CalPERS & the Press

Self dealing. Conflicts of interest. Actions that are quite possibly criminal.

These are the kinds of malfeasance a lawyer hired by the California Public Employee Retirement System has documented in a review that sheds new light on the bribery scandal that has rocked CalPERS.

Some of the details have previously been reported by The Bee and other media. But the scale of the alleged gross malfeasance and potential criminality laid out by lawyer Philip Khinda – involving members and former members of the CalPERS board of directors, a senior investment officer and CalPERS’ former chief executive officer – is stunning, and disturbing.

The current board and administrators at CalPERS are given credit for pursuing this review. Yet many of those serving on the board today or holding top staff positions at CalPERS served alongside those now implicated in criminal acts. That raises questions about their diligence as well. Editorial: CalPERS must hold overseers accountable – Sacramento Bee, 3/19/2011.

Where was the Sacramento Bee when I ran against Valdez, head of the CalPERS Investment Committee, who had already declared bankruptcy twice and had a history of accepting gifts? Where was the Bee when I ran against Bill Crist, President of the CalPERS Board, who was allowed to flagrantly violate CalPERS’ own election rules? The Bee and other papers sat on the sidelines.

When the Board tried to enact regulations that would prohibit candidates from criticizing others (Board members) in their ballot statements, the Bee finally wrote an editorial objecting. According to the Bee, “the vote by CalPERs incumbents muzzles challengers in ways that risk creation of a permanent board: unaccountable, untouchable and isolated from the people who elect it.” See my testimony on that issue.

We can see that involvement by the press certainly has an impact. After the Bee ran their editorial, the Board was so embarrassed that they revised their proposed rules immediately and to actually allow more freedom to candidates and more information to voters.

It is easy to take pot shots from the sidelines at misbehavior and worse by the Board but where was the Bee or any other newspapers during elections? We can see the power of the press when they choose to get involved. There are 1.3 million CalPERS members, many of whom live in the Sacramento area and subscribe to the Bee. Many more live in major metropolitan areas served by the Los Angeles Times and the San Francisco Chronicle, to name just two more.

These papers routinely provide coverage of most electoral offices in the region and endorses candidates for offices from school districts to governor. Yet, they have never endorsed a CalPERS candidate for one of the many positions elected by members and their coverage of candidate backgrounds and positions has generally been nonexistent.

I guess covering old scandals sells newspapers but doing the hard work of interviewing candidates and making endorsements does not. Next month 1.3 CalPERS members are eligible to cast votes for one of eight candidates. The California press, as usual, has been silent on their qualifications or positions.

Those who are really interested in shaping the future of CalPERS, instead of taking potshots from the sidelines, should plan on attending the first CalPERS Candidate Forum ever held at CalPERS headquarters. In previous years this event has been held elsewhere and has been sparsely attended, first in a private rented hall, second in the relatively small boardroom at CalSTRS.

Maybe this year there will finally be more interest in questioning candidates before they are incumbents.  Attendance is limited to 200 in the CalPERS auditorium at 400 P Street. Parking is free underneath the building; enter from Q Street. The forum is sponsored by PERSWatch and will be facilitated by the League of Women Voters. All eight candidates will be there.  April 26th at 6 pm. More information at

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