CalPERS likes to think that all that matters is if it can control perceptions in Sacramento. If Dan Walters’ latest column is any indication, CalPERS is losing that battle.
For those of you outside California, Walters has been the most influential commentator in Sacramento for decades. His view skew somewhat conservative, but he regularly calls out politicians on both sides of the aisle.
His latest object of disfavor is the CalPERS-sponsored bill AB 386, which he lambasted forcefully in his latest column, Pending Bill Opens Door to CalPERS Corruption. Walters criticizes the Assembly Judiciary Committee, which just passed the bill with no discussion at all.
CalMatters Commentary: Pending bill opens door to CalPERS corruption
Dan Walters
CalMatters Commentary
Assembly Bill 386 sailed through the Assembly Judiciary Committee last week on a unanimous vote with virtually no discussion about its provisions.
The measure also received express treatment a few days earlier from the Assembly committee that deals with public employee matters.
Given its cavalier handling, one might think that AB 386, carried by Assemblyman Jim Cooper, an Elk Grove Democrat, is just another minor change in law. In fact, however, it would allow the financially shaky California Public Employees Retirement System (CalPERS) to semi-secretly lend out untold billions of dollars by exempting details from the state’s Public Records Act.
Assembly Bill 386 sailed through the Assembly Judiciary Committee last week on a unanimous vote with virtually no discussion about its provisions.
The measure also received express treatment a few days earlier from the Assembly committee that deals with public employee matters.
Given its cavalier handling, one might think that AB 386, carried by Assemblyman Jim Cooper, an Elk Grove Democrat, is just another minor change in law. In fact, however, it would allow the financially shaky California Public Employees Retirement System (CalPERS) to semi-secretly lend out untold billions of dollars by exempting details from the stateâs Public Records Act.
Potentially it opens the door to insider dealing and corruption in an agency thatâs already experienced too many scandals, including a huge one that sent CalPERSâ top administrator to prison for accepting bribes.
It appears that at least some people in Sacramento are paying attention to what has been happening at CalPERS and don’t like what they see.
Below, we have embedded the California Assembly Judiciary Committee staff analysis for AB 386, a bill providing for secrecy of private debt investments. The analysis calls out some of CalPERS’ major fiduciary duty failings in remarkably blunt terms.
This matters because CalPERS claims it intends to set up an in-house unit to make direct debt investors, or as laypeople would put it, make loans. CalPERS further maintains that it wants to keep these debt investments until maturity. Yet it also insists that it needs to hide all the details about these loans, including their terms, whether there is any collateral, and who the borrower is!
Frankly, it’s surprising that it’s taken this long for an investigation of a public pension fund over allegations that it lied about its returns. But it’s not a surprise that it took Federal investigators, as in the FBI, to saddle up, in this case against a Pennsylvania Public School Employees’ Retirement System, aka PSERS.
Readers regularly lament how CalPERS regularly and obviously runs roughshod over the law and board members openly violate their fiduciary duty by not even pretending to oversee staff adequately and undermining anyone who dares to do so. That’s because CalPERS has the deficient governance structure that is pervasive among US public pension funds: boards captured by staff and a dearth of other local or state supervision and enforcement. So things have to get really bad, as with CalPERS former CEO Fred Buenrostro taking bribes, to get the FBI to go after misconduct. And yes, Buenrostro is now in Federal prison.