Alden Global Capital, the New York-based hedge fund that controls The Denver Post and more than 100 other newspapers, is being investigated by the U.S. Department of Labor over its management of employee pensions, according to a Washington Post report.

Alden — whose papers also include the Boston Herald, Orange County Register of Irvine, Calif., and Mercury News of San Jose, Calif., all of which are operated through the hedge fund’s MediaNews Group — moved nearly $250 million of employee pensions into its own accounts in recent years, “an unusual move that is triggering federal scrutiny,” a Washington Post story said this week.

In some cases, Alden moved 90 percent of retirees’ pensions into two funds it controlled, the Post reported, citing Labor Department public records. Most of the money, however, now has been moved out of the funds, the Post story added.

“Federal law generally requires that pension managers avoid conflicts of interest and avoid taking excessive risks with the assets they manage, experts said, though some exemptions are allowed,” according to the Washington Post.

The newspaper’s story said an Alden spokesman confirmed the hedge fund is being investigated by the Labor Department for management of its pensions.

“The specific nature of the investigation is unclear, but one person familiar with the agency’s inquiry, speaking on the condition of anonymity because the investigation is confidential, said the department issued subpoenas to Alden and its partners last year,” the Post story said.

The Labor Department’s investigation could become a factor in Alden’s attempt to acquire McLean, Va.,-based Gannett, the nation’s largest daily newspaper chain whose holdings include USA Today, The Coloradoan of Fort Collins and many others, according to the story.

New York Democratic Sen. Charles Schumer, the Senate’s minority leader, has raised questions about Alden’s decisions regarding the management of its pensions, the Post said.

Alden and the Labor Department declined to comment to the Post for its story. A spokesman for MediaNews Group told the newspaper that Alden’s management of pension assets “complied with all legal requirements.”

Alden has gained a reputation for slash-and-burn tactics in its acquisition of newspapers — laying off employees, selling newspaper buildings and other assets in a money grab and showing little regard for the communities the papers serve.

In April of last year, a Denver Post editorial attacked its hedge fund owner as “vulture capitalists” and urged Alden to sell the newspaper — a move that made national headlines and put a spotlight on Alden.

The editorial came after a round of layoffs that reduced the Denver Post’s newsroom staff by one-third to about 60 people.

Business writer, Colorado Springs Gazette

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