CalPERS

Former California police chief charged in CalPERS double-dipping fraud case

November 25, 2022 By Randy Diamond 2 Comments

Criminal charges of grand theft have been brought against Greg Love, one of several Broadmoor Police Department chiefs and commanders that CalPERS said defrauded the pension system by collecting more than $2 million in excessive retirement payments. Another former chief, however, David Parenti, won’t be subject to any criminal prosecution. This despite CalPERS’ contention that he committed one of the largest frauds in its history. The pension plan said Parenti illegally received pension benefits of $1.8 million while with the 11-member department located 2 miles outside of San Francisco. The reason for a lack of criminal action? CalPERS misplaced the records for more than four years that detailed a complaint by a police officer at Broadmoor that his boss, Parenti, was double-dipping, collecting retirement benefits while drawing a salary as police chief and other positions, said San Mateo County Prosecutor Steve Wagstaffe. Wagstaffe said the four years is the statute of limitations for state criminal cases and CalPERS informed him of fraud violations in Parenti’s case only in 2021 after an audit of Broadmoor. That was more than four years after it received the original complaint about Parenti’s fraudulent behavior, Wagstaffe said.

“How they missed it is beyond me,” he said. “Purely on their failure to follow up on things is why Mr. Parenti is able to go free.” When The Bee reached out CalPERS officials, they did not address the missing complaint against Parenti. Instead, they disputed that the district attorney could have not proceeded criminally against him. “While charging decisions are the DA’s prerogative, we don’t necessarily agree that the statute of limitations has run in this case or that there aren’t other ways of pursuing this matter criminally,” CalPERS Chief Counsel Matt Jacobs said in a statement.

