Garden State Gov. Says No Look Needed At State Hedge Investment

Nov 4 2008 | 1:31am ET

New Jersey Gov. Jon Corzine yesterday rejected calls for an investigation into a state pension fund’s hedge fund investments, saying “anybody that knows anything” would know that those investments are protects by the government’s Wall Street bailout.

Corzine, a former co-chairman of Goldman Sachs, was asked if more oversight of the $71 billion New Jersey Division of Investment was needed after it invested $94 million in emergency capital in a BlackRock hedge fund, to shore up its existing $470 million investment. His reply was terse and succinct.

“On this circumstance, absolutely not,” he said.

“In fact, anybody that knows anything about a capital structure of a corporation would know that the investment division was choosing to invest in securities that are protected by the capital that was infused by the federal government into the banks.”

A pair of state senators had called for a bipartisan committee to look into the Investment Division’s decision. Barbara Buono, a Democrat who heads the state Senate’s Budget and Appropriations Committee, had demanded more accountability at the investment.

“The $544 million investment may turn out to be a good one—or another $115 million loser like the state money put into the failed bailout of now-bankrupt Lehman Brothers,” Pennacchio said in a statement.

“Those kinds of decisions should be left to professionals like the people we have who run our investment portfolio,” Corzine shot back.

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