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The New York attorney general's pay-to-play investigation is focusing on a California venture capitalist who may have funneled money to people involved with the New York state pension fund while he was soliciting investments from the fund, according to people familiar with the matter. Elliott Broidy, chairman of Markstone Capital Partners of Los Angeles and a prominent GOP fund-raiser, is being investigated for a $300,000 investment in a low-budget movie produced by a top executive at the New York state pension fund. The same day that Mr. Broidy made his initial investment in the movie, the pension fund approved a $200 million investment in one of his funds, the people said. ![[CHOOCH]](http://s.wsj.net/public/resources/images/MI-BA121_CHOOCH_DV_20091202175124.jpg) Getty Images (Lipton); Associated Press (Broidy) Elliott Broidy gave about $90,000 to actress Peggy Lipton, said people familiar with the probe. The movie, called "Chooch," has been a focus of the attorney general's investigation. It was produced by David Loglisci, who was then head of private equity for the New York state fund, and his brothers. The pension fund later invested $50 million more with Markstone, for a total of $250 million, the people said. Unlike other backers of the film embroiled in the probe, Mr. Broidy didn't invest the money directly but through an associate and under the associate's name, the people familiar with the matter said. Mr. Broidy could face possible criminal charges from Attorney General Andrew Cuomo, including bribery, these people said. A spokesman for Mr. Broidy declined to comment. Mr. Loglisci, who became the New York pension's chief investment officer, has been criminally charged in the case, as has Hank Morris, a political adviser to the fund's former trustee, Alan Hevesi. Messrs. Loglisci and Morris have denied wrongdoing and are fighting the charges, which include bribery and money laundering. Mr. Hevesi hasn't been accused of wrongdoing. This movie about a Queens man who lets his team down in a big game tanked at the box office when it was released in 2005. But it's now getting attention from investigators over its ties to the New York pension-fund scandal. A lawyer for Mr. Loglisci declined to comment. At the heart of the investigation is concern that the selection of managers to invest retirees' money was guided by influence peddling, rather than an eye toward the best results. Four people have pleaded guilty to criminal charges in connection with the investigation and are cooperating. People familiar with the attorney general's investigation said it also is focusing on other possible actions by Mr. Broidy. Between 2004 and 2005, they said, Mr. Broidy gave about $90,000 to actress Peggy Lipton to help pay for her Manhattan apartment and other expenses. Ms. Lipton, also a model and singer and known for her role in the late 1960s television show "The Mod Squad," was romantically involved at the time with Jack Chartier, these people said. Mr. Chartier was then chief of staff for Mr. Hevesi, the sole trustee of the pension fund. Representatives of Mr. Chartier and Ms. Lipton didn't respond to requests for comment. Additionally, the attorney general's office has been investigating whether Mr. Broidy loaned $44,000 to a relative of Ms. Lipton that a person familiar with the matter said was intended to help Ms. Lipton and wasn't meant to be paid back. Mr. Broidy, 52 years old, is the former finance committee chairman for the Republican National Committee and a major donor to GOP candidates. His private-equity firm, Markstone, manages about $800 million and focuses on investments in Israeli companies. He also is being questioned by the Securities and Exchange Commission for what the agency has called "possible violations" of federal securities laws as part of an investigation of allegations that investment firms made improper payments to secure pension fund business. The agency hasn't accused him of wrongdoing. Mr. Broidy also served as a trustee of the Los Angeles Fire and Police Pensions fund. He resigned in May, saying that the SEC investigation was a distraction to the board. He isn't the first person embroiled in the New York pension probe to invest in "Chooch." Mr. Morris invested $100,000, and Barrett Wissman, a money manager and music impresario who has pleaded guilty to securities fraud in the case, contributed $150,000. David Leuschen, co-founder of private-equity firm Riverstone Holdings, invested $100,000. In June, Riverstone agreed to pay $30 million and eliminate the use of placement agents, or financial middlemen who earn fees by securing pension business for investment funds, in a settlement with the attorney general, which had been questioning the firm as part of the pay-to-play probe. A Riverstone spokesman has said the firm and Mr. Leuschen continue to cooperate with the investigation. Private-equity firm Quadrangle Group, which was co-founded by former Treasury official Steven Rattner, agreed to acquire the DVD distribution rights to "Chooch" through an affiliate called GT Brands that paid $88,841, according to the SEC's complaint in the case. Write to Craig Karmin at craig.karmin@wsj.com
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