Republican gubernatorial candidate Charlie Baker has gotten his name and face splashed over the news outlets, from one corner of the state to another — except it’s in New Jersey and it’s all swept up in the political scandal that is engulfing his political ally, Governor Chris Christie.
Baker’s new-found notoriety in the Garden State came to a head when the New Jersey State Investment Council agreed to seek a legal review of the $10,000 donation he made to the New Jersey GOP in May 2011 — just seven months before General Catalyst, the investment firm where he is listed as an “executive in residence” principal, received $15 million from the state’s pension fund.
The council’s decision sparked a series of headlines across the state that has put Baker in the middle of the ongoing media feeding frenzy that is swirling around Christie and his administration.
Just last week, a Washington-based campaign finance watchdog group, Citizens for Responsibility and Ethics in Washington, called on the Securities and Exchange Commission, the New Jersey attorney general, and the state’s Election Law Enforcement Commission to investigate a possible connection between the donation and the investment.
Here’s a sampling of some of the headlines over the past month
The Inquirer website salted the wounds with a huge photo of Christie on a stage with Baker, then the 2010 GOP gubernatorial nominee, when the New Jersey governor came to Massachusetts to campaign for him. It also carried a head-shot of Baker farther on in the story, with the phrase “pay-to-play” in the caption. The controversy is also drawing national media. Businessweek ran a piece about the council’s decision, Fortune magazine has weighed in, and CNN’s website has also followed the story.
Baker’s unexpected introduction into New Jersey’s political furor is just an example of what he can expect to face as reporters and opponents pick through his business dealings since his last campaign for governor in 2010. His role at General Catalyst, as well as his seat on the board of a huge mutual fund, Natixis Global Asset Management, and other companies present some fertile ground. He received more than $100,000 serving on the Ocean Heathcare board and up to $60,000 as a director of Athenahealth, according to a 2013 financial report made to the State Ethics Commission.
His business background — mainly his role as CEO of Harvard Pilgrim Health — provided fodder for Democrat-friendly labor unions when they launched an ad blitz in the 2010 election painting him as a highly paid health care executive, insensitive to the concerns of working folks. Those themes have already re-emerged in the early months of this year’s race.
New Jersey’s headlines came when the State Investment Council, facing a flood of media inquiries, decided to determine whether General Catalyst failed to properly disclose Baker’s donation when the firm submitted its application for the pension funds. New Jersey’s laws forbid the council from doing business with firms or their financial managers if they have contributed to state political figures within the previous two years.
Baker’s donation, made at a Christie-sponsored event in Boston, would likely be of little notice in New Jersey if it weren’t for the political maelstrom swirling around the New Jersey governor. Once considered a front-runner for the 2016 Republican presidential nomination, he is facing fallout from the George Washington Bridge lanes-closure scandal that is being examined by a federal grand jury.
Baker has produced a letter from a lawyer he hired that argues he is not covered by federal or state security regulationsthat would bar him from making political donations. Both his lawyer and General Catalyst claim that Baker is not involved in investment management decisions and does not seek contracts for managing public pension funds, roles that would be covered by both New Jersey and federal laws. He says he works as a consultant, finding and managing companies in which General Catalyst invests.
The New Jersey legal review in itself could have trouble gaining credibility. It is being done by the state treasurer’s office. The treasurer is appointed by Christie — who chairs the Republican Governors Association, which is expected to play a significant role in helping Baker’s campaign.
Baker also served until this year as a member of the board of trustees of a handful of mutual funds owned by Natixis Global Asset Management, drawing $180,000 for attending six board meetings a year. He has taken in more than $1 million since he joined the board in 2005. He left for two years when he ran for governor in 2010 and rejoined in 2011.
Natixis Global Asset Management is a subsidiary of a large French bank, Natixis. The asset management firm, which oversees about $800 billion in scores of funds, is located in Paris and Boston.
Natixis also provides some financial services to the state of New Jersey. This could raise the same questions about Baker’s political donation to Christie’s state Republican Party. But Baker argues that, in his role, he is acting as an “independent trustee,’’ whose duties only relate to overseeing the administration of the firm’s investment funds. At General Catalyst, in contrast, Baker is listed as a type of partner, although he still makes the same argument that he has no say in pension solicitation.
“Their role is one of governance, not day-to-day management,’’ Natixis Global spokesman David Snowden said. “Independent trustees are paid for their service by the funds and their compensation is fixed.’’
Baker’s softening position on Cape Wind — a project that recently received a loan from a Natixis affiliate — could also earn him additional scrutiny.
Baker spoke out strongly against the project in 2010 but now leaves the impression he is not as opposed. He says he still feels strongly that the wind farm is economically unfeasible, but says he considers it a “done deal.”
On Saturday, Baker campaign spokesman Tim Buckley said in an e-mail that “Charlie feels Cape Wind has progressed to a point where it is a done deal and has no plans to undo the project. As governor, Charlie will work to make sure ratepayers get the best deal possible and pursue less costly renewable energy sources to reduce our carbon footprint.” Buckley did not comment on Baker’s notoriety in New Jersey.
Baker campaign aides scoff at the notion that the $400 million loan by Natixis Capital Markets, a subsidiary of the Paris-based holding company that also owns the Global Asset Management unit, has prompted him to speak less harshly about the proposed wind farm. They say that, as an independent trustee, he was not informed of such financial investments. They also note that the loan was made in March, three months after he left the Natixis board.Frank Phillips can be reached at email@example.com.