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Political power player Darius Anderson under scrutiny related to pension deals

August 27, 2010 |  4:24 pm

Darius Anderson is a well-known player in the high-powered and often-overlapping worlds of California business, lobbying and politics.

No stranger to campaign finance, he’s raised millions of dollars for candidates over the years, mostly for Democrats. Citing that expertise, state Fair Political Practices Commission Chairman Dan Schnur appointed Anderson this week to a prestigious panel that will examine overhauling state campaign finance disclosure laws.

Anderson, 45, brings a “valuable perspective” to the panel because of his “professional work as a practitioner” and as a fundraiser and lobbyist, Schnur said.

Others aren’t so sure it was a good choice.

Anderson and his Sacramento lobbying firm, Platinum Advisors, recently paid $500,000 to settle claims by New York Atty. Gen. Andrew Cuomo stemming from a yearlong investigation into so-called pay-to-play practices in city and state pension fund investment partnerships.

And federal and California law enforcement officials also have looked into Anderson’s role as broker of public pension deals, though he has not been accused of any wrongdoing.

“The appointment certainly raised my eyebrows, and upon hearing further details, it raises questions in my mind,” said Derek Cressman, the western regional Director for Common Cause. “I think we need to pay close attention to the role he plays on this commission.”

Anderson through a spokesman declined to comment either on the reported probe by state Atty. Gen. Jerry Brown or on his appointment to the 25-member task force formed by the Fair Political Practices Commission.

Schnur said he was “aware of the investigation” in New York and inquiries about Anderson made by California attorney general’s lawyers. Anderson, he noted, has not been charged with any wrongdoing in either state. He said that the goal of the selection process was “to establish a task force that was balanced between those who had devoted their time as political reformers and those who had worked in the field of practical politics.”

Anderson’s influence is felt in political, business and philanthropic circles in Sacramento, San Francisco and Los Angeles.

He chairs the National Advisory Board of the Institute for Governmental Studies at UC Berkeley. In 2007, he and his wife contributed $250,000 to the political think tank.

According to a biography on the institute’s Internet site, Anderson “is widely recognized as one of California’s most effective political strategists and fundraisers” and “continues to advise many of California’s highest-ranking political and business leaders,” including Brown, U.S. Sen. Dianne Feinstein and Los Angeles corporate executives Ron Burkle and Eli Broad.

Anderson’s real estate development projects include Treasure Island in San Francisco and the Marketplace at Anaheim.

In the private equity field, Anderson brokers pension fund investment deals using two companies, Platinum in Sacramento and Gold Bridge Capital in San Francisco. The firms have served as so-called placement agents.

Such financial middlemen often earn big commissions by helping investment managers tap into millions of dollars of capital held by the $200-billion California Public Employees’ Retirement System and other public pension funds.

According to disclosures filed with CalPERS, Anderson’s companies collected $787,500 in placement agent fees from investment managers who did business with the California pension fund from 2003 to 2005.

Anderson also served in a similar role for private equity funds that partnered with retirement systems in New York and other states, earning at least $5.2 million in commissions.

The pay-to-play investigations, which cover such issues as payments and gifts to public officials as well as fat commissions for placement agents, began in New York state two years ago and has since spread to California and other states.

Cuomo alleged that Anderson and Platinum acted as an unlicensed broker in 2004 to win investments for a Los Angeles private equity fund. Neither Anderson nor Platinum admitted any wrongdoing. As part of the settlement, Anderson agreed to submit to a code of conduct that bans the use of hired go-betweens in seeking investment management agreements with public pension funds.

In May, Brown sued Alfred J.R. Villalobos, a former CalPERS board member and current placement agent, on fraud allegations tied to his receipt of more than $40 million in commissions from investment partnerships for deals at CalPERS. The suit also named as a defendant Federico Buenrostro Jr., a former CalPERS chief executive.

Meanwhile, the CalPERS board, the state controller and the state treasurer are backing legislation that would limit gifts to state pension officials and require placement agents be regulated as lobbyists by the FPPC.

The California attorney general’s office won’t say if it’s actively investigating Anderson or his companies. But The Times, citing sources close to the investigation, reported in May 2009 that Brown had subpoenaed documents from Gold Bridge Capital.

More evidence of investigators’ interest in Anderson surfaced at a July 27 legal deposition where a senior CalPERS investment officer, Leon Shahinian, testified under oath that he was questioned by state and federal authorities about his ties to the placement agent.

During a midwinter, daylong session with lawyers from Brown’s office and the U.S. Securities and Exchange Commission, Shahinian said he was quizzed about Anderson’s activities as a placement agent in connection with various public equity deals at CalPERS.

Shahinian testified that he also told investigators about a dinner he attended at Anderson’s home and a mixed-martial arts bout at a Sacramento sports arena he attended with Anderson or his brother and business associate, Kirk Anderson, though he couldn’t remember which one.

Shahinian was named but not listed as a defendant in the state’s lawsuit against Villalobos. The complaint detailed an unreported, free luxury trip he took to New York with Villalobos in 2007 to attend a black-tie gala at the Museum of Modern Art honoring Leon Black, the founder of Apollo Global Management. Shahinian later recommended that CalPERS buy a $600-million stake in Apollo, a deal that netted Villalobos $13 million in fees.

Shahinian, who had been on paid administrative leave at CalPERS since May, resigned Thursday.

-- Marc Lifsher

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