Markstone head pleads guilty in NY pension probe

NEW YORK (Reuters) - A California venture capitalist has pleaded guilty to a felony charge for bribing four senior officials who managed New York State's pension fund, Attorney General Andrew Cuomo said on Thursday.

Elliott Broidy, chairman of Markstone Capital Partners, paid nearly $1 million in gifts to four officials in the New York State comptroller's office and was rewarded with a $250 million investment in his fund, Cuomo said in a statement.

"This is an old-fashioned pay-off of state officials, this is effectively bribery of state officials," Cuomo told reporters on a conference call.

Markstone is still being investigated. Broidy, who is forfeiting $18 million of fees, is cooperating in the probe, Cuomo said.

The guilty plea could result in a four-year prison sentence for Broidy.

Cuomo did not name the four officials who accepted the bribes; they no longer work for the state comptroller.

Cuomo's probe of kickbacks paid by companies hoping to win business investing the state's pension money had previously been focused on kickbacks paid to placement agents that act as middlemen between investment firms and pension officials.

The bribes by Broidy paid for medical expenses for an unnamed television actress and state officials' luxury travel to Israel and Italy, and covered the period from 2002 to 2006, Cuomo said.

Alan Hevesi was the comptroller during the four-year period.

The current comptroller, Thomas DiNapoli, has banned the use of placement agents.

Cuomo said the state's pension fund could still be corrupted because its sole trustee is the comptroller. Giving the power to make investments to a board, which would have an audit committee, and creating an inspector general, are much-needed reforms, he said.

(Editing by Leslie Adler)