Fred Malek, a Dog and the SEC

"Dear Mr. King -- Thanks. Joel Popkin. One of those 13 Jews Malek identified."

Is there a continuum of behavior whose parts cannot be separated from the whole Malek?

There was the dog killing in Peoria in the '50s, the Senate Watergate Committee in the '70s, the doomed nomination to be a governor of the U.S. Postal Service in the '80s, and now the Securities and Exchange Commission action in 2004.

Yes, Malek vs. the federal government two years ago.

The SEC instituted administrative and cease-and-desist proceedings against Malek, his company, Thayer Capital Partners, and two Thayer affiliates, TS Equity Partners IV L.L.C, and TC Management Partners IV L.L.C. The SEC charged that in 1998 the Connecticut treasurer, Paul J. Silvester, used state pension investments in Malek's company to reward a friend and political supporter, William DiBella, former majority leader of the Connecticut Senate.

The SEC charged that Malek, who was seeking state money for investment in one of Thayer's funds, hired DiBella and paid him a percentage of the state pension fund's total investment with Malek's company, "even though DiBella had no prior involvement with the transaction and ultimately performed no meaningful work related to the investment." DiBella understood from Silvester that he didn't have to do any work for Malek or his company and that Silvester even increased the amount of the pension fund's investment with Malek "by at least $25 million (to a total of $75 million) solely to secure a larger fee for DiBella," according to the SEC News Digest.

Silvester was later sentenced to four years in jail after pleading guilty to federal charges that included racketeering and conspiracy to launder money, according to the Hartford Courant. Silvester was also working on deals with other investment companies.

Fred Malek and his company, for their failure to disclose to the pension fund (and pensioners) the side deal to retain and pay DiBella nearly $375,000 -- and without admitting or denying the SEC's findings -- consented to the issuance of a cease-and-desist order censuring him and his company. Malek's company was ordered to pay a civil penalty of $150,000, and he was personally made to pay a civil penalty of $100,000.

That wasn't ancient history or a youthful indiscretion. The year: 2004. Malek was 67 years old.

kingc@washpost.com