Washington investment firm Thayer Capital Partners and Chairman Frederic V. Malek yesterday agreed to pay a total of $250,000 to settle civil charges that the firm failed to disclose that it paid thousands of dollars to a consultant who performed "no meaningful work" at the behest of Connecticut's former treasurer. The Securities and Exchange Commission alleged Malek and the firm broke securities laws by not notifying investors in Connecticut's pension fund of the unusual arrangement. The treasurer had pledged some $75 million from Connecticut Retirement Plans and Trust Funds to one of Thayer's private equity funds as part of the deal.

According to the complaint, in the middle of the negotiations for the investment, Connecticut's former treasurer Paul J. Silvester told Malek personally that it would be "helpful" if he hired a political supporter, but that "it would be acceptable if Thayer did not," according to court papers.

The consultant, former state Senate majority leader William A. DiBella, was hired and paid $375,000, a percentage of the total investment Connecticut placed with Thayer, the 14-page complaint said.

Thayer and Malek did not admit or deny wrongdoing as part of the settlement.

"The commission takes seriously public corruption and activities whereby public officials abuse their power to reward friends and associates," SEC trial counsel Linda B. Bridgman said. "This matter is especially egregious because it involves the investment of public pension fund money, thereby violating the public trust and corrupting the investment process."

Also yesterday, the SEC sued DiBella and his company, North Cove Ventures LLC, seeking return of the consulting fees as well as civil penalties. DiBella is fighting the charges. He serves as chairman of a nonprofit company that provides regional water and sewer services in Connecticut. DiBella's lawyer did not return calls yesterday.

Silvester pleaded guilty in 1999 to federal bribery charges. He allegedly solicited kickbacks from investment firms that were doled out to his friends and family members.

Barry E. Johnson, Thayer's chief financial officer, said the firm was "just happy to have this matter come to closure and be behind us." Johnson said he could not speak for the government, but he said that the firm was unaware of any ongoing criminal investigation into Thayer or Malek stemming from the Connecticut allegations.

Thayer hired DiBella with the expectation that he could be helpful in winning access to a new Democratic state treasurer after Silvester, a Republican, lost the post in late 1998, Johnson said.

"We would never hire anyone with the expectation they weren't going to do any work," he said. "This is a business and we wouldn't do that."

The SEC said Malek "failed to take adequate steps to determine" what DiBella was doing in exchange for the money. Thayer and Malek also should have considered whether the treasurer's request was part of a "corrupt agreement" between Silvester and DiBella, the court papers said.

Malek, 67, has held several key jobs in Republican administrations and served as a campaign manager for President George H.W. Bush. Along with other local business leaders, Malek is leading an effort to bring a major league baseball team to the Washington area.

Thayer Capital manages more than $1.2 billion, the SEC said. Thayer officials said yesterday that Connecticut pension funds have about $53.5 million invested with the firm. Its board of advisers includes former defense secretary William Cohen, former housing secretary Jack Kemp, and former AOL chairman James Kimsey.

As part of yesterday's settlement, Malek and Thayer agreed to cooperate with the SEC investigation and to provide documents and testimony to securities regulators if asked.