Lawsuit claims prison receiver is padding state pension with federal salary

A Sacramento lawsuit alleges that prison receiver J. Clark Kelso – with help from a federal judge, the state courts and CalPERS – is padding his state pension with his federal salary.

Daniel E. Francis v. Board of Administration for the California Public Employees' Retirement System contends that Kelso's employment deal illegally washes his pay through the state' Administrative Office of the Courts so that the money can be factored into his retirement.

Francis is bringing the suit as a taxpayer, retired state worker and CalPERS member.

Kelso's total compensation came to about $270,000 last year, according to state payroll data, of which $214,000 was base pay. In 2009 his base wage was about $6,000 more, with other compensation totaling $107,000. Kelso's pension is based on a percentage of his highest year's base wage.

Kelso told The Bee last November that the arrangement, while unusual, was thoroughly vetted and is both legal and ethical.

CALPERS is the centerpiece of Cali Dem's criminal enterprises.

EXCERPT---Jan 2011--- sacbee.com---Just how deeply in debt are Cali state and local governments? The answer: No one knows for certain, since debt is scattered through myriad agencies in many forms, but well over a half-trillion dollars is a fair estimate.

Warnings pertained to the state's "general obligation debt," which currently stands at $59 billion, and there are an additional $50-plus billion in general obligation bonds that have not yet been sold. The biggest chunks of debt, however, are the unfunded obligations for pensions and health care of retired public employees. (more below)

REFERENCE----CIRCA 2006
By Peter Schweizer, Research Fellow at the Hoover Institution

SNIP---.......it seemed the perfect fit: Bill Clinton, corporate reformer, signing on as a senior adviser (and "active adviser," according to a company press release) to the Yucaipa Corporate Initiatives Fund and the Yucaipa American Fund. Both get all their cash from pension funds from public-school teachers and government workers in California and New York state.

CALPERS, the huge California public-employee retirement fund, has agreed to commit $500 million to Yucaipa, and the California State Teachers Retirement System (CALSTRS) another $150 million. Millions more are to come from the New York State Common Retirement Fund.

Clinton's job, when he joined Yucaipa in April 2002, wasn't just to help make the rich richer: These were to be "investment funds that specialize in lower-income urban and rural communities," as The New York Times reported. Yucaipa managing partner Carlton Jenkins told Black Enterprise magazine that the funds were seeking out "urban-based minority or female-owned businesses."

And Clinton's role in the fund, Yucaipa head Ron Burkle made clear, would not be passive. "He's invaluable," said Burkle, explaining that Clinton would help raise money and offer investment advice to the funds. But a venture that was supposed to help minority businesses and secure the future of pensioners in two of America's biggest states seems to have done anything but.

The Yucaipa Corporate Initiatives Fund has already poured millions into Al Gore's new cable channel, Current Television. Gore's venture is headquartered in a tony neighborhood of San Francisco, which certainly doesn't seem to fit the definition of a "lower-income urban" community. Nor is it minority-owned — indeed, all the major investors are white males. (Indeed, by a who's who of major Democratic Party money people — including Joel Hyatt, former Democratic National Committee finance chairman, Rob Glaser of Realnetworks and Bill Joy of Sun Microsystems.)

Yucaipa told the San Francisco Weekly that Gore's enterprise "has a strong commitment to increase the representation of women and people of color." But the upper management of the network is completely white.

The hundreds of millions flowing from California retirement funds to exclusively Dem friends and allies in businesses, come courtesy of California Treasurer Phil Angelides, a longtime Clinton political ally. Then- running for governor, his bio mentions his important role (as state California Democratic Party chairman) in electing Bill Clinton to the presidency. The banner photo across his Web site features him standing side-by-side with the ex-president.

Yet, while all the players in the Yucaipa funds are Democrats, they seem a bit confused about their social mission. When Clinton joined up, The Yucaipa American Fund proudly announced that its purpose was to invest in "industries and companies that maintain strong corporate governance practices and are sensitive to the interests of their employees."

Tell that to the employees of Aloha Airlines. The fund is backing a $100 million deal to take over the airline — but it has attached some very tight strings: It's making the deal contingent upon terminating the pilots' pension plan and contract. Yet the federal Pension Benefit Guaranty Corp. says the pension plan is not the problem; the airline can readily afford it. Pilots responded with a strike. (Just to round things out, the two major shareholders in the airline, Hawaii's Ching and Ing families, give overwhelmingly to Democrats.)

Meanwhile, the workers whose pensions have been invested in Yucaipa are getting a terrible deal. According to CALSTARS, California teachers have already committed $61.9 million of the $150 million that they promised Yucaipa. As of last March 31, three years after the venture started, they'd seen a grand total of $837 come back to them. Overall, the rate of return since the funds launched have been a loss of 12.1 percent.

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Calpers failed to disclose:

(1) the state budget was on the hook for shortfalls should actual investment returns fall short of assumed investment returns,

(2) those assumed investment returns implicitly projected the Dow Jones would reach roughly 25,000 by 2009 and 28,000,000 by 2099, unrealistic to say the least

(3) shortfalls could turn out to be hundreds of billions of dollars,

(4) Calpers's own employees would benefit from the pension increases, and,

(5) members of Calpers's board had received contributions from the public employee unions who would benefit from the legislation.

Had such a flagrant case of non-disclosure occurred in the private sector, even a sleepy SEC and US Attorney would have noticed. You said just what I was going to say. Sure, Calpers "did not disclose." But 99% of the California legislature sat on their hands and were willing participants in this fraud.

If a huge bill, with a huge price tag, with a huge financial obligation that extends way into the future, gets passed without more than one legislator raising one question about it, what in Hell's Bells are these people being paid to do?

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