and a half. The university could be half again as large with no pain. Most other urban universities like Chicago, Columbia, and Penn are landlocked."

Levey, who was a sportswriter for the Post before he became a columnist (he predicts the Grizzlies will move to Las Vegas), thinks the football stadium should be on the South Campus.

"I'm a fundraiser as well as a teacher, and what works is getting alumni back on campus. Ain't nobody went to school at the Liberty Bowl."

Another gripe: the lack of bus service on Central Avenue between UM and Midtown – "If that isn't a bus route I don't know what one is" -- and the untapped potential of Cooper-Young's restaurant district because of the lack of employers in walking distance.

Then there was the time he went to Raffe's Deli on Poplar to meet somebody. The proprietor threw him out after he had waited a while.

"He thought I looked like a hold-up man. I've got gray hair! I’d been accused of a lot of things in my life but never that."

Tea Party On!

Conservative Teabaggers do it in public: Sights and sounds from a protest in Audubon Park. Radical!

Posted By on Thu, Apr 16, 2009 at 8:00 AM

Wednesday, April 15, 2009

Grizzlies Finish With a Win Over Atlanta

Chris Herrington evaluates the season, key players, and Coach Lionel Hollins.

Posted By on Wed, Apr 15, 2009 at 10:50 PM

Chris Herrington evaluates the season, the key players, and Coach Lionel Hollins at Beyond the Arc, the Flyer's GrizBlog.

Eleven Shows to Look Forward To...

Flyer Theater critic Chris Davis has made a list.

Posted By on Wed, Apr 15, 2009 at 11:55 AM

Check it out at Intermission Impossible.

Tuesday, April 14, 2009

Taking Care of Bose

32 years after his death, Elvis fronts for Bose.

Posted By on Tue, Apr 14, 2009 at 9:17 PM

Read all about in the Flyer’s pop culture blog, Sing All Kinds.
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