NY-SEC pension probe includes ‘Chooch’ flick

A New York pension kickback probe by the state attorney general and the Securities and Exchange Commission now includes “Chooch,” a movie partly financed by fund managers seeking pension contracts.

The SEC has charged that David Loglisci, the state pension fund’s former top investment officer, benefited financially from investments in the movie, produced by one of his brothers, and that he failed to disclose a conflict of interest.

Loglisci, in his 2003 annual disclosure statement with the New York State Ethics Commission, said he had “sold all interests in Rose Park Equities,” which he described as a family partnership that included film rights to “Chooch.”

The Ethics Commission made Loglisci’s disclosure statements available to Reuters last week. The statements show that he made several disclosures relating to his ties with the film.

In his 2004 and 2005 disclosures, Loglisci said Rose Park Equities was sold in 2002, and he added that “some money is still owed to me.”

His 2004 filing said that he sold the partnership to his brother Nick Loglisci. David Loglisci left the pension fund in 2007, and his last disclosure statement for 2006 makes no mention of Rose Park.

Democratic Attorney General Andrew Cuomo has charged that David Loglisci “caused” certain fund managers to invest more than $250,000 in the movie and failed to disclose this or the conflict of interest he had due to his stake in the movie.

A summary of the R-rated comedy on IMDB.com says that the movie “Chooch” follows the plight of Dino Condito, from the Queens borough of New York, whose life takes a turn after he lets down his softball team by striking out in the bottom of the ninth. He is nicknamed “Chooch,” which means “lovable idiot.” “Only after a jail bust, donkey ride, chicken coop explosion, and a life-changing love affair at the local bordello does the crew finally arrive to save the day,” reads the IMDB plot summary.

Tami Powers, the film’s producer, told the Wall Street Journal last week that the movie had a budget of $1.1 million and was seen in limited release on three screens in the New York area. It also played in New Mexico and Buffalo, and then went to DVD, she said.

GoodTimes Entertainment, a company owned by PE firm Quadrangle Group, acquired the rights to publish the DVD for less than $90,000. That transaction is cited in the SEC’s complaint against Loglisci. The New York State Common Retirement Fund invested $100 million with Quadrangle. Quadrangle has not been charged with any wrongdoing and is cooperating with the SEC investigation.

A spokesman for Cuomo, who has said the attorney general’s pay-to-play probe of New York’s $110 billion pension fund involves a national network of fund managers and those who assisted them in winning business, was not immediately available to comment.

A spokesman for the SEC declined to comment.

Cuomo and the SEC are investigating placement agents, paid middlemen, that investment firms often hire to help them win business investing public pension funds.

The central figure in both probes is Henry Morris, who was former State Comptroller Alan Hevesi’s top fund-raiser.

The SEC says Morris reaped $15 million in illegal fees because David Loglisci approved investment firms that Morris recommended. The case against Morris partly hinges on his ability to influence pension staffers in choosing which firms they hired.

Lawyers for Morris and Loglisci say their clients are innocent. Loglisci’s lawyer said in March that his client’s investments benefited the pension fund and that all of the deals were vetted by outside fiduciaries, including bankers, lawyers and attorneys.

Much of the probe focuses on whether fees were disclosed. If the investments were shown to have performed well, it would be harder for the SEC and Cuomo to show the public was harmed.

The SEC and Cuomo charge that Loglisci won his job partly due to Morris’ efforts. But a source familiar with the case said Loglisci did not meet the fund-raiser until after he was hired. Loglisci was promoted after about a year to the top investment position.