Responding to investigations into pension systems in New York and elsewhere, a Los Angeles pension agency voted Thursday to require any company seeking business with its board to disclose campaign contributions it has made to city political candidates.
On a 6-0 vote, the Fire and Police Pensions board approved a policy demanding quarterly statements that spell out the political donations made by such companies, as well as their paid representatives, their employees and their employees' family members.
The policy will go into effect immediately, said Mike Perez, the pension agency's general manager. "We believe it is important to shine the sun on relationships that might interfere with our ability to properly manage this pension system," he said.
Campaign contribution reports are already submitted to the city's Ethics Commission by the city's candidates. Still, those reports do not name the city agency where a political donor hopes to secure a contract or other financially favorable decision.
The policy follows allegations of kickbacks at the New York State Common Retirement Fund by New York Atty. Gen. Andrew Cuomo and the Securities and Exchange Commission.
Part of that case deals with campaign contributions that were secured by former Comptroller Alan Hevesi, the elected official who supervised that fund.
In Los Angeles, two pension board members quit their posts earlier this year after receiving inquiry letters from the SEC asking them if they had contact with three firms under scrutiny in the New York probe. Board members Sean Harrigan and Elliott Broidy, both appointees of Mayor Antonio Villaraigosa, said they had committed no wrongdoing but considered the inquiry to be a distraction.
Villaraigosa picks five out of nine members of the Fire and Police Pensions board and four out of seven members of the Los Angeles City Employees' Retirement System.
At the same time, he regularly raises money from companies and individuals that have sought or received city pension investments.
Last year, Villaraigosa held a reelection fundraiser in Texas that was co-hosted by Henry Cisneros, executive chairman of the real estate fund CityView. Over the last three years, the two city pension agencies voted to invest up to $50 million in CityView.
CIM Group, a real estate firm whose funds have received commitments of up to $115 million from the two pension agencies, co-hosted a Sept. 29 fundraiser for Villaraigosa at its Hollywood headquarters.
Although the company did not directly give to the mayor, such an event would need to be disclosed to the pension agency in the future, Perez said.
The mayor is not the only politician to rely on such contributors. Former City Atty. Rocky Delgadillo, City Controller Wendy Greuel and most members of the City Council also accept donations from pension-based companies.
With an $11.9-billion investment portfolio, the Fire and Police Pensions System delivers benefits to the city's retired police officers and firefighters.
The new campaign donation reports will not be required by the City Employees' Retirement System, which decided earlier this year to focus primarily on disclosure by "placement agents," firms and individuals that promote a specific investment proposal.
The new disclosure policy at Fire and Police Pensions also will require disclosure of any gifts given to pension board members by companies holding contracts with the agency, or any donations made to a charity at the behest of a board member or city candidate.
Thursday's vote drew praise from the head of the Police Protective League, the union representing LAPD officers.
"Anything that makes the pension system more transparent to the public and to our membership is a move in the right direction," said league President Paul Weber.