Tag: California

The COVID-19 Disaster That Did Not Happen in Texas

Mary Pat Campbell
The COVID-19 Disaster That Did Not Happen in Texas

Excerpt:

Most businesses in Texas had been allowed to operate at 75 percent of capacity since mid-October, when Abbott also allowed bars to reopen. It was implausible that removing the cap would have much of an impact on virus transmission, even in businesses that were frequently hitting the 75 percent limit.

While Abbott said Texans would no longer be legally required to cover their faces in public, he urged them to keep doing so, and many businesses continued to require masks. At the stores I visit in Dallas, there has been no noticeable change in policy or in customer compliance.

Conversely, face mask mandates and occupancy limits did not prevent COVID-19 surges in states such as Michigan, where the seven-day average of newly confirmed infections has risen more than fivefold since March 1; Maine, which has seen a nearly threefold increase; and Minnesota, where that number has more than doubled. Cases also rose during that period, although less dramatically, in other states with relatively strict COVID-19 rules, including Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, and Washington.

Florida, a state often criticized as lax, also has seen a significant increase in daily new cases: 34 percent since mid-March. But Florida, despite its relatively old population, still has a per capita COVID-19 death rate only a bit higher than California’s, even though the latter state’s restrictions have been much more sweeping and prolonged.

Author(s): Jacob Sullum

Publication Date: 21 April 2021

Publication Site: Reason

California Has Seen a Staggering Amount of Unemployment Fraud During the Pandemic

Mary Pat Campbell
California Has Seen a Staggering Amount of Unemployment Fraud During the Pandemic

Excerpt:

After sifting through news myriad stories about California’s ongoing scandal at the Employment Development Department, however, I’m left wondering: Where is Ed Anger when you need him? I’m “pig-biting mad” about the ongoing unemployment mess, as an angry Anger might write. Yet California’s elected officials and a weary public are treating it like any garden-variety bureaucratic failure.

This is one of the most infuriating scandals ever to plague our state. The department, which is responsible for paying out unemployment insurance claims, has been incapable of paying legitimate claims even as it has paid as much as $31 billion in fraudulent ones, often to inmates. Think about those staggering losses. They would be enough to make a dent in any number of the state’s infrastructure, budgetary, and debt-related problems.

The stories are as unbelievable as the Weekly World News‘ latest Elvis sighting. Here’s a desk-pounder from CBS Los Angeles: “A Fresno girl who just celebrated her first birthday is collecting $167 per week in unemployment benefits after a claim was filed on her behalf stating that she was an unemployed actor.”

Author(s): Steven Greenhut

Publication Date: 23 April 2021

Publication Site: Reason

CalPERS Employee Accused of Embezzling $685,000 from Beneficiary Bank and CalPERS Accounts Hasn’t Been Arrested, Much the Less Prosecuted. Why the Cover Up?

Mary Pat Campbell
CalPERS Employee Accused of Embezzling $685,000 from Beneficiary Bank and CalPERS Accounts Hasn’t Been Arrested, Much the Less Prosecuted. Why the Cover Up?

Excerpt:

As you can see from the embedded filing below, CalPERS is suing Gloria Najera, a former employee it says embezzled $685,000 from beneficiaries, including, Wells Fargo style, from a beneficiary’s bank accounts.

The civil claim is sketchy on the timetable, but Najera was a clerical worker responsible for updating beneficiary addresses and bank direct deposit information. That apparently also gave her access to at least the last four digits in their Social Security numbers. Najera used this information to pilfer directly from the bank account of one beneficiary to the tune of nearly $69,000. For nine others, she diverted funds from dormant CalPERS accounts (where CalPERS had reason to think the beneficiary was still alive but had only out-of-date bank deposit information) to bank accounts controlled by Najera and co-conspirators.

Yet despite CalPERS allegedly informing the police about the theft back in January, the perp of this huge embezzlement of beneficiary trust funds hasn’t even been arrested, much the less charged.

CalPERS instead is taking the virtually unheard of approach of merely filing a civil suit, rather than letting a prosecutor file criminal charges, even though California law requires that a criminal court order full restitution on behalf of CalPERS.

Author(s): Yves Smith

Publication Date: 22 April 2021

Publication Site: naked capitalism

San Diego’s pension payment spiking $50M, worsening budget crisis during pandemic

Mary Pat Campbell

Link: https://www.sandiegouniontribune.com/news/politics/story/2021-01-17/san-diegos-pension-payment-spiking-50m-worsening-budget-crisis-during-pandemic

Graphic:

Excerpt:

San Diego’s annual pension payment will rise by nearly $50 million this June, making it much harder for the tourism-reliant city to balance its budget while tax revenues continue their sharp slide due to the COVID-19 pandemic.

