Former state Sen. Richard Polanco is being sued over $25,000 he borrowed from the late Alfred Villalobos, the Nevada businessman implicated in the CalPERS bribery scandal.
Polanco, the onetime chairman of the Legislature’s Latino Caucus, is being sued by the court-appointed trustee overseeing Villalobos’ bankruptcy case. The trustee, Christina Lovato, is demanding that Polanco return the $25,000 he borrowed from Villalobos in May 2008.
“Defendant Polanco agreed to repay the loan upon demand,” according to the complaint, filed in U.S. Bankruptcy Court in Reno last month. “Although demand has been made, the loan has not been repaid.” The money would be distributed to Villalobos’ various creditors.
A Los Angeles Democrat, Polanco couldn’t be reached for comment Wednesday. He went to work for Villalobos after retiring from the Legislature in 2002.
Villalobos was a “placement agent” who earned tens of millions of dollars in commissions helping private-equity firms obtain investments from the California Public Employees’ Retirement System.
Records released by CalPERS show that Polanco and another retired senator, Bill Campbell, helped Villalobos’ firm obtain a $520 million investment from Wall Street powerhouse Apollo Global Management in 2005. Apollo paid the Villalobos firm a $10 million commission. It wasn’t known how much Polanco and Campbell were paid for their work.
Villalobos was later charged with bribing then-CalPERS Chief Executive Fred Buenrostro to influence the pension fund’s investment decisions. Polanco and Campbell weren’t charged with any wrongdoing.
Buenrostro pleaded guilty last summer to accepting bribes and is expected to receive a five-year prison term when he is sentenced in May in U.S. District Court in San Francisco. Villalobos, who pleaded not guilty, was found shot to death in Reno in January in an apparent suicide. His death came a month before his scheduled trial.
Villalobos disclosed in a 2010 bankruptcy court appearance that he had loaned the money to Polanco, but didn’t say why.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.