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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...

From 1999 through 2002, I was the Vice Chair of the Senate Public Employment and Retirement Committee. During that time, a number of bills presented to the committee increased pension and retirement benefits for state and local government employees. Every single one of these bills were passed and signed by Governor Davis. At the hearing on each of these bills, the lobbyists for the government employee unions showed up and begged the committee members to vote for the bill. In addition, the representative for the California Public Employee Retirement System (CalPERS) told the committee that the retirement system could afford...

SACRAMENTO (AP) - The board of the California Public Employees Retirement System has voted to oppose a constitutional amendment that would institute a less generous pension system for government employees hired on or after July 1, 2007. The measure by Assemblyman Keith Richman, R-Chatsworth, would create a new defined benefit plan for those workers. It also would allow them to enroll in a voluntary, 401(k)-style defined-contribution plan. The vote was 10-0 with two representatives of Gov. Arnold Schwarzenegger abstaining. A 13th board member was absent. "This bill comes at the wrong time," said state Treasurer Phil Angelides, a member of...

The new year may be five weeks off, but it's a safe bet we already know what one of the big stories of 2006 will be: a pending Legislative Analyst's Office report on the total amount that school districts and local and state governments owe for the pensions, health care and other benefits going to retired public employees. It's going to be a stunner – definitive proof that the city of San Diego is far from alone in having pension benefits that taxpayers can't afford. While San Diego's shortfall is conservatively estimated at $1.4 billion, a Los Angeles Daily News...

Last year California's leaders made the absurd decision to float bonds to pay for obiligated payments into the state pension fund. Yes, borrowing to pay operating costs--in this case for pension investments. Kinda like using your credit card to pay for buying stocks. This stupidity is widespread at the state and local level in recent years. Today the Pacific Legal Foundation announced the courts invalidated the bonds because the state consitution requires a public vote for large bond issues, and Gov. Schwarzenegger tried to skirt around that. The court did not call bullshit on the idea of pension bonds themselves--not...

Gov. Arnold Schwarzenegger has once again demonstrated how dishonest and hypocritical he is by his appearance at the recent Topanga fires here in Southern California. How could Schwarzenegger in good conscience force a group of firefighters to stand behind him in mock support while he simultaneously attacks firefighters' pensions, benefits and livelihoods? This act is the epitome of insult. His conduct in this case is particularly reprehensible considering that he recently rejected almost all of the recommendations put forward by a Fire Service Blue Ribbon Committee, a committee he commissioned, that was intended to improve public safety during urban interface...

Nine seek seats on CalPERS board http://www.sacbee.com/content/business/story/13651572p-14493894c.html (EXCERPT) Nine candidates, including two incumbents, are vying for a pair of at-large seats on the 13-member governing board of the California Public Employees' Retirement System, the nation's largest public pension fund. The open seats are for four-year terms starting in mid-January. Overall, six of the 13 trustees are elected by members. The governor appoints two representatives. The Assembly speaker and Senate Rules Committee jointly name one trustee, and the state Personnel Board selects one. The state treasurer, controller and director of the Department of Personnel Administration also serve on the board overseeing...

One financial expert describes it as one of the most stunning transfers of wealth in human history, from the pockets of taxpayers to the pockets of government employees. What will it take to awaken the victims? What's happening is that extravagant increases in pensions and other compensation of state and local government employees threaten to cause a wave of bankruptcies, tax increases and cutbacks in services. An analysis by the L.A. Daily News this week showed that California's largest public agencies face an increase of $108 billion in pension costs compared to just three years ago. According to the Legislative...

In a surprise move, former San Francisco Mayor Willie Brown has resigned from the board of the influential California Public Employees' Retirement System. The departure caught leaders at the nation's largest public pension fund off guard, leaving them with no explanation for the unexpected decision. Brown's replacement, Kings County Supervisor and farmer Tony Oliveira, was quickly sworn in Monday morning. "Nothing the mayor has ever done surprises anyone. You always took everything he did as being something that was just his style," CalPERS board President Rob Feckner said Monday. The exit came just before the board was to consider...

