Two of Los Angeles Mayor Antonio Villaraigosa's appointees to a city pension board resigned Thursday, one month after receiving a letter from the Securities and Exchange Commission asking them to identify income they had received from companies doing business with their agency.
Sean Harrigan and Elliott Broidy, members of the Los Angeles Fire and Police Pensions board, were asked to provide information to the SEC, which is investigating allegations of kickbacks at a New York state pension fund.
Harrigan said he left because the inquiry had caused his agency's board meetings to become increasingly disruptive -- and created "a frenzy of media activity" that had placed him in "the eye of the storm."
"While I have done nothing wrong, I recognize that this entire matter has become a huge distraction for all parties involved in the business of operating an $11-billion public pension system," he said in a statement.
Villaraigosa spokesman Matt Szabo said the mayor and his two board members agreed the resignation was "the best course of action."
Harrigan and Broidy had served on a nine-member board that oversees a $10.7-billion portfolio on behalf of retired police officers and firefighters. Both men had been asked to disclose their communications with firms under scrutiny in the New York investigation.
Broidy, the chairman of Markstone Capital, said in a statement that he was cooperating with investigators and had never profited in any way from the pension fund. He was originally appointed by Mayor James K. Hahn and reappointed by Villaraigosa.
The two resignations come a week after a third pension board appointee, Kelly Candaele, was asked by the mayor to quit the Los Angeles City Employees' Retirement System board after he participated in a campaign fundraiser for the city attorney campaign of City Councilman Jack Weiss -- in violation of city law.
Candaele hosted the event with two key figures at Wetherly Capital, a Los Angeles firm also mentioned in the SEC letters. Wetherly, known as a placement agent, pitches investment opportunities to public pension boards.
The Ethics Commission also has not concluded its investigation of Robert Aguallo, the former head of the agency where Candaele had served as a board member. Aguallo took a job with an investment fund that had sought business with his agency.
