Public employees in Ohio and New Jersey may suffer if National Enquirer’s legal troubles continue – By Melanie Schmitz (thinkprogress.org) / Aug 29 2018
American Media Inc. has been accused of burying stories negative of Trump that would have affected his standing ahead of the 2016 election.
Government officials in Ohio and New Jersey invested hundreds of millions of pension dollars in a high-risk hedge fund that controls the National Enquirer’s parent company, American Media Inc. (AMI), which offered to run interference for the Trump campaign during the 2016 election, burying stories that might negatively impact then-candidate Trump.
A new report by Capital and Main reveals the Ohio and New Jersey pension funds, under Republican Gov. John Kasich and former Gov. Chris Christie, poured at least $625 million into Chatham Asset Management between 2013 and 2014. The hedge fund purchased an ownership stake in AMI in the summer of 2014.
AMI recently became entangled in a federal criminal probe examining a series of hush-money payments between President Trump’s longtime lawyer, Michael Cohen, and women who claim to have had extramarital affairs with Trump. In August 2016 — just before the election — AMI paid one of those women, former Playboy model Karen McDougal, $150,000 for exclusive rights to her story, but ultimately buried it, preventing her from speaking out. (Cohen and Trump later discussed purchasing the story rights from AMI, but the deal fell through.)
Cohen pleaded guilty last week to campaign finance violations associated with a $130,000 payment to silence a different woman who says she had an affair with Trump, adult film actress Stormy Daniels. He also pleased guilty to several counts of tax and bank fraud associated with his taxi business. Cohen has said through his lawyer that he is prepared to cooperate with Special Counsel Robert Mueller, who is investigating allegations of obstruction and collusion by Trump and his associates.
Last week, the Wall Street Journal reported that AMI CEO David Pecker, who is close friends with Trump, had been granted immunity in Cohen’s case in exchange for his testimony on the matter. Pecker reportedly told prosecutors he had offered to “help keep quiet negative stories about Mr. Trump that might come to [his company’s tabloid], the National Enquirer” and that Trump knew about that deal when AMI paid McDougal $150,000 for her story.
Trump’s troubles mount as CEO of National Enquirer parent company, longtime friend granted immunity
Those legal woes could hurt AMI moving forward — and, by extension, public employees’ pension funds, former FEC commissioner Trevor Potter told Capital and Main this week. The outlet noted specifically that “if those legal troubles end up depressing the market value of AMI, teachers, firefighters, cops and other public employees also could potentially suffer losses at a time when their pension funds are already facing shortfalls.”
State union representative Tom Bruno, who helps oversee New Jersey’s pension investments and serves as chairman of the pension fund’s board of trustees, told Capital and Main this week that he was “appalled” by the news.
“If asked to vote, I can assure you I will be voting for us to divest,” he said. “I cannot talk on behalf of the entire SIC, but I will be doing everything in my power to convince a majority to vote the same way.”
Ohio pension investment officials reportedly did not respond to requests for comment on the matter.
New Jersey and Ohio were the only two public pension funds to invest in Chatham, Capital and Main reported. Several private funds, including those of Ford and Toyota Motors, also invested in the hedge fund.
According to the report, AMI represents a substantial chunk of Chatham’s investment portfolio, “compris[ing] 23 percent of the Chatham Asset Partners High Yield Fund’s portfolio.”
Several Chatham officials also serve as “directors” at AMI, the outlet noted.
