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An appointee of Los Angeles Mayor Antonio Villaraigosa voted two years ago to direct millions in public pension dollars to a company that invested in his own private equity fund, according to documents obtained by The Times. Elliott Broidy, chairman of Markstone Capital Partners, served until May on the Fire and Police Pensions board, which provides benefits to the city's retired police officers and firefighters. Real estate company CIM Group invested $500,000 in Markstone's private equity fund in 2004, according to an e-mail to the city's pension agency. Three years later, Broidy voted with his colleagues on the pension board...

Reporting from Sacramento - With the fortune he has made using his connections with public pension funds, it's hardly a surprise that Alfred J.R. Villalobos owns a sprawling, 9,100-square-foot home overlooking the emerald-blue waters of Lake Tahoe. But the way in which Villalobos financed construction of the $2.7-million mansion is fueling new questions in an investigation by the California Public Employees' Retirement system into the activities of so-called placement agents such as Villalobos. Documents show that the Villalobos home was built with the help of a $1.1-million loan from a partnership set up by CIM Group, a Hollywood-based real estate...

EAST PALO ALTO – At the top of the real estate bubble, CalPERS invested $600 million in two deals that were 3,000 miles apart but linked by a common vision: Buy apartments governed by rent-control laws and turn them into cash cows. The plan failed in a flurry of litigation and bad debt. A project in East Palo Alto is in default. The second deal, in New York, is likely headed that way. CalPERS could lose most or all of its money. What's more, critics say the deals might sully CalPERS' reputation as a champion of socially responsible investing, a...

CalPERS' image takes a hit Shrinking assets and the taint of ties to so-called placement agents threaten to erode the California Public Employees' Retirement System's reputation as a leader among public pension funds. By Tom Petruno and Stuart Pfeifer November 9, 2009 For much of the last decade the California Public Employees' Retirement System cultivated the image of a cutting-edge pension fund -- pouring billions of dollars into potentially lucrative but high-risk investments, hounding companies to rein in executive pay and championing financial security for government workers. Now, CalPERS finds itself caught in a maelstrom of troubles that threatens its...

Remember the old saying, "Once burned, twice shy"? It's supposed to mean that when one has a bad experience, one should be more cautious in similarly dangerous circumstances. California got burned in the early 1990s when Leon Black, fresh off a career with the scandal- tainted Drexel Burnham Lambert junk bond shop, set up his own investment firm and persuaded the state's new insurance commissioner, John Garamendi, to seize a supposedly insolvent Executive Life. Executive Life had a fat portfolio of junk bonds that Black had helped assemble, and Garamendi allowed him to broker a deal with some French buyers...

Calpers burns in subprime fire 24 Oct 2009, 0000 hrs IST, REUTERS SAN FRANCISCO: Faced with huge losses on subprime loans, Calpers is suing the rating agencies which it said misled them by giving top ratings to mortgage bond funds which later turned out to be a house of cards. Calpers also was overcharged for foreign exchange transactions, says state Attorney General Brown, who is suing bank State Street. The market rally this year also has helped. “The recovery now is showing our asset strategy is doing pretty well,” Oliveira said. Calpers’ losses have been cut by about half from...

America's largest public-pension fund, Calpers, revealed that a former board member had reaped more than $50 million in fees for arranging investments that could saddle state taxpayers with hundreds of millions of dollars in losses. The disclosure deepens concerns that alleged conflicts of interest are undermining state retirement funds. The California Public Employees' Retirement System said it is launching a "special review" into payments by money managers

THE CALIFORNIA PUBLIC Employees Retirement System is trying to tamp down public concern after its chief actuary candidly said last month that government pension costs are "unsustainable." The portfolio value of the nation's largest public pension fund, battered by the stock market and the real estate downturn, declined about 24 percent, or roughly $58 billion, in the fiscal year that ended June 30. The system serves 1.6 million public employees, retirees and their families across the state. They need not worry. Their pensions won't be affected. Instead, state and local governments across California will have to cut services — or,...

