Suit claims NM money paid NY bribes

ALBUQUERQUE (KRQE) - The complicated pay to play lawsuit involving New Mexico's state pension fund has just sprouted another tentacle that stretches all the way across the continent.

Former Education Pension Fund Official Frank Foy has added what he calls a New York connection to his lawsuit.

Basically, Foy claims New Mexico money helped pay for New York bribes.

“This ‘Pensiongate’ situation is a quote "Matrix of Corruption" that extends all the way across the country,” Foy’s lawyer Victor Marshall said. ”This matrix of corruption however, is centered in New York and New Mexico.”

Marshall and his client accuse dozens of New Mexico state officials of taking kickbacks in return for investment decisions.

Tuesday, Marshall added three new defendants, who are men that are also charged in New York's pension kickback scheme. The men are political strategist Hank Morris, former New York State Comptroller Alan Hevesi and former New York Deputy Pension Director David Loglicsi.

New York prosecutors claim those three illegally steered pension fund investments to companies who made generous contributions to Hevesi's campaigns.

“They used New Mexico retirement money to pay bribes and kickbacks in New York,” Marshall said.

As proof, Marshall claims Hank Morris received finder's fees from the Carlyle and Quadrangle investment groups. Those companies landed contracts worth $20 million apiece to manage New Mexico investments and pension dollars.

It's an interesting connection, but not exactly a smoking gun. Marshall admits he doesn't have one, but insists what he does have will impress a jury.

The lawsuit also demands the removal of New Mexico Educational Retirement Board chairman Bruce Malott—Foy's former boss.

Malott's attorney, Marty Esquivel, called the new claims "reckless grandstanding."

Esquivel said he's very confident a judge will not only dismiss the charges, but also reprimand Marshall.