UPDATE: Pa. Gov. Tom Corbett will give a campaign donation from a state and city contractor that violated 'pay-to-play' rules to charity, Philadelphia Mayor Michael Nutter will return his to the donor.
EARLIER: The Securities and Exchange Commission says TL Ventures Inc., of Wayne, illegally collected hundreds of thousands of dollars in fees from the underfunded Pennsylvania State Employees' Retirement System and the still-more-underfunded Philadelphia city pension system, after a TL official gave money to political campaigns for top state and city officials in 2011. It's the first time the SEC has brought and settled charges under a 2010 ban on investment pros collecting fees for managing public funds so soon after donating to elected officials who oversee those funds.
The SEC did not identify the official who gave money or who got it, but state and city records show TL founder Robert Keith Jr. gave $2,000 to Pennsylvania Gov. Tom Corbett that fall, and $2,500 to Philadelphia Mayor Michael Nutter during the spring primary campaign that year, matching the amounts and dates cited by the SEC.
TL agreed to pay back $256,697 in pension fees it collected after funding the mayor and governor, plus interest and penalties totalling $38,197, the SEC said in a statement. TL also "agreed to be censured and to cease and desist from committing or causing any violations," the agency added.
"TL Ventures violated pay-to-play rules" by collecting those fees from the city and state within two years of the the political donations, the SEC said. Since Gov. Corbett appoints a majority of Pennsylvania's 11-member state pension board, and Mayor Nutter appoints 3 of 9 city pension trustees, both officials "can influence the hiring of investment advisers," and TL had no right to continue collecting fees as a state and city contractor so soon after giving those powerful politicians money, the SEC says.
Corbett plans to donate Keith's $2,000 "to charity," his campaign spokesman, Billy Pitman, told me after I linked the donation to his boss. Nutter plans to give it back to the donor: "People like Mr. Keith are governed by SEC restrictions and it’s the obligation of these donors to know the federal restrictions that are imposed on them. The Mayor’s campaign fund will return this contribution to Mr. Keith," said Nutter spokesman Mark McDonald after I asked if he would give the money up as Corbett did. (The Inquirer's Dylan Purcell and an Inquirer reader who tracks political money helped me confirm Keith funded the mayor's campaign.)