CalPERS expected to report losing nearly one-quarter of investment portfolio The estimated $56.8-billion drop at the U.S.' largest pension fund, the second annual loss in a row, would have a huge effect on what state and local governments must shell out to support retirees. Marc Lifsher July 20, 2009. Reporting from Sacramento -- California's huge government pension fund is expected to report on Tuesday a whopping annual loss of an estimated $56.8 billion, almost a quarter of its investment portfolio. The loss at the California Public Employees' Retirement System for the fiscal year ended June 30 is the second in...

The best evidence that Larry Summers is headed to the Federal Reserve is the enormous amount of new power the Obama Administration wants to hand over to the Fed. Are they really doing this so that it can be handed over to the relative outsider, Ben Bernanke? Not likely. This is a power play by the ultimate troika, President Obama, Rham Emanuel and Summers. Of course, there is a reaction to this power play from the corners of Wall Street and beyond that don't have significant influence at the table of the troika. A report, by an alliance including two...

A milestone on California's meandering journey toward fiscal insolvency occurred exactly a decade ago when the Legislature enacted a massive increase in state employee pensions on the expedient assumption that it would cost taxpayers nothing. Although the new pensions would generate almost countless billions of dollars in extra income for retirees in the years ahead, the CalPERS board, dominated by union representatives, told legislators that taxpayers wouldn't have to bear the load because investment income, which was flowing into the pension trust fund from high-tech stocks, would continue indefinitely. "They (CalPERS) anticipate that the state's contribution to CalPERS will remain...

Ten years ago today, California's march toward its present fiscal chaos began. On June 16, 1999, the board of the California Public Employees Retirement System (CalPERS) – its investment portfolio bulging after several years of large gains – voted to ask Gov. Gray Davis and the Legislature to broadly increase benefits for more than 800,000 government employees and retirees. There was some skepticism. An aide to Davis, who was then cultivating an image as a pragmatic, can-do centrist, said the governor worried about the prudence of such a broad benefit boost. Assemblyman Tom McClintock, R-Thousand Oaks, questioned how CalPERS could...

Reporting from Los Angeles and Sacramento -- An ongoing investigation into pension fund corruption across the country intensified Friday as California Atty. Gen. Jerry Brown directed subpoenas at politically connected firms and individuals, according to sources familiar with the investigation. Brown issued the subpoenas as part of a probe into "placement agents" who help secure pension fund investment contracts for their clients in return for large sums of money, often millions of dollars. The subpoenas seek information on the use and disclosure of placement agents and potential conflicts of interest, said sources who spoke on the condition of anonymity because...

CRAIG BOWEN'S SALARY during his final year as chief of the San Ramon Valley Fire Protection District was about $221,000 a year. So how did he end up retiring in December with a tax-advantaged annual pension of $284,000? The answer provides an amazing case study that highlights problems with public employee compensation and reveals tricks that allow workers to spike their pensions at the expense of their fellow employees and taxpayers. The Bowen story has some similarities to the case I examined last month of Peter Nowicki, the chief of the Moraga Orinda Fire District who was able to turn...

BRUCE MALKENHORST $41,639.57 $499,674.84 VERNON Top 10 CalPers Pensions JOAQUIN FUSTER $296,555.88 UC LOS ANGELES DONALD GERTH $278,054.64 CSU SACRAMENTO JAMES STAHL $265,740.96 L A CO SANIT #2 JOHN SCHLAG $255,600.48 UC LOS ANGELES WILLIAM GARRETT $254,745.72 EL CAJON RAYMOND PATCHETT $239,635.80 CARLSBAD ROBERT TOONE JR $232,947.36 PALMDALE DIANNE OKI $231,164.16 STATE COMP INS CARL BORONKAY $224,812.80 METROPOLITAN WT

The Securities and Exchange Commission is seeking detailed financial information from two members of the Los Angeles Fire and Police Pensions board, according to letters obtained by the Los Angeles Times in a joint investigation [1] with ProPublica. The letters to board members Sean Harrigan and Elliott Broidy ask for bank and brokerage account details, any finder's fees or placement agent fees, and documents "sufficient to identify all source of income greater than $10,000" received since the beginning of 2005. They represent the strongest evidence to date that the SEC's ongoing "pay-to-play" investigation of New York's state pension fund has...

