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Richard Mourdock Target Of Retired Indiana Cop's Pay-To-Play Probe Request

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WASHINGTON -- A retired Indiana state trooper has asked the Securities Exchange Commission to investigate whether state Treasurer Richard Mourdock, a candidate for Senate, broke pay-to-play rules in offering a contract to manage police pension money while he was raising campaign cash from Wall Street.

Mourdock, a favorite of the Tea Party, is leading incumbent Sen. Dick Lugar heading into Tuesday's Republican primary, according to polls. But his campaign has struggled to raise money, and former state police 1st Sgt. Thomas Frailey told HuffPost that he had concerns about Mourdock seeking a hedge fund of funds manager for the Indiana State Police Pension Fund around the time he was holding a Manhattan fundraiser with representatives of the finance industry.

According to SEC regulations, financial advisers who get business from a pension fund are barred from contributing to the campaigns of politicians who have influence over which advisers are chosen.

In the case of the Indiana state police pension fund, Mourdock issued a request for proposals to manage some $50 million in February, setting a date to receive those proposals of March 2. HuffPost has obtained a copy of an invitation the campaign faxed on Feb. 16 for a March 6 fundraising lunch at the Lexington Avenue offices of NGN Capital in New York, hosted by Steve Forbes, Alfred Angelo and NGN Capital boss Ken Abramowitz.

A spokesman for the Indiana state treasurer's office declined to release the names of the firms that had applied to manage the pension money. A selection was to be made by May 15.

Frailey, in his letter asking the SEC to look into the matter, notes that the unusual fax invitation played up Mourdock's role as treasurer, "highlighting his position overseeing state funds."

Tickets for the lunch went for $1,000, $2,500 and $5,000. According to federal campaign records, Mourdock raised more than $100,000 in the first quarter of 2012 from finance industry workers and their spouses, although it could not immediately be determined which donations came from that event.

Christopher Conner, a spokesman for Mourdock's campaign, did not address specifics, but denied any impropriety.

"This is a frivolous complaint with no merit that was no doubt engineered by the Lugar campaign as a last, desperate attempt to attack Richard Mourdock three days before an election," Conner said.

An SEC spokesman said the commission could not comment.

Frailey was careful to note that he does not know if any of the firms that submitted proposals to manage state money had any ties to the fundraiser. But in an interview, he said that when he was an investigator for the state, such activity would have prompted him to ask questions.

"'It appears to me that something wasn't quite right," Frailey said. "I don't want to say too much. To be quite honest, I just want the SEC to look into this."

Frailey, who relies on his pension for income, said a friend in law enforcement brought the issue to his attention, and one thing in particular concerned him, beyond the timing. It was a sentence that appears to give Mourdock veto authority over the proposals.

"The award of any contract(s) or agreement(s) as a result of this [Broad Agency Announcement] shall be at the discretion of the Treasurer," the request for proposals says. "Multiple contracts may be awarded to obtain all the necessary services; however, the Treasurer reserves the right to not award any contracts for the services reviewed."

Said Frailey: "These investors, at the same time they have their investments in and it's being considered, Mourdock has the sole discretion to strike anybody."

Frailey, an independent who used to register as a Republican, said he was aware his complaint comes at a sensitive moment, but he doesn't plan to let the matter drop, even if Mourdock loses.

"I just filed this," he said. "I want the SEC to look into it."

"I was taking a serious look at this guy as an independent voter, and this creates doubt in my mind," Frailey said.

Michael McAuliff covers politics and Congress for The Huffington Post. Talk to him on Facebook.

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