Last week, Republican gubernatorial candidate Charlie Baker distanced himself from a $25 million investment that New Jersey’s pension fund made in a venture capital firm where he works, saying that he has no role in soliciting funds.
But Baker’s campaign acknowledged Tuesday that his firm, General Catalyst, directed some of that money toward a health insurance company that he oversees as an “executive-in-residence” at the Cambridge-based investment company. The investment first came to light last week after it was revealed that Baker had made a $10,000 contribution to an ally, Governor Chris Christie of New Jersey, just months before the pension fund distributed the money.
Baker spokesman Tim Buckley said the candidate did not know that the funds that General Catalyst, which lists him as a partner, invested in a health care startup, Oscar Insurance, originated from the New Jersey pension fund.
The Baker campaign said that he learned Monday from media inquiries that a chunk of the pension board’s $25 million allocation to a fund managed by General Catalyst was invested in Oscar. Baker is the venture capital firm’s representative on the Oscar board.
The New Jersey pension board’s decision to contribute to the General Catalyst fund came seven months after Baker donated $10,000 to Christie’s state Republican Party, sparking criticism that Baker might have violated pay-to-play regulations. He strongly denies any laws were broken or that he committed any wrongdoing.
“In his role . . . at General Catalyst, fund specific information is not something he would normally be aware of,’’ Buckley said.
“This information does not change the underlying fact that the contribution in question is permissible because Charlie’s relationship does not trigger the pay-to-play prohibitions,’’ Buckley said. “Charlie and Governor Christie campaigned together in 2010, and Charlie made the contribution because of his support for the governor.”
Christie is chairman of the Republican Governors Association, which is expected to augment Baker’s campaign spending this fall.
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Baker’s campaign declined to make him available for an interview Tuesday.
Both Baker and General Catalyst officials have contended that Baker’s work on the investment side of the firm does not overlap with its capital-raising activities. They say his role at the firm is to manage the health care companies in which General Catalyst invests.
The technology news website PandoDaily first reported Tuesday on the connection between the New Jersey funds and Oscar, where Baker serves as director. The website last week brought to light Baker’s donation to Christie and the New Jersey pension fund’s subsequent commitment to Baker’s firm.
Incorporation papers filed last year with New York State show that General Catalyst had a 14.79 percent interest in Mulberry Health Inc., the holding company for Oscar Insurance Corp. Baker sits on the boards of both Mulberry and Oscar.
Since the news about Baker’s connection to New Jersey broke last week, his campaign has scrambled to answer questions about potential pay-for-play conflicts of interest. Democrats have jumped on the issue in an effort to damage Baker, the frontrunner in the state GOP gubernatorial primary and a serious threat to Democratic autonomy on Beacon Hill.
In an interview with the Globe last week, Baker said his position at General Catalyst — which lists him as an executive-in-residence/partner — exempted him from pay-to-play laws.
He insisted he is not an employee. Baker and his aides said his listing the firm as his “employer” on numerous campaign finance records since 2011 was an error.
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He notes that he does not get a W-2 income tax form from the company and pays his own health care insurance.
Buckley said Tuesday that Baker receives no bonus, commission, or incentive pay from General Catalyst. He relies on the company for administrative support, but the firm does not pay for his work and travel expenses, according to Buckley.
Federal regulators, though, are strict about their interpretation of which financial executives are covered by laws governing political donations. In 1996, Morgan Stanley was banned for two years from state contracts in Massachusetts after one of its executives, who managed its fixed income division, donated $1,000 to Governor William F. Weld’s US Senate campaign.
Baker aides said General Catalyst’s lawyers have reviewed his donation to Christie and insist it does not violate federal or New Jersey pay-to-play laws.
Baker also sits on the boards of two other companies that have received General Catalyst funds. Neither of those investments involved New Jersey pension funds, according to a company spokeswoman.
Jim Balassone, executive-in-residence at the Markkula Center for Applied Ethics at Santa Clara University, said Baker’s efforts to distance himself from the firm’s solicitation of funds boosts the argument that there has been no conflict of interest.
“It improves the perception, but it still leaves us with a sense of potential impropriety,” said Balassone. “If he wasn’t associated with this firm, we wouldn’t be having this discussion. He’s associated with the operation of one of their portfolio companies, or multiple portfolio companies, but that means that he still has a real vested interest in the success of this firm.”
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He added, “It creates a question in my mind, it may create a question in the minds of voters in Massachusetts. That’s for each person to decide.”
Oscar bills itself as a consumer-friendly insurance company, and has won plaudits for its transparency and speed.
Incorporation papers for Oscar show Jared and Joshua Kushner, sons of prominent real estate developer Charles Kushner, atop its corporate governing structure. Jared Kushner, owner of the New York Observer and son-in-law of Donald Trump, is president and chief executive of Kushner Companies, a Manhattan-based real estate firm. His brother Joshua is managing partner of the venture capital firm Thrive Capital Management, an affiliate of Oscar.
Charles Kushner founded Kushner Companies and was convicted in 2005 on 18 counts of tax evasion, witness tampering, and illegal campaign donations. A Kushner spokesman said that Charles Kushner is still involved with the family firm, but has no role in either Oscar or Thrive.
Frank Phillips can be reached at phillips@globe.com. Jim O’Sullivan can be reached at Jim.OSullivan@globe.com. Follow him on Twitter at @JOSreports.