Checkmate for Pensions? The FT reports that investment losses hit public sector pensions: The crisis facing pension plans for US state and municipal employees is deepening as investment losses deplete the resources of retirement funds for teachers, police officers, firefighters and other local government workers. The largest state and municipal pension plans lost 9 per cent of their value of more than $2,000bn in the first two months of this year, according to data from Northern Trust. That followed a loss of 30 per cent in 2008, equal to about $900bn. Smaller funds, which underperform the larger ones, lost more,...

The California Public Employees’ Retirement System poured $1.71 billion into Apollo Management last year, more than twice as much as it gave any other private- equity manager, Bloomberg News reported. The move was a bet on Apollo chief Leon Black’s historical success in distressed investment, but, Bloomberg says, it hasn’t paid off so far. Apollo, which has posted average annual returns of more than 25 percent in the last two decades, is now struggling to right some of the tottering companies in its portfolio. One of its private equity holdings, Linens ‘n Things, filed for bankruptcy protection. Another, the real...

For a fleeting moment, between tabloid outrage over the crooked Illinois governor and Bernie Madoff's Ponzi scheme, we caught a glimpse of the coming reckoning. Bureaucrats at various levels of American government play a game of hot potato with financial responsibility for the benefits that politicians promise voters. The game involves trick plays — unfunded mandates, off-balance-sheet transactions, and imaginary "trust funds" that don't contain any money. But these tricks won't prevent the potato from dropping to the floor. It may not drop this time. But it will drop. Already, in September of last year, California's state legislature was struggling...

CalPERS: Thinking the unthinkable By Ed Mendel Last spring CalPERS doubled the amount of a program that uses the pension fund’s gold-plated credit rating to help state and local governments borrow more cheaply, moving the cap from $5 billion to $10 billion. Now as the economy crumbles, CalPERS is taking a look at what seemed unimaginable last year: What happens if the government borrowers default on their debts and CalPERS has to repay the loans? “In exchange for only a couple million dollars you are taking on a heckuva a tail risk,” Michael Schlachter of Wilshire Consulting told the CalPERS...

http://ecoworld.com/blog/2009/03/04/carbon-taxes-public-sector-pensions/

http://ecoworld.com/blog/2009/03/04/carbon-taxes-public-sector-pensions/

Next Catastrophe Think Fannie Mae and Freddie Mac were a politicized financial disaster? Just wait until pension funds implode. Funds worth trillions of dollars start to plummet in value. Political pressure to be “socially responsible” distorts the market decisions of government-related enterprises, leading to risky investments. Investors who once considered their retirements safely protectedwake up to a sinking feeling of uncertainty and gloom. Sound like the great mortgage-fueled financial crisis of 2008? Sure. But it also describes a calamity likely to hit as soon as 2009. State, local, and private pension plans covering millions of government employees and union workers...

When the city of Vallejo filed for bankruptcy last year, it made national news. Among claimed reasons for this financial debacle was, as usual, Proposition 13. Same urban myth, different city. Recall that Proposition 13 was also blamed when Orange County went bankrupt, in spite of clearly documented evidence of the Orange County treasurer's criminal wrongdoing and the fact that he used an astrologer to assist him in making investments. In some quarters, it is always Proposition 13's fault when government runs short of money. Nor is Proposition 13 culpable in Vallejo's budget shortfall. During more prosperous times, Vallejo promised...

CalPERS has sustained steep declines in the value of its real estate holdings on top of even larger stock market losses. CalPERS made aggressive investments in real estate at the worst possible time, when inflated property values had peaked and were already beginning to decline. The magnitude of the losses almost ensures that CalPERS will raise employer contribution rates. Pension fund officials have warned state and local governments that they may be hit with fee increases of between 2 percent and 5 percent of payroll beginning as early as 2010. If the recession deepens and sales and property taxes continue...

