Governor Charlie Baker did not violate pay-to-play laws when he donated $10,000 to the New Jersey Republican Party just months before the investment firm where he then worked was given $15 million in New Jersey state pension funds to invest, according an audit by the New Jersey treasurer’s office released Thursday.
The treasurer, who was appointed by Governor Chris Christie, a Baker political ally, determined that while Baker was an investment professional with Cambridge-based General Catalyst Partners, he did not provide the sort of services that would be covered by New Jersey pay-to-play laws.
Those regulations prohibit political donations by investment firm employees within two years of the company receiving state pension funds for investment.
Through a spokesman, Baker issued a one-sentence response to the findings by Christie’s administration: “The governor is pleased that this matter is now resolved,” said Tim Buckley, Baker’s director of communications.
The audit, released at a meeting of the State Investment Council, was initiated in May when Baker’s 2011 donation came to light.
The issued dogged Baker during last year’s gubernatorial campaign, particularly when it became clear that the Christie administration was not going to release its finding before the November election. Democrats charged that Christie was dragging his feet in order to prevent the issue from flaring up again during the final days of the campaign.
Christie chaired the Republican Governors Association during last year’s elections, when the group spent some $10 million to support Baker’s candidacy.
When the New Jersey governor appeared at Baker’s inauguration earlier this month, he walked away from reporters when asked why the audit had not been released, commenting only that it was the treasurer’s decision.
Baker said he donated the $10,000 to Christie’s state party because he appreciated the New Jersey governor’s help, including a personal appearance, in Baker’s failed 2010 gubernatorial bid. He also said that he felt that Christie, who is laying the groundwork for a 2016 presidential campaign, is “a really good guy.”
In the campaign finance documents filed publicly by the New Jersey state GOP, Baker identified himself as a General Catalyst “partner,” as he did repeatedly when donating to other candidates over the past four years.
But Baker has insisted he was not covered by the laws when he made the donation because he was an “executive in residence” at General Catalyst, not an employee or partner at the firm and did not work on soliciting pension funds. He said his role was finding areas and companies for General Catalyst to invest in.
The Christie administration’s audit said its review of the facts came to the same conclusion.
“Review of all documents and [the company’s] website cited in this report disclosed no direct link of Mr. Baker providing investment management services for the state’s pension investment,’’ the audit stated.
After the issue surfaced, Baker sought a legal opinion from the Washington-based law firm Covington & Burling. The firm supported Baker’s position that he did not violate pay-to-play rules.
General Catalyst invested only $9.6 million of the $15 million allotment it received in December 2011 from the New Jersey State Division of Investment. It sold that investment for $14.1 million to Washington University in St. Louis.
Some of the money that the General Catalyst invested went to a New York insurance firm where Baker served on the board.
Frank Phillips can be reached at firstname.lastname@example.org.
Correction: An earlier version of this story incorrectly reported how the $15 million of pension funds were used.