For months, the rumor mill has heated up over possible federal investigations of various individuals inside City Hall’s narrow political culture.
There was nothing to back them up until now.
David Zahniser and Walter Hamilton of the LA Times posted a story this afternoon about two LA city pension fund officials getting “informal” inquiries from the Securities and Exchange Commission’s enforcement division asking them “to produce information on their sources of income
since Jan. 1, 2005, including their bank and brokerage accounts.”
The letters to Sean Harrigan and Elliott Broidy, who serve on the Los Angeles Fire and Police Pensions board, were dated April 7, two weeks before news broke in New York about the LA and California links to pension fund kickback scandal.
Pro Publica reported Tuesday that the prominent LA investment firm, Wetherly Capital Group, allegedly “funneled $314,000 in checks to indicted political consultant Hank Morris through an
intermediary firm he owned. Wetherly received up to $3 million in fees
for one pension deal in New York, investigators say.”
The indictment described the checks from Wetherly as
“proceeds of criminal conduct.”
Morris, longtime partner with top LA Democratic political consultant Bill Carrick, is accused of taking millions in kickbacks from firms seeking to invest assets from New York’s $122-billion public pension fund
between 2003 and 2006.
Daniel N. Weinstein, a top Democratic fundraiser, founded Wetherly in 2001, the same year Carrick was guiding James Hahn’s successful campaign for mayor.
Wetherly allegedly shared fees with Morris’ firm, Searle & Co., for helping a private equity firm seal three
multimillion dollar deals with CALPERS and LA’s two city pension funds, LACERS and the LAFPP, Pro Publica reported. The firm is not charged.
The Times story said the SEC asked Harrigan and Broidy “to identify any source of income
greater than $10,000 since 2005 and any document showing communications
they have had with four companies — Aldus Equity, Wetherly Financial,
StepStone Group and Pension Consulting Alliance Inc. — or
representatives of those companies.” The companies have been involved in investing LAFPP assets.
“For purposes of this request, ‘document’ includes, but is not limited
to, memos, letters, e-mails, reports and notes of conversations,” the
SEC letter states.
“Because the facts acquired as a result of this inquiry may be
considered for possible enforcement action by the commission or other
law enforcement agencies, you may wish to consult with your attorney
with respect to this matter.”
Both men were appointed to the board by Mayor Antonio Villaragosa, Broidy previous servingly as Hahn appointee.
The Times said Wetherly hired Harrigan to perform consulting work in 2006,
according to city Ethics Commission documents. Harrigan recused himself
on a vote regarding LA real estate firm CIM Group, a Wetherly client, a year later.
The Pro Publica article is rich in detail and a lot of other LA names come up.
It’s hard to say where all this will go but my journalistic instinct is this story has legs and given the fact the feds are involved and indictments issued it pays to read up on it if you want to be an informed citizen