The New York Times is reporting today that in exchange for Attorney General Andrew Cuomo ending his investigation into the Carlyle group’s pension fund contracts, the business has agreed to eliminate the use of placement agents – paid intermediaries who essentially use their high-level relationships to match-make between pension funds and investment firms.

The Carlyle group also agreed to limit contributions to politicians. And, they’re going to pay a $20 million fine.

More importantly,

In addition, the settlement could bring new urgency to the Securities and Exchange Commission’s deliberations about whether to bar investment firms and their executives from making campaign contributions to officials who oversee public pensions. Carlyle, which over the years has employed former President George H. W. Bush and a former British prime minister, John Major, manages $1.5 billion for the New York State pension fund, and is one of the fund’s largest outside investment managers.

More on the settlement,

While the Carlyle agreement will prohibit the firm’s executives and their relatives from making campaign contributions to comptrollers or other officials charged with overseeing pension funds, there is an exception: Donations up to $300 will be allowed, so long as the donors can vote for the officials they are giving to and are not directing money to campaigns in faraway states, as investment executives have often done.

The deal also calls for Carlyle to disclose contributions made to other politicians in any state in which it does pension business.

And Cuomo tells it like it is,

Orin S. Kramer, a hedge fund manager who is chairman of the New Jersey State Investment Council, said Thursday that the agreement was a step in the right direction, but questioned an outright ban on intermediaries, saying, “There is an argument that one can preserve the valuable economic function of placement agents and have reforms that knock out political fixers.”

Mr. Cuomo had a different view. “If Boss Tweed were alive today,” he said, “he would be a placement agent.”