The city’s pension board is requiring a $49.3 million spike in the annual pension payment — from $365.6 million a year to $414.9 million — because estimates of long-term pension debt rose this year from just over $3 billion to $3.34 billion.

Author(s): David Garrick

Publication Date: 17 January 2021

Publication Site: San Diego Union-Tribune

Peter Roff: Beware the Pension Bailout Hidden Inside COVID-19 Relief Bill

Mary Pat Campbell

Link: https://www.noozhawk.com/article/peter_roff_beware_pension_bailout_hidden_inside_covid_19_bill_20210403

Excerpt:

California’s total estimated pension liability is something like $1 trillion. To balance its books, Sacramento had to get money from taxpayers in Florida, South Dakota, Utah and, other, better-managed states (through the COVID-19 stimulus) to close the gap.

Whether it will be enough to stop municipal fire departments from bringing private ambulance and medical services “in-house” is yet to be seen. Hopefully, it will — which would be a good thing for taxpayers and people in need.

Otherwise, the pattern of using federal reimbursements for services provided to cover the losses in underfunded public employee pension plans will continue, much to the determinant of taxpayers.

Author(s): Peter Roff

Publication Date: 3 April 2021

Publication Site: Noozhawk

CalPERS Rejects Reinvesting in Tobacco Again

Mary Pat Campbell

Link: https://www.ai-cio.com/news/calpers-rejects-reinvesting-tobacco/

Excerpt:

Saying he wanted to boost portfolio returns, California Public Employees’ Retirement System (CalPERS) investment committee member Jason Perez made a second try at reversing the pension plan’s ban on tobacco stocks. But Perez’s proposal was overwhelmingly rejected Monday night.

At a meeting of the CalPERS investment committee, Perez’s new attempt—his first was in March 2019—attracted only one other vote on the 13-member panel, from Margaret Brown. The ban has been in place since 2001.

The $440 billion pension system would have earned an additional $3.6 billion in investment gains if it kept tobacco stocks in its portfolio between Jan. 1, 2001, and June 30, 2020, according to an analysis by Wilshire Associates, a CalPERS general investment consultant.

Author(s): Randy Diamond

Publication Date: 16 March 2021

Publication Site: ai-CIO

CalPERS Shoots Itself in the Foot: Undermines Its Position in Insolent Letter Demanding JJ Jelincic Drop His Case Against Secrecy Abuses

Mary Pat Campbell
CalPERS Shoots Itself in the Foot: Undermines Its Position in Insolent Letter Demanding JJ Jelincic Drop His Case Against Secrecy Abuses

Excerpt:

As you can see below, CalPERS issued more ultimatums: drop the suit and provide what amounts to a document retention request to the board member that provided his notes to Jelincic.

And why should Jelincic withdraw his case? The argument is the legal version of a pratfall. Jelincic told he is liable for “aiding and abetting” an alleged breach of fiduciary duty by a a board member and interfering with CalPERS’ contract with said board member.

First “aiding and abetting” exists only in a criminal context. Even if there were actually a there there, please tell me what universe a prosecutor is going to saddle up to go after a CalPERS board member over a dispute over a clearly improperly noticed board meeting….and charge Jelincic too?

Second, the only fiduciary duty the board has is to beneficiaries. The reason California has such strong transparency laws is that its default is that secrecy is bad for the public and is not allowed unless there are compelling arguments on the other side.

Author(s): Yves Smith

Publication Date: 25 March 2021

Publication Site: naked capitalism

Marin County Tries a Universal Basic Income Program

Mary Pat Campbell

Link: https://www.governing.com/community/Marin-County-Tries-a-Universal-Basic-Income-Program.html

Excerpt:

Marin County, Calif., supervisors have allocated $400,000 to participate in a universal basic income experiment with the Marin Community Foundation.

The foundation plans to spend $3 million to give $1,000 a month to 125 low-income women for 24 months. To qualify, the women must have a child under the age of 18.

“The ultimate endgame for this demonstration project is to have an example of how cash aid can be really helpful in terms of alleviating poverty, to test the usefulness of this approach to addressing poverty and addressing some of the racial inequities that we know exist in the county and beyond,” Johnathan Logan, a foundation vice president, told the Board of Supervisors before the unanimous vote on Tuesday.

Author(s): RICHARD HALSTEAD, THE MARIN INDEPENDENT

Publication Date: 25 March 2021

Publication Site: Governing

Can Fiscal Alchemy Bolster Public Pension Funds?

