Pending bill opens door to pension corruption at CalPERS

Link: https://calmatters.org/commentary/2021/05/california-pension-calpers-corruption-legislation/

Excerpt:

Assembly Bill 386 sailed through the Assembly Judiciary Committee last week on a unanimous vote with virtually no discussion about its provisions.

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Potentially it opens the door to insider dealing and corruption in an agency that’s already experienced too many scandals, including a huge one that sent CalPERS’ top administrator to prison for accepting bribes.

CalPERS, which is sponsoring the bill with support from some unions and local governments, claims that the exemption is no big deal since the money it lends through “alternative investment vehicles” such as venture capital funds and hedge funds is already partially exempted from disclosure.

However, there is a big difference. Using outside entities to invest means they have skin in the game. Direct lending by CalPERS means that its board members, administrators and other insiders would be making lending decisions on their own without outside scrutiny.

Author(s): Dan Walters

Publication Date: 3 May 2021

Publication Site: CalMatters

Damschroder: Ohio teachers pension mauled by Panda

Link: https://www.thenews-messenger.com/story/news/2021/03/03/damschroder-ohio-teachers-pension-mauled-panda/6883736002/

Excerpt:

The Ohio Retirement Study Council (ORSC) revived oversight theater, a suit and tie simulation of supervising the $200 billion state pensions. In the first act, ORSC started the process for fiduciary audits of the teachers and police and fire pensions a mere five years after their legal deadline.

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In reality, STRS has recent evidence that alternative investments come with the risk of massive losses. The Ohio teachers’ pension was one of the first investors in Dallas-based Panda Power. Panda is a merchant generator building plants run by cheap shale gas to produce more profitable electricity. The business model collapsed when utility regulators did not approve anticipated rates. Panda’s bankruptcy filing showed debt of $400 million against cash on hand of $2,000.

Author(s): John Damschroder

Publication Date: 3 March 2021

Publication Site: Fremont News Messenger