SINGAPORE – CalPERS, the biggest U.S. pension fund, is considering property investment in China, a country where its own corporate governance and human rights rules prevent it from investing in stocks. The California Public Employees' Retirement System, which has $183 billion in equity, has only $1.2 billion invested in property outside the United States. But sensing a peak in the U.S. property market, CalPERS is paring down the U.S. portion of its $22 billion property portfolio by at least $7.5 billion, according to Michael McCook, its senior real estate investment officer. Meanwhile, it aims to raise its foreign property assets...

SACRAMENTO – Gov. Arnold Schwarzenegger may have dropped his original plan to overhaul state and local government pension systems, but he continues to warn of a potential San Diego-style meltdown of the state pension funds. The governor said this week that if he can't push a pension overhaul through the Legislature, he will place an initiative on the ballot next June. "We will continue with that, because we have to have pension reform," Schwarzenegger said Monday on a Sacramento radio talk show. "It has a potential of bankrupting the state, as you can see what happens in San Diego –...

SACRAMENTO — A coalition of media companies and government watchdog groups, reacting to rumors of losses at some big hedge funds, are clamoring to get two of California's biggest public pension funds to disclose more details of their holdings in exotic investments. The California First Amendment Coalition on Tuesday filed requests under the state public records law with the $182-billion California Public Employees' Retirement System and the $63-billion University of California pension and endowment fund, seeking information about debt levels at the hedge funds they invest in. They also ask for data on management fees and types of hedge funds...

SACRAMENTO - California's capital is packed with more than 1,000 lobbyists, but when people want to make something happen in Sacramento, they often turn instead to Bob White, a genial Republican maestro who helped elect Gov. Arnold Schwarzenegger. White has an advantage lobbyists don't. While registered influence peddlers must reveal whom they work for, White calls himself a strategist who doesn't directly push for changes in state policy. That legal distinction allows White to conceal who his corporate clients are, even though he and members of his consulting firm, California Strategies, go to bat for them by exploiting a loophole...

SACRAMENTO - After pressuring Gov. Arnold Schwarzenegger to drop his proposal to overhaul public employee pensions, some union representatives have already abandoned negotiations for a new plan, administration officials said Wednesday. The governor had hoped to put a proposal before voters to change the public employee retirement system, whose costs have grown from $160 million to $2.6 billion over the past five years. But he scrapped the plan after public safety unions complained that it did not explicitly preserve death and disability benefits for fallen police officers and firefighters. But on April 19, union representatives participating in the talks for...

SAN DIEGO (AP) - Seeking to regain momentum, Gov. Arnold Schwarzenegger took his reform agenda on the road Monday, leaving any mention of last week's retreat on his plan to fix the state's pension system behind in the capital. His remarks in San Diego contrasted with Thursday's announcement from Schwarzenegger that he would delay his proposed ballot initiative to privatize much of California's public pension system from November until June 2006. The governor said "misconceptions" by firefighters and police officers that they could lose death and disability benefits had overwhelmed the issue. On Monday, Schwarzenegger spoke before 400 employees at...

Under pressure from firefighters and police officers, Gov. Arnold Schwarzenegger on Thursday backed off, for now, his plan to privatize California's public employee pension system. The Republican said "misconceptions" among firefighters and police officers that privatization would strip them of death and disability benefits had come to dominate the issue. Over the past few weeks, Schwarzenegger has waged a campaign to put privatization on the ballot during a special election next fall. But on Thursday, he said he would wait until the June 2006 election if lawmakers did not craft a compromise measure in the coming months. "Let's pull it...

SACRAMENTO - In a major reversal, Gov. Arnold Schwarzenegger today withdrew his support of a pension reform initiative that ignited stiff opposition from police officers and firefighters concerned about losing death benefits. At a morning press conference, the Republican governor said he would focus on crafting legislation palatable to public safety employees and their unions. Also, Schwarzenegger said he will rewrite the measure, aiming for the June 2006 ballot if he cannot forge a legislative compromise. ``There should be no doubt they will be protected,'' the governor said of police and firefighters. Dropping his current proposal ``will spark a whole...

California's largest public pension plans want investors to think green - as in money and the environment. And they want deep-pocket investors to think beyond feel-good investments such as power-generating solar and wind farms - to wireless sensors to monitor power usage in supermarkets, or to home water-treatment systems. Investors can make money by mining opportunities in emerging clean technology ventures, say officials at the influential California Public Employees' Retirement System and California State Teachers' Retirement System. Or, they say, they can eventually lose money by ignoring the future financial risks of greenhouse gas emissions. "We're trying to look at...

