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New Jersey State Investment Council Chairman Robert Grady at Gov/ Chris Christie's inauguration earlier this year. (Photo by Tony Kurdzuk | NJ Advance Media)

TRENTON — New Jersey's biggest labor union today plans to file a complaint with the State Ethics Commission against a key adviser to Gov. Chris Christie who is in charge of the agency that oversees pension investments.

In an 11-page letter to the ethics commission, New Jersey AFL-CIO President Charles Wowkanech said that the chair of the State Investment Council, Robert Grady, “has violated the Division's own rules barring politics in the selection and retention of such funds and investments, and has further created an appearance of impropriety.”

At issue is the state's investment of hundreds of millions of dollars of pension money with Wall Street firms, including hedge funds and other types of “alternative investments” that charge higher fees than more traditional types of investments — a practice that started before Christie was governor but has increased under him.

Some “key executives” of the firms donated to state and national Republican organizations that helped Christie, according to Wowkanech, who said those donations potentially broke state pay-to-play laws, and at the least violated the state officials’ code of ethics. Wowkanech wants an investigation.

The complaint is based on a series of reports on the websites Pando Daily and International Business Times, written by the reporter David Sirota, that explain the pension fund's increase in alternative investments since Christie took office.

The complaint also takes issue with Grady’s involvement with Chrisite’s re-election campaign as an adviser, in close contact with Christie and top staffers, while he was leading the council.

“It should not be seen as mere coincidence that the reports show Robert Grady was listed as a required attendee on a series of regular weekly phone conference calls held by high-level staff on the Governor's re-election committee in or around September 2013,” Wowkanech’s letter reads.

Grady, who was an adviser to Christie before he was named to the unpaid chairmanship of the investment council, declined to comment on the ethics complaint. But in an email Grady wrote in August to the International Business Times that was provided to the Star-Ledger, he addressed its questions.

“Before participating in any phone calls, and before agreeing to serve as a volunteer senior policy adviser to the Governor during his campaign, I requested in writing, and received in writing, approval from the Ethics Officer of the New Jersey Department of the Treasury,” Grady wrote. “At no time was the New Jersey pension fund discussed or was any manager hired by the New Jersey pension fund discussed. At no time was any pension business or any pension investment decisions discussed on these calls.”

Among the controversial political donations made by financial firms the pension fund invested in was $10,000 in 2011 to the Republican State Committee from Charles Baker, who at the time was “executive-in-residence” at the venture capital firm General Catalyst. Not long after the donation, New Jersey’s pension fund invested $15 million in the firm, which had not disclosed to the state that Baker was an employee. The Department of Treasury is conducting a review as to whether that violated the state’s pay-to-play law.

“By failing to follow these clear rules to bar such firms from contracts with the Division when such contributions are made, the Chair has violated the Division's own rules barring politics in the selection and retention of such funds and investments, and has further created an appearance of impropriety,” Wowkanech wrote.

Other donations were from financial firm executives to the Republican Governors Association and Republican National Committee. Even though though state rules allow such donations, Wowkanech argued that they've only been allowed since March of this year. Department of Treasury spokesman Joseph Perone, on the other hand, said the the council actually clarified that they were allowed in 2006.

Christie spokesman Kevin Roberts scoffed at the complaint.

“It’s a cheap political stunt based on shoddy, distorted reporting from an individual who over and over again has been shown to be biased, willfully inaccurate, and just flat out wrong,” he said.

Chris Santarelli, another spokesman for the New Jersey Department of Treasury, said the complaint is baseless.

"The (State Investment Council's) mandate is to provide policy and governance oversight," Santarelli said. "The SIC ensures and certifies that adequate and appropriate due diligence has been conducted by the (Division of Investment) when making investments. Investment proposals are presented and explained by DOI in open public meetings before the SIC. Decisions on DOI investment strategy are based on the merits and performance of the proposed fund and its fit within the State’s broader portfolio."

Peter S. Goodman, editor in chief of the International Business Times, said, “We are pleased the governor is continuing to read our stories, and we note that he has yet to challenge any facts.”

Correction: This story has been edited to remove language that state the State Investment Council made investment decisions. The council oversees pension investments, but does not propose them.

Matt Friedman may be reached at mfriedman@njadvancemedia.com. Follow him on Twitter @MattFriedmanSL. Find NJ.com on Facebook.