CA: Pension board member directed funds to a firm with ties to his, documents show

LA Times ^ | 11/20/09 | David Zahniser

[NormsRevenge]

An appointee of Los Angeles Mayor Antonio Villaraigosa voted two years ago to direct millions in public pension dollars to a company that invested in his own private equity fund, according to documents obtained by The Times.

Elliott Broidy, chairman of Markstone Capital Partners, served until May on the Fire and Police Pensions board, which provides benefits to the city's retired police officers and firefighters.

Real estate company CIM Group invested $500,000 in Markstone's private equity fund in 2004, according to an e-mail to the city's pension agency. Three years later, Broidy voted with his colleagues on the pension board to commit up to $30 million to CIM's Fund III, which focuses on real estate.

The Securities and Exchange Commission asked Broidy in May if he had done business with any of the companies that have come before his board. In court documents filed two months ago, two SEC lawyers said they were trying to determine whether Broidy or others "engaged in a fraudulent scheme to extract kickbacks from investment advisors and/or their intermediaries in exchange for supporting proposed California public pension fund investments."

The SEC is one of several government agencies looking at investment decisions by public pension systems in California and elsewhere, which have been battered by investment losses in recent years.

In Los Angeles, officials familiar with the state's conflict-of-interest law remain unclear as to whether Broidy needed to recuse himself from the 2007 vote. CIM's investment in Markstone was comparatively small, representing only a tiny fraction of the $800-million fund.

[Bronco_Buster_FweetHyagh]

I’m shocked, shocked I tell you, to find out that a Liberal California politician abused his power for personal financial gain.