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HARTFORD, Nov. 30 — More than a year after the State Ethics Commission began looking into three dozen pension fund investments made by Connecticut's corrupt former treasurer, a Dallas-based investment firm today became the first to agree to pay a cash settlement to avoid further scrutiny.

State officials hope the settlement, worth $1.2 million, will be the first of several they reach in the months ahead with investment firms under investigation for their dealings with former Treasurer Paul J. Silvester. In September 1999, Mr. Silvester pleaded guilty to federal bribery and money laundering charges for agreeing to invest in certain firms if the firms paid huge fees to his friends and family members.

The $1.2 million to be paid by the Dallas firm, Crossroads Investment Company, is punishment for having paid what the Ethics Commission determined were illegal contingency fees to two Hartford-region consultants who helped the firm gain access to treasury officials starting in 1987. It would be the largest settlement ever collected by the Ethics Commission, which enforces state lobbying and financial disclosure laws.

Whether the state will get the money, however, depends on the outcome of a Superior Court case between Crossroads and the two local consultants, George C. Finley, of West Hartford, Conn., and Peter G. Kelly, of Glastonbury, Conn.

In return for their political access, the two men received hundreds of thousands of dollars in consulting fees from Crossroads. But after Crossroads stopped paying them last year, they filed suit to collect the amount they said was owed them — $1.2 million.

Crossroads agreed to pay the settlement only if it won the lawsuit and the right to retain the $1.2 million it has withheld from Mr. Finley and Mr. Kelly.

The commission also fined the firm $2,000 for making the contingency payments, but Alan S. Plofsky, the executive director, stressed that Crossroads had inadvertently, not intentionally, violated Connecticut's lobbying laws.

"The money is important, but the principal is more important," Mr. Plofsky said. "We hope that this will be the first of several settlements with the funds."

John Buser, chief operating and chief financial officer of Crossroads, declined to comment publicly on the settlement, citing the ongoing lawsuit with Mr. Kelly and Mr. Finley.

Crossroads currently has contracts to invest about $300 million of the state's $22 billion pension funds, said Howard Rifkin, the deputy state treasurer. There are no immediate plans to cancel the state's contracts with the firm, he added..

The federal government last month indicted four people who prosecutors said profited enormously from illegal payments orchestrated by Mr. Silvester.

The four indicted are Ben F. Andrews Jr., 59, a former adviser to Gov. John G. Rowland who ran for secretary of the state on Mr. Rowland's ticket in 1998; Lisa A. Thiesfield, 30, of Hartford, who managed Mr. Silvester's 1998 election campaign; and Frederick W. McCarthy, 57, and Charles B. Spadoni, 52, both of Triumph Capital Group, a Boston firm in which Mr. Silvester invested state pension funds in return, prosecutors said, for payments to Mr. Andrews and Ms. Thiesfield.

Aside from the ongoing federal investigation, the Ethics Commission is investigating about 19 firms, lawyers and lobbyists and their relationships and the fee arrangements with Mr. Silvester, 38, who is still giving information to federal investigators and has yet to be sentenced.

Among those under scrutiny are Mr. Kelly, a Hartford lawyer and prominent Democrat who was a pillar of Vice President Al Gore's presidential fund-raising network in Connecticut, and Mr. Finley, a lawyer in West Hartford.

Both men have repeatedly said they have done nothing illegal or unethical.

R. Bartley Halloran, the lawyer representing Mr. Kelly and Mr. Finley, denounced the timing of today's announcement, while the two men's lawsuit against Crossroads is still pending in Superior Court. He also called the agreement toothless because it demands that Crossroads pay to the state only what it was obliged, according to Mr. Halloran, to pay his clients.

The $1.2 million Crossroads payment, he also said, includes a waiver of the $548,623 the firm has spent on legal fees to defend itself against Mr. Finley and Mr. Kelly's suit. "By paying a $2,000 fine," Mr. Halloran said, "they are getting a $500,000 benefit."