A key panel of the California Public Employees' Retirement System endorsed a plan Tuesday to reduce wild swings in government contributions, following calls for a pension overhaul by Gov. Arnold Schwarzenegger and other critics. Under the plan, CalPERS would revamp a formula used to calculate annual pension contribution rates for the state, cities and other government agencies. It would also spread investment gains and losses over a 15-year period instead of three years, as it does now. At the same time, trustees agreed to explore legislation to create reserve accounts that government officials can tap to meet their pension payments...

SACRAMENTO - The day after Arnold Schwarzenegger launched an initiative drive to remake public pensions, a prominent ally of President George Bush attacked the plan and pleaded with the GOP governor to pursue an alternative. Forcing new public employees to move to a 401(k)-style pension system -- in which they would invest their own money and assume the risk of playing the stock market -- would hurt the University of California's ability to attract top talent, said Gerald Parsky, chairman of UC's Board of Regents. The proposal is one of three ``reforms'' that Schwarzenegger said Tuesday he wants to take...

Schwarzenegger is willing to bend on his proposal to shift state workers to private accounts. Democrats are drafting their own fixes. The Schwarzenegger administration is backing away from its demand that the state employees' pension system be replaced with private retirement accounts. Finance Director Tom Campbell said Wednesday at a legislative hearing that the governor is open to changing the pension system in other ways, provided there are savings for taxpayers and predictable costs for the state. His comments come as the governor travels the state collecting signatures for a possible ballot initiative that would move government workers hired in...

SACRAMENTO (AP) - One day after Gov. Arnold Schwarzenegger announced plans to push his pension overhaul campaign to the ballot later this year, an Assembly hearing into the proposed changes quickly showed more hostility among lawmakers than support. The Democrat-dominated Committee on the Public Sector heard testimony from a Republican lawmaker and key Schwarzenegger official on privatizing the state's pension systems, but openly feuded with them, revealing the growing partisan divide over the issue. "Are we wasting our time here when the governor has already flipped us the bird publicly?" asked Assemblyman Paul Koretz, D-West Hollywood, during testimony by state...

As one state department pursued a fraud case against a former prison correctional officer who it claimed had exaggerated his workplace injuries, the state's retirement system granted him a special pension for life. The Department of Corrections, Greg Nelson's one-time employer, says that at age 47 he claimed he hurt his back and neck in a workplace fall, only to find a new job operating heavy machinery at forest fires for as long as 14 hours at a stretch. But as investigators assembled their case against Nelson, the state's retirement system awarded him a medical pension, agreeing that his injuries...

California taxpayers could save over $1 billion annually under a proposed overhaul of the state employee pension system being pushed by Gov. Arnold Schwarzenegger and his allies, according to a nonpartisan government analysis of the plan. The nonpartisan Legislative Analyst's Office determined that providing all new state employees with a 401(k)-style retirement plan could save the state "hundreds of millions of dollars to over $1 billion annually." The overhaul initiative was authored by San Fernando Valley Republican Keith Richman and sponsored by the Howard Jarvis Taxpayers Association, a Schwarzenegger ally. Assemblyman Richman, of Granada Hills, said the LAO's analysis confirmed...

CA: THEY PROTEST TOO MUCH by Assemblyman Ray HaynesThe most interesting proposals in last week’s state of the State speech by Governor Schwarzenegger were the merit pay for teachers and the idea for changing how public employee pensions are handled. Both ideas have raised the ire of the public employee unions, and neither is likely to move very far in the California Legislature. Merit pay for teachers is a very simple idea. Our school system should reward the good teachers. Currently state law mandates that each school district adopt a “single salary schedule”, and that pay increases can only be...

SACRAMENTO (AP) - The California Public Employees Retirement System board picked Rob Feckner, a 27-year school employee and statewide union official as its president Wednesday. Chosen in a 12-0 vote, Feckner replaced labor leader Sean Harrigan, who had led the board since 2003. Feckner said he would continue the $183 billion pension fund's traditional activism in corporate governance, while spotlighting high executive salaries and publishing a CalPERS "focus list" of long-term underperforming companies. "One thing should be abundantly clear to corporate wrongdoers who are hurting shareholder value," Feckner said as he took over the nation's largest public pension fund with...