The New Jersey State Investment Council, Trenton, on Thursday granted an exemption to Prologis regarding a policy against political contributions from money managers that do business with the $76.8 billion New Jersey Pension Fund.
The pension fund has an investment with Prologis European Properties Fund II, managed by Prologis Management II.
Nine council members at a meeting voted in favor of the exemption and four members abstained. The council formulates investing policies for the division of investment, which manages investments for the pension fund.
A report from the division of investment said a Prologis executive made a $1,000 contribution to the campaign of state Sen. Raymond Lesniak on April 22, 2013, about five months before the New Jersey Pension Fund made an investment in the Prologis fund. The executive is Eugene Reilly, Prologis CEO, the Americas, and a member of the executive committee, the report said.
The contribution wasn't reported, according to the report. Prologis Inc. is the “indirect parent and controlling entity” of Prologis Management II, the report said.
In the report, the division of investment, a unit of the treasury department, noted that the council's policy says, in part, that the division “shall not engage an investment management firm to provide investment management services if, within the two years prior to such engagement, certain political contributions or payments covered (by) the policy been made.”
The division made a commitment of €140 million ($158.5 million) to the Prologis European Properties Fund II. Prologis specializes in owning, operating and developing industrial properties.
The penalty for violating the policy is the termination of a contract with an investment firm unless the firm can show in writing that the violation “was unintentional and inadvertent” and that council determines that the pension fund participants and taxpayers “are best served by such an exemption,” the report said.
A Sept. 30 letter from Prologis Management II to the division of investment said “Mr. Reilly's contribution was unintentional and inadvertent and was in no way connected to the investment in the (Prologis) fund by the pension fund,” adding that Mr. Lesniak plays no role in awarding New Jersey fund business. The division of investment found no communications from Mr. Lesniak regarding the investment in the Prologis fund, the division report said.