New Jersey rules require Republican Gov. Chris Christie's administration to cancel investment contracts with firms whose officials raise or donate money to the governor’s political campaigns. But his administration has paid more than $16 million in pension fees to the financial firm that was led by Christie’s chief fundraiser and top donor, Jon Hanson. 

The money -- far more than previously disclosed -- flowed to Hanson’s company, Prudential Financial, and its related funds that the state pension system has invested in. The new information, obtained through an open records request by International Business Times, comes as the Christie administration is facing a government investigation into whether it has fully disclosed all fees paid to financial firms -- some of whose executives have made donations to GOP groups backing Christie. 

That investigation follows a recently concluded “pay to play” probe of the state’s pension system, and comes as Christie must decide whether to sign or veto a bipartisan bill to strengthen the anti-corruption laws governing the state’s investments. The new investigation was launched last week in response to IBTimes reporting that showed a significant spike in disclosed fees in 2014.

'Enhanced Transparency'

New Jersey Treasurer Andrew Sidamon-Eristoff has said the higher fees reported this year were the result of a decision to publish performance fees, suggesting the public should “recognize that as enhanced transparency.” His statements -- and those of other Christie appointees -- suggest that the state had not acknowledged hundreds of millions of dollars in pension fees, despite state reports saying all fees were being disclosed. New Jersey statutes say that it is illegal “to make any untrue statement of a material fact or to omit” key details in financial statements about securities.

Tom Bruno, who chairs the pension’s board of trustees that is launching the probe, said the new Prudential numbers provided by the Treasury Department “validate the decision of the Board of Trustees to get to the bottom of this so that we might take the necessary measures to ensure the integrity of the Fund and its management.”

Last week, a study by an industry-friendly financial consulting firm showed that more than half of all fees that pension systems are paying to private financial firms are being hidden.

The new data about the fees paid by the Christie administration to Prudential Financial and its subsidiaries appears to exemplify that kind of discrepancy about disclosure.

New Jersey's pension system has invested in three Prudential funds, and one other fund that is part-owned by the company. Currently, the state has nearly a half-billion dollars invested in three of the funds. In response to the Philadelphia Inquirer’s request for all performance and management fees associated with those investments in Hanson's firm, Christie officials in September provided documents asserting that between 2010 and 2013, the state paid just $6.5 million in fees. But the documents just obtained by IBTimes show the state actually paid $13.8 million -- more than double the amount previously disclosed -- for those investments.

Christie’s office referred IBTimes’ request for comment on the new data to the New Jersey Treasury Department. Spokespeople there did not respond.

SEC Concern

In 2014, the Securities and Exchange Commission expressed concern about undisclosed fees being paid by institutional investors to private money managers. That followed the agency’s actions against the Christie administration for failing to adequately disclose financial information about the state’s pension systems.

A spokesperson for Hanson, who has reportedly been fundraising for a political committee to back Christie for a potential 2016 presidential campaign, referred questions to Prudential and Christie’s office. Hanson left Prudential's board in 2011.

The New Jersey State Investment Council’s rules say pension management contracts must be terminated if “any person associated with an investment management firm" raises funds for or donates to a governor's campaign. Prudential has asserted that even though Hanson served as the lead director of the company’s board until 2011, he wasn’t covered by those rules.

Scot Hoffman, a spokesperson for Prudential, reiterated Wednesday that “we have made all the disclosures required by the state.” Hoffman said that Hanson “was not an investment management professional employed by Prudential” and thus the firm did not have to disclose his financial support for Christie to the Investment Council.