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Subpoena in pension fund probe puts spotlight on Sacramento lobbyist

Darius Anderson's firm is among dozens summoned by New York investigators probing the dealings of pension funds, including CalPERS, with money placement agents.

May 07, 2009|Evan Halper and Michael Rothfeld

SACRAMENTO — In 2005, California real estate mogul Terry Fancher wanted to entice public pension systems to place hundreds of millions of dollars in investment funds he managed.

Bypassing seasoned Wall Street advisors such as Morgan Stanley or Credit Suisse First Boston, he turned to Darius Anderson, a young and ambitious Sacramento lobbyist known in the Capitol for his political connections and fundraising prowess. Anderson was good for Fancher, who ultimately won commitments to manage at least $650 million in public retirement money from New York and California.

The arrangement worked for Anderson too. On three deals as a placement agent for Fancher -- setting up meetings, making pitches to pension fund staff, making political donations along with Fancher to the right elected officials -- Anderson and his partners netted more than $5.2 million, records from both states show. The scale of those earnings dwarfed what Anderson, 44, made from operating one of Sacramento's highest-profile lobbying shops or raising money for former Gov. Gray Davis.

Anderson's San Francisco-based placement firm, Gold Bridge Capital, is among dozens subpoenaed last week in New York as part of an investigation involving public retirement funds from coast to coast. Authorities allege that some brokers' payments were diverted as kickbacks to pension officers and their associates. David Loglisci, the New York deputy comptroller who signed off on Fancher's first deal, has been indicted on bribery, money laundering and other charges in a kickback scheme related to other investments.

Neither Anderson nor Fancher has been accused of wrongdoing.

But arrangements like theirs are coming under increasing scrutiny from investigators and financial watchdogs, who ask whether agents like Anderson are getting paid for their high-finance expertise or political access.

"You have to ask the question whether this guy has substantial experience in pension and investment matters," said Edward Siedle, president of Benchmark Financial Services, which helps pension funds investigate abuse.

At the center of the investigation are political and governmental aides to New York's former comptroller, Alan Hevesi, the trustee of its pension fund, who left office in December 2006 in a cloud of scandal. New York Atty. Gen. Andrew Cuomo, who issued last week's subpoenas, has said that many agents who did business with the New York pension fund were not properly licensed.

Regulatory records show that Anderson's license to work as a placement agent was approved in New York in March 2007, almost a year after his company earned a $2.25-million placement fee for its work there with Fancher. Anderson and Fancher contributed $75,100 to Hevesi's reelection campaign through companies they controlled in late 2005 and mid-2006, when New York State's Common Retirement Fund awarded its first investment of $150 million to Fancher's Stockbridge Capital Partners.

Anderson did not respond to an interview request. His brother and partner, Kirk Anderson, issued a statement from their company.

"We work diligently to ensure that we always comply with the relevant business laws in the states where we operate," the statement said. "We are confident that once we have the opportunity to fully answer questions surrounding our involvement, in any transaction, all parties involved will be satisfied that we adhered to the rigorous business standards in this area."

Fancher, who declined to comment, is a wealthy and politically active developer. He manages and is a partner in firms that own two horse-racing tracks, Hollywood Park in Inglewood and Bay Meadows in San Mateo, Calif., and a Las Vegas casino.

He has boasted of spending millions on lobbyists and political contributions to boost the state's flagging tracks, telling members of the California Horse Racing Board in late 2006 that he assisted legislative leaders so they could provide campaign money for political candidates friendly to the industry and "take out" its foes.

"They needed help financially with these races," Fancher testified. "Who stepped up? We stepped up. We wrote the checks."

Pension funds have generally been reluctant to make public the agents' activities.

The New York fund long kept secret the size of payments to Anderson, revealing them only last month amid the growing scandal.

At the California Public Employee Retirement System, the country's biggest pension fund, officials said they were unaware whether Anderson had a role in the tens of millions of dollars the fund invested with Fancher. CalPERS real estate investment manager Ted Eliopoulos said in an interview in August -- a few weeks after he was invited to a wine tasting at Anderson's Sonoma Valley Ranch, according to an invitation reviewed by The Times -- that the fund had no such records.

This week, with the national probe growing, CalPERS furnished a list of placement agents doing business with the fund that showed Anderson's firm was a placement agent on the Stockbridge deal. CalPERS officials said they did not track agents' fees.

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evan.halper@latimes.com

michael.rothfeld@latimes.com

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