BlackRock, JPMorgan and Goldman Sachs could have their strategic partnership contracts with the PBGC canceled if the agency determines that its former director, Charles E.F. Millard, made inappropriate contacts with those managers before they were hired.

The three managers, who were hired last December, run a combined $2.5 billion for the Pension Benefit Guaranty Corp. in real estate and private equity. JPMorgan and BlackRock were awarded $900 million each, while Goldman Sachs Asset Management was awarded $700 million.

Rebecca Ann Batts, the PBGC's inspector general, authored a draft report on Mr. Millard's actions that was released today by the House Education and Labor Committee, which is launching its own investigation, committee Chairman George Miller, D-Calif., said in a news release.

The report recommends that the PBGC's board determine whether Mr. Millard's "inappropriate actions" cast enough doubt about the "fairness, integrity and openness of the procurement to warrant cancellation of the strategic partnership contracts."The PBGC board has asked Vince Snowbarger, the agency's acting director, for a recommendation on what response would be appropriate.

In a statement, Mr. Millard's attorney, Stanley Brand of Brand Law Group, said: "During Mr. Millard's tenure at PBGC, he implemented, with the affirmative votes of the secretaries of Treasury, Commerce and Labor, a diversified investment policy that would increase the agency's ability to meet its liabilities over the long run. He also sought strategic partnerships to modernize PBGC's financial systems and obtain the additional resources PBGC needed to deal with impending economic challenges. These activities were advocated and carried out in a transparent and ethical manner."

Mary Sedarat, JPMorgan spokeswoman, and Andrea Raphael, a spokeswoman for Goldman Sachs Asset Management, both declined comment, while a spokesman for BlackRock did not return calls by press time.

The PBGC had no immediate comment, according to Jeffrey Speicher, spokesman. Efforts to reach Mr. Snowbarger were unsuccessful.

This story was originally published by Pensions & Investments, sister publication of Business Insurance.