Mary Pat Campbell

Link: https://www.governing.com/finance/Can-Fiscal-Alchemy-Bolster-Public-Pension-Funds.html

Excerpt:

One way to put a quick sheen on pension funds’ balance sheets is to issue municipal bonds at a lower rate of interest than the pension fund is expected to earn. These “pension obligation bonds” (POBs) have a long and checkered history. The first one was sold tax-exempt by the city of Oakland, Calif., in 1985. It stirred up a hornet’s nest at the IRS, which quickly realized that the lower tax-exempt interest rate was subsidized by Uncle Sam in a no-brainer for the pension fund that in theory could just invest in taxable bonds to make a profit, even without risking money in stocks. Congress was prodded to prohibit the use of tax-exempt debt where there is a profit-seeking investment “nexus,” and thus was born a thick book of IRS “arbitrage” regulations. Consequently, POBs must now be taxable, with a higher interest cost.

When interest rates are low, as they are today, the underwriters and many financial consultants come out of the woodwork to pitch their POB deals. The lure is always the same: “Over 30 years, you will save money because history shows it’s almost a certainty that stocks will outperform low bond yields,” even if they are now taxable. I’ve written extensively on the foreseeable cyclical risks of selling POBs when the stock market is trading at record high levels: The underwriters and deal-peddlers will sneak away with their fees from the deal, and public officials will be left holding the bag whenever an economic recession or stock-market plunge drives the value of their pension funds’ “new” assets below the level of their outstanding POBs. The Government Finance Officers Association (GFOA) has long opposed POBs for this reason, among others. POBs make sense to me only when they are issued in recessionary bear markets.

Author(s): Girard Miller

Publication Date: 16 March 2021

Publication Site: Governing

Bipartisan Opportunism Is to Blame for California’s High Tax Rate

Mary Pat Campbell

Link: https://www.hoover.org/research/bipartisan-opportunism-blame-californias-high-tax-rate

Excerpt:

A current example of California’s bipartisan capitulation to public employees is OPEB—formally, “Other Post-Employment Benefits”—chiefly, health insurance for retired employees and their dependents costing the state $10 billion per year. Those benefits are provided even when the retiree or dependent has another job that offers insurance, is covered by Medicare, or is entitled to premium support from the Affordable Care Act.

No other state in America showers such subsidies on retired employees, who are already entitled to the highest pensions in the land. But both parties have been obstacles to OPEB reform because both fear retribution from government employee unions. If you have any doubt about that, check out donations to legislators on both sides of the aisle.

Author(s): David Crane

Publication Date: 12 March 2021

Publication Site: Hoover Institution at Stanford University

Borenstein: Pension cuts for California public employee felons upheld

Mary Pat Campbell
Borenstein: Pension cuts for California public employee felons upheld

Excerpt:

No, California public employees can’t commit felonies on the job and then keep their pensions earned while they were perpetrating their crimes.

“When misconduct turns into outright criminality, it is beyond dispute that public service is not being faithfully performed,” the state Court of Appeal has concluded. “To give such a person a pension would further reward misconduct.”

The February ruling in a “felony forfeiture” case from Contra Costa and a similar December appellate court ruling in one from Los Angeles County correctly reject arguments from two firefighters that they are entitled to their full retirement pay despite their felonious conduct while working.

Author(s): Daniel Borenstein

Publication Date: 12 March 2021

Publication Site: Mercury News

Former Board Member JJ Jelincic Sues CalPERS Over Illegal Secret Board Discussion After CIO Ben Meng’s Abrupt Departure and Hiding of Records Related to $583 Million Overstatement of Real Estate Assets

Mary Pat Campbell
Former Board Member JJ Jelincic Sues CalPERS Over Illegal Secret Board Discussion After CIO Ben Meng’s Abrupt Departure and Hiding of Records Related to $583 Million Overstatement of Real Estate Assets

Excerpt:

We seem to be returning to a semblance of the old normal, including CalPERS getting well-deserved public attention for its bad behavior, highlighted in a new lawsuit filed by former board member JJ Jelicic, which we’ve embedded at the end of this post. It’s short and very readable; slightly more than half the pages of the PDF are exhibits.

CalPERS under its general counsel Matt Jacobs has more and more openly been taking the position that it is above the law. A slapdown is long overdue.

Both of the matters the lawsuit targets are strong on legal and public interest grounds. We’ll get into a bit more detail below. The short overview is that they come out of sweeping and highly dubious denials of two different Public Records Act requests that Jelinicic submitted. One focuses on to impermissible secret board discussions shortly after then Chief Investment Officer Ben Meng’s sudden resignation last August. The second involves CalPERS’ continuing efforts to hide records showing how it came to overvalue real estate assets by $583 million. Yet CalPERS not only has said nary a peep about bogus valuations are larger than the total amount it was slotted to invest in a mothballed solo development project, 301 Capitol Mall, but it continues to publish balance sheets that include the inflated results.

Author(s): Yves Smith

Publication Date: 10 March 2021

Publication Site: naked capitalism