Constructive? CalPERS? Let’s hope wisdom on anti-corruption bill spreads to big picture

San Diego Union-Tribune ^ | 4/5/10 | Editorial

[NormsRevenge]

Outside of the Legislature itself, no government body has done more to damage the Golden State than the California Public Employees’ Retirement System. Its successful push in 1999 to change state law to allow public employees to receive huge retroactive increases in their pensions was sold with the absurd argument that such a gift of public funds could be provided at little or no long-term cost. This argument was based on the irresponsible premise that the stock market bubble of the late 1990s would continue indefinitely.

Eleven years later, cities, counties and other government agencies up and down the state face ruin because the pension spikes proved unaffordable. Yet even as this pension wreckage builds – even as CalPERS’ own actuary declares pension formulas to be “unsustainable” – CalPERS depicts itself as put-upon and underappreciated. A skeptical Bloomberg News Service story last year led a CalPERS spokeswoman to trash the writer as an “anti-pension ideologue” and a “vulture.” The agency even set up a Web site to counter its critics – www.calpersresponds.com – that denounces as “myths” any talk that pension benefits are too generous or too costly and that rewrites history to absolve itself of any blame for anything.

This was not an agency that appeared capable of reform. Nevertheless, we are pleased – and surprised – to report that CalPERS has some capacity for change. The agency is strongly supporting a bill by Assemblyman Edward Hernandez, D-West Covina, that would ban commissions paid to “placement agents” who try to persuade CalPERS officials to invest pension funds in particular investment firms, projects or assets.

Such a bill was inevitable after reports that Alfred Villalobos, a former CalPERS board member turned placement agent, earned at least $70 million in commissions from his clients for securing investments from CalPERS and the California State Teachers’ Retirement System. On Villalobos’ payroll: Fred Buenrostro, a former CalPERS chief executive. Meanwhile, the California Attorney General’s Office is now following up on allegations of placement agent corruption that grew out of a New York investigation that led to several criminal convictions.

What was not inevitable was that CalPERS, defender of the status quo, would join Treasurer Bill Lockyer and Controller John Chiang in supporting such a sweeping measure over the objections of powerful Wall Street interests and a network of politically connected insiders. Opponents are so influential that Lockyer suggests Hernandez faces an uphill fight in getting his bill passed.

So perhaps CalPERS is supporting the measure because it knows the legislation will die. The agency’s history inspires such cynicism.

Or perhaps CalPERS is finally developing a mature management culture capable of admitting error. If this is true, that would be great news. The extreme cost of the present system has made inevitable a vigorous bipartisan debate over pension reform. It would be greatly helpful if CalPERS played a constructive role in this debate – instead of standing on the sidelines, mired in denial.

[NormsRevenge]

They could fill a new state prison with all the crooks working the system ,, from the inside and outside..

[truthguy]

ping for later

[La Enchiladita]

The agency is strongly supporting a bill by Assemblyman Edward Hernandez, D-West Covina, that would ban commissions paid to “placement agents”

Too little, too late. They also made bad investments, lost tons of money. This self-righteous support for the bill is a distraction from their utter corruption.