The front page of Wednesday's Wall Street Journal featured a shocking news story about severe financial problems in the public employees union-dominated California Public Employees' Retirement System, which has lost a quarter of its assets since July after investing heavily in real estate schemes — including high-risk speculative ventures on vacant land. According to the Journal, CalPERS has experienced its worst decline since 1932 and has lost 103 percent on its housing investments in the latest fiscal year. Here's the kicker: “CalPERS invested not only its own money, but billions of dollars of borrowed money that must be repaid even...

At the height of the property bubble, California's giant pension fund, Calpers, made a fateful decision: It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America. Partly because of these investments, California Public Employees' Retirement System is struggling to avoid one of its worst annual declines since its 1932 inception. Calpers has lost almost a quarter of its assets since July 1, the start of the current fiscal year. The problems come at a time of uncertainty for the nation's largest public pension fund, which has been...

Forbes.com has a lengthy piece that tries to devine whether another catastrophe will deliver a final blow to the economy before recovery starts. CalPERS is mentioned in the piece. John Osbon, one of the experts on Forbes' "Investor Team," says, "I can imagine CalPERS or TIAA-CREF making some announcement that they are cutting benefits and payouts by 30% due to investment losses, non-functioning markets and so on. That would be a real hit with real money." This strikes us as a bit ignorant, since CalPERS pension benefits are guaranteed. The fund can't simply "announce" a cut . . .

Calpers suffers $40bn asset hit By Deborah Brewster Published: October 22 2008 23:38 | Last updated: October 22 2008 23:38 Calpers, the largest state pension fund in the US, lost 20 per cent of its assets, or close to $40bn, between July 1 and October 20 this year as a result of failing financial markets. The fund’s assets fell to $192bn, well below their height of more than $250bn three years ago. Pat Macht, a spokeswoman for the fund, said the Calpers board, which met this week, would not call on the state government to lift contributions next year. State...

The California Public Employees’ Retirement System (CalPERS) may lose nearly $950 million from its investments in US housing crash-victim LandSource. CalPERS invested $947 million in US property developer LandSource, which recently filed for bankruptcy protection. “CalPERS will represent the interests of the CalPERS fund in the bankruptcy process,” the pension fund said in a statement. “LandSource is one of thousands of investments of CalPERS, and it does not represent a large portion of the overall fund.” The investment by CalPERS went to MacFarlane Partners, who along with Weyerhaeuser took a 68 per cent interest in the venture known as LandSource....

Bursting the Speculative Bubble - May 30, 2008 The Bubble may be ready to burst. The CFTC pushed by Congress may be sharpening the point on the pin that bursts the price balloon. Futures, Institutional Investors and Oil Prices. The volume of email commenting on the Michael Masters testimony before the Senate was surprising to say the least. While we disagree with some of his comments comparing the number of futures contracts to physical barrels, we do agree with the basic analysis and believe it helps explain some of the oil price increase over the last few ears. Since all...

SACRAMENTO -- The California Public Employees' Retirement System, which poured about $1 billion into a troubled real estate deal, is in negotiations to keep a related loan default from turning into a bankruptcy. CalPERS, the nation's biggest public pension fund, and its partners acquired a controlling interest in 15,000 acres of undeveloped land in the Santa Clarita Valley early last year, before the meltdown in the housing market. The land, once owned by Newhall Land and Farming Co., was appraised at $2.6 billion at the time of the CalPERS investment but has dropped considerably in value since then. CalPERS chief...

Something is happening at the nation's largest pension fund, the Sacramento-based California Public Employees' Retirement System, which has nearly a quarter-trillion dollars in investments ranging from real estate to stocks. With that much money and a governing board dominated by politicians and union representatives, there have been hints that factors other than pure fiduciary responsibility often drive decisions. Some of those other motives have been advertised – investment in low-income housing or environmentally pure ventures, for instance – while others have been all but virtually impossible to divine, since CalPERS has been a very tight-lipped shop. The processes by which...

The California Public Employees Retirement System Chief Executive Officer may leave by the end of the year amid tensions with the board, marking the third top level executive at the $244 billion retirement fund to depart in 2008... Calpers is in the middle of an internal debate over whether to require infrastructure projects that receive Calpers investments to use union employees... In February, Christianna Wood, senior investment officer, stepped down ...

