Audit: Massachusetts Gov. Didn’t Violate Pay-to-Play Rules With Donation That Preceded Pension Investment

shaking hands

In 2011, Massachusetts Gov. Charlie Baker donated $10,000 to the New Jersey Republican State Committee.

Less than a year later, New Jersey committed $25 million in pension money to General Catalyst Partners for management – the firm where Baker was an executive.

The transaction raised the red flags of a pay-to-play violation.

But an audit released yesterday cleared Baker of any wrongdoing.

From the Associated Press:

A New Jersey treasury audit has found Massachusetts Gov. Charlie Baker did not break pay-to-play rules when he donated to Republicans here in 2011.


New Jerseys regulations bar the state from investing with a firm whose managers made political contributions within a two-year window. The audit says while Baker was an investment professional, he did not provide the kinds of services the policy prohibits.


The audit also suggests Baker and General Catalyst forcefully resisted the possibility of any wrongdoing. For example the firm wrote to the auditor in May 2014 that “Mr. Baker has never been an executive officer, owner or other control person of GC and has never solicited investors when GC raised funds.”

Baker himself hired the law firm Covington & Burling, which expressed a similar view, the audit said.

While the report recommends the state should consider strengthening its due-diligence procedures, the audit said the State Investment Council, the body that sets investment policy, reported it met those standards.

The audit was released and presented at the Thursday meeting of the State Investment Council.


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Timothy Geithner To Speak at New Jersey Pension Meeting

New Jersey

Ex-U.S. Secretary of Treasury Timothy Geithner will speak at Thursday’s meeting of the New Jersey State Investment Council, the entity that oversees the state’s pension investments.


Geithner is president of private equity firm Warburg Pincus, which counts New Jersey as a client.

“It’s an important relationship for them, and it’s certainly an important relationship for us,” said Tom Byrne, vice chairman of the investment council.

Watchdogs are hoping the meeting will also mark the release of a long-awaited audit into the potential pay-to-play violations of Charlie Baker.


Seven months before the state decided to invest $15 million from its pension fund with the firm General Catalyst, which listed Baker as an “entrepreneur in residence,” Baker had donated $10,000 to the New Jersey Republican Senate Committee. The state has since sold its investment with the firm.

The results of the audit have been delayed for months. The investment council announced the audit in May, saying it was expected to take several weeks.

The meeting agenda can be read here.