Free Republic

The ex-CEO of CalPERS, Fred Buenrostro, has just pleaded guilty to accepting doucers, cash bribes and fees for placing investment business with a specific firm. The economic point that this helps us elucidate is why bankers and fund managers make such vast incomes normally. It’s a concept called “efficiency wages”. Essentially, when stripped right down, if people are handling or responsible for a large amount of money then pay them very well. So that it’s not actually worth their trying to do anything naughty, the risk of losing that high income is greater than what they can gain by being...

SAN FRANCISCO -- Federal officials on Monday charged the former head of the nation's largest pension fund and one of his business associates with falsifying documents and other charges in a long-running influence peddling and bribery investigation. A grand jury in San Francisco charged Federico Buenrostro Jr. and Alfred Villalobos, and they were booked and released on bond Monday after briefly appearing in court. Buenrostro, 64, served as CEO of the California Public Employees' Retirement System from late 2002 until June 2008. Villalobos, 69, served on the CalPERS board and is a former vice mayor of Los Angeles. The indictment...

More shoes may be dropping at the California Public Employees' Retirement System. Forty-nine staff members, including the president and chief investment officer, have been notified they are being investigated by the Fair Political Practices Commission for possible violations of gift reporting requirements. ... some of the potential violations went back five years. The investigation grew, indirectly, out of the scandal involving outside placement agents and their allegedly corrupt links to senior CalPERS executives

The Los Angeles Times breaks some major news this morning: In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms. A 17-month investigation also found that Federico Buenrostro Jr. — along with former pension fund board members Charles Valdes and Kurato Shimada — strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro. The report, prepared for the California Public Employees' Retirement System by Washington law firm...

In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms. A 17-month investigation also found that Federico Buenrostro Jr. -- along with former pension fund board members Charles Valdes and Kurato Shimada -- strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro. ... The findings of insider dealings at CalPERS could provide fresh ammunition to Republican lawmakers here who want Democratic Gov. Jerry Brown to convert...