I note from Bloomberg News that last year the former president received 2.8 million from a partnership with Ron Burkle. There are actually three Cayman Island accounts that Burkle pays Clinton from. To date, former President Clinton has received 15.5 million from Burkle's efforts. The link for this information can be found: HERE. Wikipedia describes the Burkle and Clinton Cayman Island relationship as follows: "..Recent calls for the release of Senator and presidential candidate Hillary Clinton and former president Bill Clinton's tax returns have brought to light the fact that President Clinton is expecting a $20,000,000 payout from Burkle's supermarket...

Members of the California Public Employees Retirement System Board have a legal responsibility to protect the assets of the $230 billion retirement fund for the benefit of tens of thousands of government employees. Today, the commitment of the board's investment committee to protect the fund will be tested. The committee is being asked to support Assembly Bill 1967. Introduced by Assemblyman Alberto Torrico, D-Newark, the bill would bar CalPERS from investing in private equity funds that are owned or managed in any degree by certain sovereign wealth funds. SWFs are funds that are affiliated with specific countries or federations of...

California Gov. Arnold Schwarzenegger signed a bill on Sunday, as he previously said he would, to bar the two biggest U.S. public pension funds from investing in companies doing business in Iran. The bill, which affects the California Public Employees' Retirement System and the California State Teachers' Retirement System, comes amid heightened tensions between the United States and Iran. Schwarzenegger's office had issued an announcement last month stating he would sign the bill while he was in New York as Iranian President Mahmoud Ahmadinejad was appearing at Columbia University. "I couldn't be more proud to sign this bill," Schwarzenegger echoed...

Gov. Arnold Schwarzenegger's administration on Tuesday lost a long-running court battle over its plan to sell bonds to cover the state's public employee pension costs. The ruling by the 3rd District Court of Appeal could complicate negotiations over the state's already overdue budget. Republican lawmakers are holding up the $104 billion spending plan in part because they believe it will leave California with an unmanageably large budget deficit next year. Tuesday's ruling may only add to that concern, depriving the state of more than $500 million to help close the estimated $5 billion-plus deficit in the 2008-09 budget year. Schwarzenegger...

Sacramento -- Two appointees tapped by Gov. Arnold Schwarzenegger to study ways to rein in public pension costs receive income from firms that invest $750 million annually for the California Public Employees' Retirement System, business ties that some say could call the panel's independence into doubt. Gerald Parsky, the former head of the state Republican Party, is a partner in a Los Angeles firm, Aurora Capital Partners, which invests $150 million for CalPERS. Schwarzenegger appointed him chairman of a 12-member commission responsible for recommending ways to overhaul public pension systems, ... Commission member Matt Barger is a senior adviser at...

New commission has its work cut out for it Faced with a politically intractable problem, elected officials invariably turn to blue ribbon commissions -- panels of distinguished citizens they hope will come up with palatable solutions.Gov. Arnold Schwarzenegger appointed such a commission early in his first term to deal with the state's burgeoning prison crisis, to little or no avail. The panel made sound recommendations, which the governor ignored, and the prison crisis has deepened.Now the governor, together with legislative leaders, has created a new commission, this one to deal with another intractable state problem: the soaring cost of retiree...

Gov. Arnold Schwarzenegger and legislative leaders Tuesday announced appointments to a commission that will report on how the state and local governments can meet the costs of providing pensions and health care to retired public employees. Gerald Parsky, an investment executive and former chair of the University of California Board of Regents, will head the 12-member panel, the Governor's Office said. The governor's other appointees, all Republicans, will join union leaders and pension experts appointed by Democratic legislative leaders. Schwarzenegger's Finance Department estimates the state would need to invest an additional $44 billion to meet its pension obligations to all...

Rejecting calls to spread out a looming jump in premiums, a state pension board panel on Tuesday endorsed an average 33.6 percent increase in long-term care insurance rates for 170,000 government workers and retirees in California. The boost would help the giant California Public Employees' Retirement System establish a reserve and generate additional capital to cover a projected $600 million deficit over the next five to six decades. If adopted today by the full CalPERS board, the move would be the second increase since 2003, when trustees boosted rates an average of 17 percent. "We're better off to get it...

