Political corruption is an insidious thing, a lot like swine flu or in this case flu among the swine.
For far too long, the political system in LA has been morally corrupt: Political money buys access, access begets favors. And after a while, the ethical line becomes so blurred that favors are sold outright and political money becomes expected. It’s what pay-to-play is all about.
The tentacles of the New York public employee pension fund scandal is reaching deeper into the LA political scene according to the Wall Street Journal which reports today that Julio Ramirez, a politically-connected operative formerly with Wetherly Capital, has “pleaded guilty to
securities fraud and is cooperating with the investigation, according
to people familiar with the matter.”
Ramirez, 48, of La Canada-Flintridge, pleaded guilty to a criminal misdemeanor
charge and is likely to face a civil complaint from the Securities
and Exchange Commission.
The charges stem from a series of fraudulent transactions with Hank Morris, central figure in the New York probe and long-time partner of top LA political consultant Bill Carrick,
They were part of a “national network of actors who often acted
in concert across the country” to help firms secure investments from
pension funds and allow agents to collect lucrative fees, according to the Journal.
“Both men acted as middlemen, or placement agents, who received payments
from private-equity and hedge-fund firms for helping secure contracts
to manage pension-fund money. At the heart of the case is concern
investment decisions regarding retirees’ money were guided by improper
The allegedly fraudulent transactions involved the Los Angeles-based placement
agent firm, Wetherly Capital Group, where Ramirez was a top manager, and Dallas-based
Aldus Equity Partners.
Wetherly has represented equity firms that got funds from the LA Fire and Police Pension Fund and Aldus advised the the fund’s board. Two directors of the fund — Sean Harrigan and Elliot Broidy — resigned after the SEC sought details of their personal financial dealings.
Ramirez and his wife, political fund-raiser Annette Castro, have given generously to local political campaigns over the years as has Wetherly.
A Wetherly spokesman told the Journal that in 2003, Ramirez recommended working with Morris to get pension business.
Wetherly, headed by Daniel Weinstein, paid Ramirez or his company
Ramirez Partners Inc., then Mr. Ramirez paid Mr. Morris. “Ramirez
informed us that this was how Morris wanted to be paid for his
services,” the Wetherly spokesman said.
New York Attorney General Andrew Cuomo alleges in the indictment that $313,750 in payments to Morris were “proceeds of criminal conduct” involved in a money laundering and kickback scheme.
The Journal said Wetherly “has come within the scope of
the investigation.” The company denies wrongdoing and it is cooperating in the investigation.
In 2004, Ramirez reportedly told Saul Meyer, founder of Aldus
Equity, that his firm also should hire Morris to get hired by the New York pension fund. Meyer is charged with security fraud in the case.
Ramirez worked for the Park Hill Group as a placement agent from 2005 until shortly after the scandal erupted. A spokesman for the private-equity firm Blackstone Group, which own Park Hill Group, said its own investigation found that Ramirez did not violate “our high standards of conduct or evaded
our rigorous controls.”
Clearly, this is just the tip of a scandal that could touch many others.
What’s not clear is whether Attorney General Jerry Brown will vigorously go after a pay-to-play scandal that reaches deep into the Democratic Party at a time when he’s seeking the party’s nomination for governor or whether District Attorney Steve Cooley will muster the energy and skill to conduct a thorough investigation.