NEW YORK — A California venture capitalist pleaded guilty Thursday to charges that he helped his company land a quarter-billion dollar deal with New York's giant public pension fund by making nearly $1 million in illegal gifts to state officials.
Markstone Capital Partners chairman Elliott Broidy entered the plea in a Manhattan courtroom Thursday morning. He admitted to a felony charge of rewarding official misconduct.
Broidy is the latest in a string of private equity executives and investment advisers charged in connection with New York Attorney General Andrew Cuomo's investigation of a pay-to-play scandal in the office of former state comptroller Alan Hevesi.
Cuomo, though, said Broidy's case expands the probe in a different direction.
Four high-level officials in the comptroller's office, he said, accepted gifts or other lucrative benefits from Broidy.
"This is an old fashioned payoff of state officials," Cuomo said. "This is effectively bribery of state officials, and not just one, but a number of state officials in the comptroller's office."
Only one has already been charged in the case, the pension fund's former chief financial officer, David Loglisci.
Cuomo declined to name the three others, saying the investigation was not yet complete.
The gifts, the Attorney General's office said, were lavish.
One official had Broidy funnel payments of $90,000 to his girlfriend to cover rent and hospital bills, plus another $44,000 in payments to the girlfriend's relative.
Another state official was rewarded indirectly when his relative was given a "sham" consulting contract worth more than $380,000.
Broidy paid for a "very high ranking" senior official in the controller's office to travel with his family to Israel and Italy on a luxurious trip that included helicopter tours. The vacation cost $75,000, the attorney general's office said.
Broidy also put up $300,000 that was ultimately invested in the movie, "Chooch," an obscure independent film set in Mexico and Queens produced by Loglisci's brother.
The movie was financed with contributions from a number of businessmen trying to land investments from the state pension fund, valued in May at $109.9 billion. It was distributed on DVD by a company owned by the Quadrangle Group, the private equity firm founded by Steven Rattner, now the former head of the Obama administration's auto industry task force.
A Broidy spokesman, Christopher Clark, said in a written statement that his client "regrets the actions that brought about this course of events, but is pleased to have resolved this matter with the NYAG and will be cooperating in the ongoing investigation."
He said Broidy has resigned from all operational and supervisory roles at Markstone, one of the largest private equity firms in Israel.
As part of his plea bargain, Broidy has agreed to forfeit $18 million. He was freed on bail after entering his plea Thursday and will be allowed to travel, with restrictions. He could get up to four years in prison, but his cooperation could lead to a lighter sentence.