Back in May, we discussed how New Jersey’s Department of Treasury had launched an investigation into whether or not venture capital firm General Catalyst Partners had violated state pay-to-play rules when it failed to disclose that “executive-in-residence’ Charlie Baker donated $10,000 to The New Jersey Republican State Committee. General Catalyst subsequently received a $15 million fund commitment from New Jersey, even though it appears that Baker qualified as a “covered person” under NJ statute. New Jersey sold its position in General Catalyst last month (at a profit), but the underlying issue remains in the news because Baker is the GOP nominee for governor in Massachusetts.
Well, it’s now been more than five months since the investigation began, and still no report.
Earlier this week there were a pair of news reports, one suggesting the report was concluded but being held until the next State Investment Council meeting (which is scheduled for after the Massachusetts election), and another that quotes a Treasury spokesman as saying the investigation is still ongoing. So I emailed Treasury to ask the following: “Has the report not been released because the investigation is not yet completed, or because it has not yet been formally presented to SIC during a regularly-scheduled meeting?”
Rather than directly replying, a (different) Treasury spokesman mistakenly included me on a forward to NJ Deputy State Treasurer Rob Romano, in which he wrote: “We just got this question from Fortune. Any thoughts on a response?”
Given that Treasury already had issued a statement about this matter to a local newspaper (and that the statement already had been published), why would my very basic question need to be forwarded to Romano? New information within the 24-hour gap? And why would it take nearly the entire business day to get a response, following which none of my subsequent phone calls were returned (including one to Romano)?
I’m sorry, but something smells rotten in Trenton. There is no justifiable explanation for why this “investigation” — which boils down to determining whether or not Charlie Baker meets a legal definition for “covered person” based on his job responsibilities — is still “ongoing.” To my knowledge, General Catalyst responded to information requests months ago. I certainly understand that state bureaucracy can create needless red tape, and that this may not be a top priority. But the process has now taken nearly twice as long as the OJ Simpson trial, and longer than NJ’s original due diligence on the General Catalyst opportunity.
To be clear, there is no evidence to suggest that political considerations played into New Jersey’s decision to invest with General Catalyst. The recommendation was made by professional investment staff, and all such recommendations in NJ are pre-screened by making sure the firm in question is top-quartile in its asset class. Nor do I believe that a finding against General Catalyst should disqualify Charlie Baker from the top job in Massachusetts. But it’s long past time for the NJ Treasury to present conclusions, or give a reasonable explanation for what’s taking so long. Perhaps, as a start, it could pick up the phone.
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