Elliott Broidy, the American-Jewish venture capitalist and the deposed chairman of Tel Aviv-based Markstone Capital Partners, has been appointed deputy chairman of a fundraising organization for Republican presidential candidate Donald Trump's campaign.
- Markstone backers looking at 40% loss on their investment
- Markstone’s Israeli investors refusing to put up more cash
Broidy was removed as chairman of Markstone Capital after admitting to paying nearly $1 million in bribes to pension fund managers in New York State. He is still thought to have extensive political ties in Israel.
Broidy's appointment as vice chairman of the Trump Victory Fund, a joint fundraising committee sponsored by Trump and the Republican National Committee, comes just weeks after Steven Mnuchin, a Jewish Hollywood film producer and former Goldman Sachs executive, was named Trump's national finance chairman.
About a decade and a half ago, Broidy decided to combine a Zionist act and a business opportunity in establishing a major venture capital fund that would operate in Israel. He used his ties with Alan Hevesi, the New York state comptroller at the time, who was also active in the Jewish community, to raise $250 million for the fund from the New York State pension fund, which had $100 billion under its management in the time.
The stated Zionist mission of the fund as well as Broidy's ties meant that there was a lot of politics involved in establishing Markstone Capital. In mid-2003, when Israel's finance minister, and now prime minister, Benjamin Netanyahu, visited New York and met with finance officials from New York's state government, the matter of the establishment of Markstone also came up.
Following that visit, the chairman of Israel's Histadrut labor federation at the time, Amir Peretz, approached American labor union leaders asking for their help with the new fund. That brought in an additional $50 million for Markstone.
In the end, however, Markstone turned out to be one of the most resounding financial failures in the history of the Israel capital market. Broidy was removed as its chairman in late 2009 after being accused of paying bribes to New York pension fund managers, allegations that he ultimately admitted to, acknowledging giving nearly a million dollars to state officials in return for the pension funds' investment of roughly $250 million in Markstone Capital.
Broidy, who invested in the past in several Israeli startup companies, is understood to have extensive political ties in Israel. He was also a regular dinner partner of the late Prime Minister Ariel Sharon.