Day: January 19, 2016

Following the publication of a letter sent to the FBI, SEC, and US Attorney’s Office by Rhode Island’s Future, we chose to take a deeper look at the players and parties ripping off retired public employees. What we found was a massive mess of money, right-wing ideologues, and the attempted further bail-out of Wall Street at the expense of state and municipal workers that goes all the way to the top and which could end up shaking the foundations of the 2016 campaign in ways not imagined.

One of the figures that appears in this whole fracas is a man familiar to those who have paid attention to the less-publicized elements of that political machine unto itself known as the Clintons, one Marvin Rosen. Ted Seidle wrote in his letter to the federal authorities the following:

As noted in my first report, when asked by the SEC in 2009, ERSRI admitted that Fenway Partners Capital Fund III paid an influential intermediary, Marvin Rosen, of Diamond Edge Capital Partners $262,500 related to this investment and paid the firm a total of approximately $1 million related to four private equity investments. Mr. Rosen was a Democratic fundraiser linked to former President Bill Clinton whose firm earned millions in New York pension fund deals in 2005 and 2006 when Alan Hevesi was state controller. Fenway and Mr. Rosen were also was involved in a pay-to-play controversy related to the New Mexico state pension.

To delve into the history of Mr. Rosen is to journey into the dark underbelly of the Democratic Party, a party that has been co-opted and compromised by Wall Street since the days of Bill Clinton’s gubernatorial campaigns, if not earlier. Since the mid-1980’s, a brand of “New Democrats” has used the once-progressive mantle of the party to justify the adoption of neoliberal policies that a Reagan or Bush would only dream of trying to foist on the American public, be it “the era of Big Government is over” hollowing out of Welfare and other social safety net programs or “Tough on Crime” minimum mandatory sentencing guidelines. This cuts to the core of your standard DINO (Democrat In Name Only), be it Bill and Hillary Clinton or Gina Raimondo.

When one writes about Marvin Rosen, they must be cautious because of his tendency to sue over bad press. As such, what follows is copy from sources that have previously withstood the Rosen wrath. The first comes from the book Kentucky Fried Pensions by Chris Tobe, who kindly shared his materials with us to complete these stories. Tobe has been covering a similar pension scheme in the Bluegrass State and says the following:

The most colorful placement agent firm, hands down, is a small operation called Diamond Edge Capital Partners LLC led by Marvin Rosen. Eileen Kotecki, who was Al Gore’s and John Edwards’ main Presidential fundraiser, worked there for a time. [i] Glen Sergeon, a Diamond Edge partner and a former trustee of the New York Teachers’ Retirement Fund, collected around $5 million from private equity firms and hedge funds doing business with the Kentucky Retirement Systems (KRS). Sergeon used the money to buy a lavish Fifth Avenue condo. [ii] Forbes reported that, in addition to Kentucky, Diamond Edge was involved in the New York pay for play scandal: “Diamond Edge Capital Partners is another firm that was paid–$6.8 million–by money managers for lining up work with New York. In 2008 Sergeon joined Diamond Edge, where he teamed up with Marvin Rosen, a company partner and the former Bill Clinton fundraiser who arranged Lincoln Bedroom sleepovers for big donors. Later that year Sergeon landed Diamond Edge its first business with Kentucky.” [iii] Rosen and another Diamond Edge partner, Marc Correra, are being sued for their role as placement agents in New Mexico. [iv] Marvin Rosen as late as 2013 has been disclosed as a placement agent in Rhode Island. Pro Football Hall of Famer Lynn Swann has also worked for Diamond Edge.
But the most colorful Diamond Edge partner was Kenneth Ira Starr, known as Hollywood’s Madoff. [v]  Currently serving a seven-year prison term, Starr managed the money of celebrities like Al Pacino, Uma Thurman and Lauren Bacall. Starr engineered a $33 million Ponzi scheme to swindle his clients and to impress his much younger, ex-stripper wife, Diane Passage. [vi] He was featured on the CNBC television show “American Greed” which focused on his rip-off of Sylvester Stallone and his obsession with, and subsequent marriage to, a pole dancer. [vii]
[i] http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atwTqj6OjY7U How Pension Placement Agent Exploited Political Ties, Martin Braun & Gillian Wee: May 18, 2009
[ii] http://observer.com/2011/07/secret-agent-glen-sergeon-sells-in-the-village-buys-in-harlem/
[iii] http://www.forbes.com/forbes/2011/0523/features-pensions-glen-sergeon-auditors-secret-agent_3.html
[iv] http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atwTqj6OjY7U
[v] http://www.huffingtonpost.com/2011/03/03/ken-starr-hollywoods-mado_n_830918.html
[vi] http://www.huffingtonpost.com/2011/03/03/ken-starr-hollywoods-mado_n_830918.html
[vii] http://www.cnbc.com/id/45554694

Of course, this begs the question what exactly is a placement agent?

Investopedia defines the term as “An intermediary who raises capital for investment funds. A placement agent can range in size from a small one-person independent firm to a large division of a global investment bank. Professional placement agents are required to be registered with the securities regulatory agency in their jurisdiction, such as the U.S. Securities and Exchange Commission. A placement agent operating in the U.S. must be registered as a broker or dealer.” When I discussed this with Tobe, he explained it as a job that has almost totally ceased to exist in the post-Citizens United era, but before then a placement agent functioned as a middle-man for big capital.

But that is only scratching the surface of Rosen’s history. Jeffrey St. Clair and the late Alexander Cockburn of CounterPunch! also have covered Rosen in their multi-decade stories about the Clintons. Their story, titled Clinton and the Cuban Fixer, is an impressive read worth the time. They write: