Pena Contract Award Details May Be Studied : Inquiry: Congressman sees ‘appearance of impropriety.’ Cabinet member denies wrongdoing in pact to manage L.A. transit pension fund.

The details of how a company founded by U.S. Transportation Secretary Federico Pena won a contract to manage $5 million for a Los Angeles transit pension fund may deserve congressional inquiry, according to a member of the House Transportation and Infrastructure Committee.

Rep. John J. (Jimmy) Duncan Jr. (R-Tenn.), who has monitored federal spending on the Los Angeles Metro Rail, said the winning of the contract two years ago by the firm, Pena Investment Advisors Inc., has the “appearance of impropriety.” The contract--awarded without competitive bidding 19 days after Pena took office in early 1993--was reported last week by The Times.

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“I think common sense would tell you that this company would not have gotten this business if it was the Smith Investment Co. or if it was not connected to Secretary Pena,” said Duncan, who in late 1992 prompted an investigation of other spending practices on the Metro Rail.

Duncan, a former state court judge, said that he may seek to question Pena about the pension fund deal at hearings he will lead this spring. The Times article quoted officials in Los Angeles, including the former manager of the pension fund, who said that the Pena firm was hired to curry goodwill of the incoming transportation secretary.

Pena has said that neither he nor his former company has done anything wrong. To avoid a conflict of interest with his official duties, Pena has said, he sold his stake in Pena Investment Advisors in the first two weeks of January, 1993, just before taking office with the Clinton Administration.

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Pena, a lawyer and the former mayor of Denver, reported on his federal financial-disclosure forms that he had sold his stake “for a loss.” In an interview last week with the The Times, Pena said that he had not decided whether he would return to the Denver-based firm upon leaving federal office.

Pena incorporated the investment company in December, 1991, and began soliciting clients, including the Los Angeles transit pension fund, whose money his partners would manage. When he left the firm to join the government one year later, Pena Investment Advisors had grown, with more than $11 million of assets under management.

Asked in the interview to explain his reporting of a “loss,” Pena said that the price of his stake was determined by the value of the firm’s assets under management.

“Apparently at that time (when he sold), there weren’t that many assets under management . . ,” Pena said. “The only thing that counts for the valuation of the firm are the clients that it has. It’s the assets that are under management.”

Pena has declined requests from The Times for access to documents that describe the terms of his separation from the investment firm. Pena’s spokesman did not return calls on Wednesday and Thursday, seeking additional comment.