Fortune: N.J. sells stake in fund linked to Mass. Republican

TRENTON - The state Treasury Department has sold its stake in a venture-capital fund tied to a Massachusetts gubernatorial candidate who contributed to the New Jersey Republican State Committee, Fortune reported on Monday.

The State Investment Council's $15 million investment in a fund managed by General Catalyst Partners is the subject of an audit commissioned by the Treasury Department in May.

Prompted by a report by the website PandoDaily, the department's chief auditor was asked to determine whether the investment had violated New Jersey's pay-to-play laws, which prohibit the department from investing in a fund whose investment managers have donated to state political parties or committees in the preceding two years.

A Treasury spokesman said the department would not comment until after Tuesday's scheduled meeting of the State Investment Council, which oversees management of New Jersey's $77 billion pension fund. Citing an unnamed source, Fortune reported that New Jersey sold its stake for 1.5 times the cost.

The state agreed in 2011 to invest in the venture-capital fund, just months after Charles Baker, an executive-in-residence at General Catalyst, contributed $10,000 to the New Jersey GOP.

Gov. Christie, a Republican, had campaigned for Baker when he first ran for governor of Massachusetts in 2010. Baker lost that race to Gov. Deval Patrick and is now running to succeed him.

General Catalyst has said nothing was wrong with the investment or contribution. The firm says Baker is not involved in investment management decisions. A spokeswoman for the firm did not immediately respond to a request for comment.

The Baker campaign has said his donation was transparent and permissible.