YOU ARE HERE: LAT HomeCollections

Firm drops bid for L.A. pension funds

August 27, 2008|David Zahniser | Times Staff Writer

A Los Angeles investment firm has dropped its effort to secure up to $10 million from the city's primary pension agency, weeks after the city Ethics Commission opened an investigation into the company's managing partner.

Cardinal Americas had been trying for months to meet financial requirements that would allow it to tap money from the Los Angeles City Employees' Retirement Fund. But pension board President Eric Holoman said he received a letter from the company Monday abandoning that effort.

The Times reported last month that ethics investigators were looking at Robert Aguallo Jr., the pension system's recently departed top executive, who secured a job with Cardinal Americas weeks after the agency's board cast a vote benefiting that company.

Days after taking the job, Aguallo lobbied pension officials on behalf of his new employer. According to 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.

Attorney Fred Woocher, who represents Aguallo and Cardinal Americas, said his clients dropped their bid to show "they were not attempting to take advantage of any special relationship" with the pension agency, frequently referred to as LACERS. "They did not want LACERS to be put into the position where questions might arise about the fairness of LACERS' decision-making process," he said.

Asked whether Aguallo handled his job change appropriately, pension board President Holoman said: "That's not for me to determine.

"I don't have any feelings on it at all. It's going to play itself out," said Holoman, an appointee of Mayor Antonio Villaraigosa.

Cardinal Americas seeks to provide an investment return by putting money into companies that build public works projects. The pension board voted last year to commit up to $10 million to Cardinal Americas, as long as the fund, relatively new to Los Angeles, showed that it had raised $50 million from other sources. After company executives failed to do so, the board voted in February to give the company another six months, or until today, to find the money.


Los Angeles Times Articles