Angelides drew attention when he called on the California Public Employees' Retirement System and the State Teachers' Retirement System to involve 2 percent of their portfolios in the state's "emerging markets" -- neglected, low-income neighborhoods. But conservatives charge he pushed controversial financial policies and effectively overrode the state constitution by politicizing a ministerial post to promote market and societal changes. "He is putting the public employees' money at risk to pursue a political agenda and to help him get into the governor's mansion," protested Adrian Moore, vice president of the Reason Foundation, a Los Angeles libertarian think tank. As a...

BURBANK, Calif. - Gov. Arnold Schwarzenegger, accompanied by activist actors George Clooney and Don Cheadle, on Monday signed legislation to end investment in Sudan by California public employee pension funds and a university system in an effort to pressure that nation to stop genocidal violence in the Darfur region. Speakers at the signing ceremony recalled the Holocaust and the vows of "never again." "I grew up in Europe after the Second World War so I remember the dark and heavy shadow cast by the Holocaust," Schwarzenegger said. "It has become clear to me that we cannot turn a blind eye...

Even as it tackled a long-term $20 billion gap in funding for the state's school employees, the California State Teachers' Retirement Board found time at its meeting last week to plug another hole: the millions of dollars that firms which handle, or want to handle, pension fund investments have donated to board trustees who are also elected officers. The state treasurer, the controller and the superintendent of public instruction, each of whom by virtue of the office sits as a CalSTRS trustee, all run for election or re-election statewide. That takes money. If they decide to run for higher statewide...

Former San Diego Superior Court Judge G. Dennis Adams, convicted a decade ago in a corruption case for illegally accepting gifts from a lawyer, is back in court – suing the state retirement system for cutting his pension. In a lawsuit filed Aug. 10 in the courthouse in which he once worked, Adams is seeking to overturn a June 21 final decision by the board of the California Public Employees Retirement System that sliced his judicial pension by about 20.4 percent. The retirement system has decided his pension should be reduced from 49 percent of his last judicial salary to...

SACRAMENTO — Soon after taking office in January 2003, state Controller Steve Westly began helping three venture capital firms land multimillion-dollar investments from California's giant pension system, according to public records including e-mails and officials' calendars. Westly, now running for the Democratic gubernatorial nomination, received campaign donations from individuals associated with each of the funds, campaign finance records show. At any given time, hundreds of fund managers are angling for CalPERS investments. Westly is one of 13 members of the California Public Employees' Retirement System board, and as the state's chief financial officer, one of the most influential. The funds...

Newspaper circulation fell 2.6 percent in the six-month period ending in March, according to data released Monday, as the industry continued to struggle with competition from other media outlets and the Internet. The decline in average paid weekday circulation was about the same as the previous time newspapers reported six-month circulation figures for the period ending last September, according to the Newspaper Association of America, a trade group. The NAA reported that average paid circulation at Sunday newspapers fell 3.1 percent versus the same period a year ago, also a comparable decline with the last time circulation figures were reported....

SACRAMENTO, CA – A recent Los Angeles Times article revealed that California State Controller and gubernatorial candidate Steve Westly helped guide $5 million in pension funds to a venture capital firm run by two well-connected campaign contributors. Taxpayers and public employees should be concerned because this quid pro quo is the latest example of how politicians use California’s public employee retirement systems to benefit their campaign cronies. In 2003, Healthpoint Partners LP, a venture capital fund that invests in medical equipment companies, met with the investment team at CalPERS, the $207 billion pension fund that provides retirement security for 1.4...

SACRAMENTO — State Controller and gubernatorial candidate Steve Westly steered California's giant pension system to invest in a fledgling venture capital fund whose politically connected partners helped him raise campaign cash. Before Westly's involvement, the pension board's outside advisors had rejected the fund as ill-suited for its portfolio. After the investment was made, one of the partners became enmeshed in an unrelated pension-fund scandal in Illinois, pleading guilty to attempted extortion. As New York-based Healthpoint Partners LP lobbied the California Public Employees Retirement System in 2003 and 2004 to invest in their fund, two managing directors, including the one in...