In responding to a Public Records Act lawsuit filed by a former board member over violations of transparency statutes, CalPERS is attempting a new variant of the classic legal strategies in litigation: “If you have the facts on your side, pound the facts; if you have the law on your side, pound the law; if you have neither the facts nor the law, pound the table.”
As we’ll explain, CalPERS is pounding the table in the guise of pounding on facts. And the reason for trying to fight a Public Records Act suit on facts, when they are nearly always argued on legal issues, is to force a trial. Going to trial is the course of maximum delay, which not only defers embarrassment but is very likely to push a court decision out beyond the early fall board elections. And it also forces Jelincic to lay out more dough in pursuing this case. Even though successful plaintiffs in Public Records Act cases are entitled to the award of legal fees (and this includes if the other side coughs up the re
Health Care, Enterprise Tech, and Other Tips for China from Allocators
Savvy knowledge of Beijing’s capital markets is in higher demand than ever before, as investment chiefs discussed at the 2021 CIO Symposium.
Heath care and enterprise technology are areas of interest for asset owners in China, particularly as other consumer technology areas become overcrowded with investors. Interest in Beijing has been intensifying over the past year, and allocators are looking for opportunities overlooked by others.
Asset owners discussed strategies to invest in the world’s second largest capital market at the 2021 Virtual Chief Investment Officer Symposium. The webinar included Ash Williams, executive director and chief investment officer at the Florida State Board of Administration (SBA); Sophia Tsai, managing director of investments at Trinity Church Wall Street; and Brian O’Neil, investment chief at the Robert Wood Johnson Foundation. Mercer’s Janet Li, a wealth business leader
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.
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!
As storied short seller David Einhorn would say, “No matter how bad you think it is, it’s worse.” The lawyers and banking experts I’ve contacted thus far have never heard of a case like the latest from CalPERS, which is saying a lot.
As you can see from the embedded filing below, CalPERS is suing Gloria Najera, a former employee it says embezzled $685,000 from beneficiaries, including, Wells Fargo style,
from a beneficiary’s bank accounts.
The civil claim is sketchy on the timetable, but Najera was a clerical worker responsible for updating beneficiary addresses and bank direct deposit information. That apparently also gave her access to at least the last four digits in their Social Security numbers. Najera used this information to pilfer directly from the bank account of one beneficiary to the tune of nearly $69,000. For nine others, she diverted funds from dormant CalPERS accounts (where CalPERS had reason to think the beneficiary was still alive but had only out-of-