The investigation into alleged activities by Markstone Capital Partners Group LLC founder and former chairman Elliott Broidy is spreading. After reaching a plea bargain on Thursday with New York State Attorney General Andrew Cuomo, over the bribing of state pension officials in exchange for investing $250 million of state pension money in the company. It now turns out that, since June, the US Securities and Exchange Commission (SEC) has been investigating possible ties between Broidy and former California Public Employees' Retirement System (CalPERS) CEO Fred Buenrostro and former Calpers board member Alfred Villalobos, among others.
The "Sacramento Bee" reports that, in June, the SEC subpoenaed CalPERS CEO Fred Buenrostro, Villalobos, and others.
In 2004, CalPERS pledged to invest $50 million in Markstone. The SEC subpoena is part of an investigation into suspicions that CalPERS's decisions were influenced by officials who were bribed. There is no evidence at this time that CalPERS's decision to invest in Markstone was made illegally. However, in the wake of Broidy's plea bargain in which he admitted to bribing New York State pension officials, CalPERS is reviewing its ties with Markstone.
The "Sacramento Bee" quotes CalPERS spokeswoman Pat Macht as saying, "Markstone is now included in the list of topics" being investigated, as well broadening its investigation into Villalobos and others. The Markstone investment has earned a 5%, according to CalPERS records.
The "Sacramento Bee" also quotes Broidy's spokesman, Jim McCarthy, as downplaying the significance of the subpoena Friday, saying it merely represents "questions that the SEC asked."
In Thursday's plea bargain, Broidy pleaded guilty to making almost $1 million in illegal payments to high-ranking officials at the New York State Comptroller's Office, which overseas the New York State pension funds, to persuade the officials to invest $250 million in Markstone. Broidy agreed to cooperate in Cuomo’s probe as part of the plea bargain, in exchange for a sentence of no more than four years in prison, a fairly light sentence under the circumstances. He will also forfeit $18 million of fees generated by the investment.
During the mid-1990s, Broidy, Shamrock Holdings president and CEO Stanley Gold, and Stanley Chais, a major donor to Israeli and Jewish charities, revitalized the California-Israel Chambers of Commerce.
Gold told the Jewish Telegraph Agency yesterday that he had known Broidy for some 20 years and worked with him on behalf of the local Jewish federation and Wilshire Boulevard Temple, as well as the California-Israel Chamber of Commerce. “Elliott has given freely of his time and energy to the community, of which he has been an outstanding member,” Gold said. “Our hearts go out to him and his family at this difficult time."
Gold added, “Elliott is a decent and good man. It is not my style to desert a friend in his hour of need.”
Published by Globes [online], Israel business news - www.globes-online.com - on December 6, 2009
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