Elliot Broidy, a venture capitalist who is a major fundraiser for the Republican party – and a major player in the Jewish philanthropic scene – is under investigation by the SEC for a possible pension fund scandal, according to the Wall Street Journal.
From the WSJ:
Elliott Broidy is being questioned by the agency about what it calls "possible violations" of federal securities laws as part of its investigation of allegations that investment firms made improper payments to secure lucrative business from public pension funds.
The SEC said in the documents that Mr. Broidy repeatedly failed to respond to requests and subpoenas for bank and other records.
Mr. Broidy hasn’t been charged with wrongdoing.
Broidy has raised hundreds of millions of dollars in private equity for enterprises in Israel, according to a 2006 story in the Los Angeles Jewish Journal, pooling nearly $800 million for Israeli business ventures through his Markstone Capital Group.
From the Jewish Journal:
Thus encouraged, Broidy established Markstone Capital Group and set a goal of raising $500 million. That ambition "was met initially with great skepticism" in Israel and the United States, Israeli financial analyst Guy Rolnik observed in retrospect.
"But the dubiety is being replaced by awe…. It is a major triumph," Rolnik wrote recently.
The analyst predicted that the infusion of large equity funds could "democratize" the Israeli economy by possibly ending the long dominance of 10 large Israeli family-based investment groups, which traditionally cut all the big financial deals in the country.
Broidy’s first prospect was New York State Comptroller Alan Hevesi, and after several months of vetting Broidy’s proposal and meetings with Israeli business and political leaders, the New York State Common Retirement Fund signed on for $200 million.
On the other coast, the California Public Employees Retirement System (CalPers) put in $50 million, and additional amounts came from similar funds in Oregon, New Mexico, North Carolina and New York City.
"Broidy did a remarkable job in assembling such a group of diverse investors," said Richard Gunther, himself a major investor in Israel who also has a stake in Markstone.
Beyond that, he has given generously to a number of Jewish causes, including the Hillel at his alma mater, USC, and the Hebrew Union College, according to the Web site GreatJewishAmericans.com.
He has also created a $500,000 endowment at USC to provide two scholarships a year to Israeli students, according to lagives.org.
Broidy is cooperating with the SEC, his spokesman told the WSJ:
"Mr. Broidy has been cooperating diligently from the very outset," said Jim McCarthy, a spokesman for Mr. Broidy. "He has produced more than 38,000 pages of documents and reviewed hundreds of thousands more. He will certainly meet with the SEC, but to do that before the document production is complete would be premature and fundamentally unfair."