Metro

Liu chooses & biz ‘abuses’

Comptroller John Liu (above) awarded $6 million of city pension money for investment to scandal-scarred State Street Corp., which was accused of ripping off two states.

Comptroller John Liu (above) awarded $6 million of city pension money for investment to scandal-scarred State Street Corp., which was accused of ripping off two states. (William Farrington)

Comptroller John Liu has awarded $6 million in contracts to manage city pension funds to a firm under investigation by New York federal and state prosecutors over claims it ripped off millions from public-employee pension systems around the world, The Post has learned.

Boston-based State Street Corp. has faced litigation from state governments in Washington and California, as well as the United Kingdom, dating back to 2009 — each alleging the company fraudulently overbilled their retirement funds during so-called “foreign exchange” trades.

But that didn’t stop Liu from doing business with the company — his administration disclosed the contract in Friday’s public record.

His office awarded three contracts totaling $6.141 million to State Street Global Advisers, the company’s investment arm, the public notice said.

In 2010, State Street forked over $12 million to settle claims by the state of Washington over accusations the firm overcharged for its foreign-investment transactions of pension money over a 10-year period.

And in 2009, the California attorney general filed suit, saying State Street committed “unconscionable fraud” and “raided” $56 million from its pension funds over eight years. That case is pending.

State Street — without being sued — was also forced to reimburse several pension funds in Great Britain after reports surfaced of double billing.

With that history, State Street disclosed in a filing last month with the Securities and Exchange Commission that Manhattan US Attorney Preet Bharara and state Attorney General Eric Schneiderman are now breathing down its neck to determine whether New York pension funds and other clients were bilked.

“The New York attorney general and the United States attorney for the Southern District of New York, each of which have brought indirect foreign-exchange-related proceedings against one of our competitors, have made inquiries to us about our indirect foreign-exchange execution methods,” State Street admitted in the documents.

A Post review of 2011 pension reports found that other companies that fall under the State Street umbrella received millions in pension investment and advisory fees from at least two of the city’s pension systems, NYCERS and TRS.

It’s unclear whether the most recent award is a new contract or a renewal of an existing contract.

Sources said it was perplexing Liu and the pension boards would award new contracts to State Street.

“Did anybody in the comptroller’s office review the scandal?” asked one source. “How can John Liu give pension contracts to a manager accused of defrauding public pension funds?”

A Liu spokesman said, “After appropriate due diligence, the [pension] boards unanimously selected this manager.”

State Comptroller Tom DiNapoli’s office said State Street does not have a contract with the pension system he oversees.