Markstone Capital and Israeli Investments

I was searching and came across some interesting information. In December of 2009, Markstone's Chairman, Elliot Broidy, plead guilty to bribing New York pension officials. Now Markstone has received hundreds of millions in investments from CalPers, the state public pension fund. To this day, Calpers is still investing in Markstone.

CalPers Website - Markstone Capital You just have to scroll down a bit.

Now, according to Markstone's website, they were created to invest in Israel. Okay, fair enough. In addition, even Globes, the Israel Business Arena site, admits that many of the investments have turned out very poorly. Globes - Blackstone to make major investments in Israel states how Markstone is partnering in Israel to invest even more money in who knows what.

Now here is my question. Why is CalPers, a public pension fund, investing a company who plead guilty to bribing pension officials in New York and whose main interest is not in investing in America; but, is interested in investing in Israel especially when it has had such spectacular losses in Israel. And this is going on at a time when we are being told that the pension fund is in trouble. Shouldn't CalPers be making more careful investments like in, heck, how about Berkshire Hathaway, they have never lost anyone money have they?

Am I also wrong to point out that the CIM Group which is funded by public pension funds is also owned by two Israelis? Now personally I support Isreal's right exist; but, I don't want to fund it with public pension funds, that is not what they were created to do.

You might wonder why nobody cares about all of this. Well, here is an article from The Israel Democracy Institute - It's worth investing in the Jewish state. It talks about Mr. Broidy and Markstone (incorrectly spelled in the article) in 2006. The article says that while at a meeting of 4,000 Jews in Los Angeles "Mr. Wolfenson, no foe of Israel, reportedly cautioned his listeners that a new global situation is emerging in which America will find it more difficult to back Israel". Later the article says, "By making Israel stronger economically, American Jews will also help in making Israel less dependent on American aid. This will resonate well within Israeli-American relations as well."

Lets see if we can put these pieces together in one possible way. Israel and it's supporters knew that Americans were becoming less and less willing to provide the massive aid that we do to Israel. As an alternate way to get a cash flow, it was determined that investments would do the trick and that that would improve Israel-American Relations. In the United States, at the same time, we had public pensions that were vastly overfunded and needed to get rid of some money. Seems like a match made in heaven.

Just for fun, lets ask another question. Mayor Villaraigosa has just been chosen to be the chair of the Democratic National Committee in North Carolina and as a co-chair of Obama's re-election committee. He also got a very nice interview in the New York Times recently. He is the same person who appointed Elliott Broidy (you remember him) to one of the Los Angeles pension boards.

The question that keeps coming to my mind is, why does the name Andrew Adelman come to mind everytime I think about the pension funds. He wasn't on any of the boards. Maybe I am just old and muddle things together in my head. Ignore my foolish speculations, I haven't been well this week anyways.