Pay-to-Play Pension Scandal Hits California

Broidy's admissions were the latest development in a series of state and federal inquiries into how public employee pension funds, including the massive CalPERS, reach decisions on how to allocate their funds among private investment firms. Broidy's company, for example, has received $50 million from CalPERS.

Over the last decade, Broidy and his wife, who are longtime national and state fundraisers for the Republican Party, have made some $900,000 in campaign contributions to officials who were seeking or held statewide political offices at the time, including two Calpers board members.

CalPERS spokesman Brad Pacheco told the Times, the pension fund is reevaluating its partnership with Markstone, Broidy's venture capital firm, which specializes in Israeli investmens.

Broidy -- who stepped down in the spring as a board member of the Los Angeles Fire and Police Pensions fund after receiving inquiries from the U.S. Securities and Exchange Commission -- also has agreed to cooperate in a widening federal probe of corruption in public pension investments--an investigation which began in New York, but now includes inquires about practices among California state pension funds.