Door appears to revolve too fast for ex-L.A. pension boss
Robert Aguallo Jr. starts his new private-sector job a day after leaving the city retirement fund. Under ethics laws, he is required to observe a one-year cooling off period.
The top executive at Los Angeles' largest municipal pension fund wasted little time last spring jumping from his government post to a private sector job -- one that required him to drum up business from agencies like the one he had just left.
On May 5, Robert Aguallo Jr. e-mailed his resignation to the chairman of the Los Angeles City Employees' Retirement System. The very next day, he sent another e-mail to the system's officials, but this time in his role as managing partner of Cardinal Americas, a Los Angeles-based company.
Aguallo expressed concern about the fees that the pension system planned to pay Cardinal Americas, which sought to make $10-million worth of investments on behalf of the city agency. "I want to have this revisited," Aguallo wrote to two officials who had reported to him a week earlier. Last month, The Times reported that the Los Angeles City Ethics Commission has been investigating Aguallo's move to Cardinal Americas, three months after the agency reaffirmed the $10-million deal. Under city ethics laws, high-level officials who leave for the private sector must observe a one-year cooling-off period, during which they are barred from directly attempting to "influence" a decision at their former agency.
The ethics probe comes as City Council members have voiced increasing concerns about a "revolving door" at other city agencies, such as the Department of Water and Power. Councilman Greig Smith, who has monitored pension issues while on the council's Budget and Finance Committee, said he was dismayed to see Aguallo lobbying the pension system within days of leaving it.
"It's a real abuse of trust for me. It stinks," said Smith, after reviewing the e-mails. "Whether there's a violation of the law, the city attorney will have to decide."
Mark Vargas, a spokesman for Cardinal Americas, said in a brief statement that Aguallo was responding to issues raised by the pension system's outside consultant. Aguallo "withdrew the e-mail shortly thereafter," Vargas said.
A request by The Times for all e-mails between Aguallo and pension officials between May 1 and May 15 did not produce such a document.
Aguallo took the job with Cardinal Americas three months after his agency made a decision favorable to the firm, which offers pension funds a way to invest in construction companies not traded on Wall Street. Sally Choi, Aguallo's replacement at the pension agency, would not discuss the e-mails, saying any potential improprieties "were referred to the Ethics Commission."
