A California financial company on Wednesday agreed to repay $2 million to New York state's giant public pension fund after one of the company's former partners was implicated in paying a kickback to secure investment deals from the fund.
Pacific Corporate Group Holdings LLC of La Jolla agreed to make the payment under a settlement deal reached with New York Attorney General Andrew Cuomo.
In exchange, New York agreed to drop all criminal and civil charges against the firm, Cuomo said in a news release.
A PCG partner who set up the kickback payment to a top political aide of former New York comptroller Alan Hevesi – in charge of the N.Y. pension fund – was not named in the settlement agreement, which said he no longer works at the La Jolla firm. PCG also agreed to adopt a code of conduct that bans using placement agents or consultant intermediaries to help secure pension fund investments – deals that are now part of an expanding national pension fund corruption probe.
"We are taking these steps to make the public whole for the improper actions of a former executive, to put this episode behind us and to move our business forward," the company said in a statement.
Cuomo said PCG has done consulting work for the California Public Employees' Retirement System, the nation's largest public pension fund.
PCG researches possible investments for public pension fund clients nationwide, evaluating whether proposed investments are suitable for public retirement funds. It also manages private equity deals itself.
Between 2001 and 2005, Pacific Corporate pumped $33,000 into a union campaign fund that The Bee recently linked to former CalPERS board member Sean Harrigan, a long-time leader of the United Food and Commercial Workers union.
Harrigan said he asked two dozen firms doing business with CalPERS to donate to his union fund, but denied it was a pay-to-play scheme.
Call The Bee's Andrew McIntosh, (916) 321-1215.
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