Jacobs didn’t go into specifics. Parenti’s civil attorney, Scott Kivel, said his client’s position is that he did not receive illegal retirement payments. CalPERS is seeking the return of the $1.8 it said that Parenti obtained fraudulently. Love, who was charged on November 15 by the San Mateo County District Attorney’s Office, collected around $700,000 in pension benefits after retiring from the police chief’s position in 2009 through 2012, Wagstaffe said. Love is scheduled to be arranged on December 9. His attorney Jeffrey Hayden did not respond to requests for comment. Love’s May 2009 retirement only lasted two days, even after receiving an unspecified workers compensation disability payout, which stipulated that he could no longer work as police chief, a CalPERS audit in 2021 showed. Love continued to be the full-time salaried police chief for Broadmoor through 2012 while continuing to collect the retirement benefits at the same time, the CalPERS audit determined. Wagstaffe said Love faces up to four years in prison. EQUAL JUSTICE? The District Attorney said he and his staff have had discussions about the different outcomes for Parenti and Love and whether that is fair. “Parenti is going to go free and Love is held accountable,” he said. “But in the end everyone gets evaluated individually. We have a job to do. We can’t try to even the playing field.” Wagstaffe, a long-time employee of the San Mateo County District Attorney’s Office, said he has had frequent dealings with Love in their roles as law enforcement officers over the years. “He is not a bad person,” Wagstaffe said. “It was a bad act that violated the law. He violated CalPERS rules and has to be held accountable.” The DA said he did ask the U. S. Attorney’s Office in San Francisco to consider taking the criminal case against Parenti, because federal statute of limitations is six years, two years longer than the state rules, but officials refused without disclosing why. The Broadmoor police department audit by CalPERS in 2021 and subsequent CalPERS findings found that Parenti and Love committed most of the department’s alleged fraudulent retirement benefits, totaling $2.3 million. While Love was found by CalPERS to have collected retirement benefits and salary for three years from 2009 to 2012, Parenti was accused of defrauding the pension system for 12 years from 2007 to 2019. CalPERS contends the fraud included Parenti receiving workers compensation disability settlement from the Broadmoor Police Department of $108,500 on August 4, 2017. While the settlement should have ended Parenti’s career, he continued working as a commander for the department full-time for two more years. This occurred, the CalPERS 2021 audit said, while Parenti continued to receive retirement benefits. HOW DID CALPERS ERR? What remains a mystery is how CalPERS missed the original complaint against double-dipping at Broadmoor. The former Broadmoor police officer who told CalPERS of Parenti’s double-dipping, Steve Landi, said in a Bee interview in February that he had reported the fraud to the pension system in November 2016. “They were lining their pockets for years,” Landi said. “It’s corruption at its finest.” CalPERS had insisted to The Bee that it never received Landi’s complaint. Wagstaffe said CalPERS officials first denied to him that there was a previous complaint, insisting they learned of the Broadmoor fraud first during the 2021 audit. “CalPERS originally told us (in 2021) we knew nothing about this until a little while ago,” Wagstaffe said, referring to CalPERS audit findings that year. He said after his agency insisted CalPERS conduct a review: “They found the complaint from Landi in their records.” Wagstaffe said there was break-down at CalPERS that it missed the complaint of fraud for more than four years. “Ultimately, we pressed them and pressed them and pressed them and they looked at the records, and said oh yeah it (the double-dipping fraud) was reported to us by one of the other officers in Broadmoor.” Wagstaffe’s statements raise new questions about the effectiveness of CalPERS to root out double-dipping and other violations of pension system rules. AN EARLIER CONCERN Broadmoor was under scrutiny by CalPERS for failing to enroll some officers in the pension fund in 2017, CalPERS has previously disclosed, but not for the double dipping by top police personnel. Former CalPERs insider J.J. Jelinicic told the Bee in February that the CalPERS division that monitors employee enrollment issues has little coordination with another unit assigned to examine double-dipping and other state retirement rule violations. “The right hand doesn’t know what the left is doing,” said Jelincic, a former CalPERS investment staffer and board member. Even routine audits of CalPERS employer units, like the one that discovered problems at Broadmoor, are rare given the large size of the pension system, which covers more than 2 million active and retired members and has more than $430 billion in assets. Around 240 audits are done a year but there are around 3,000 separate employer units representing municipalities, special districts and school systems that are part of CalPERS. On that schedule, it would take 12 years for every CalPERS agency to be reviewed. The pension system also represents state employees. Broadmoor is one of the smallest of the 3,000 CalPERS employers. In fact, the Broadmoor Police Protection Department is an anomaly in the state of California. There is no town or city of Broadmoor. The police department covers an unincorporated part of San Mateo County of several square miles and is surrounded by Daly City on three sides and Colma on one side. It serves around 8,000 residents. While he is facing no criminal penalties, CalPERS continues to demand that Parenti return the $1.8 million in retirement benefits he received between 2007 and 2020 while working as a police chief and in other positions at Broadmoor. “We are continuing to aggressively address Mr. Parenti’s actions on the civil front,” said CalPERS Chief Counsel Jacobs in his statement. “We strongly believe he wrongly received some $1.8 million in retirement benefits and will continue to pursue repayments of those funds.”

Click here to read the full article at the Sacramento Bee

Filed Under: Trending News Tagged With: California Politics, CalPERS, Fraud, Law Enforcement

CalPERS’ $29 billion Loss is More Than Just a Flesh Wound

August 2, 2022 By Jon Coupal 1 Comment

“Just a flesh wound,” protests the Black Knight in Monty Python’s famous “Holy Grail” comedy, challenging King Arthur to continue their duel even after all his limbs have been severed.

Similar happy talk is coming from the management of California’s big public employee pension funds after CalPERS, the nation’s largest institutional investor, posted a loss of $29 billion. When CalPERS reported on its end-of-fiscal-year performance, its July 20th press release was headlined, “Challenging global public markets, strong private market returns lead to varied performance.” Varied performance, indeed.

Overall, the hit to the system’s portfolio of investments was a 6.1% decline for the fiscal year that ended June 30. Stocks and bonds took the biggest hit while its real estate holdings actually gained, helping to avoid an even a bigger loss. But the drop from $469 billion to $440 billion is bad news for taxpayers.

Relax, say those who defend CalPERS and its system of “defined benefits.”

Ted Toppin, the executive director of the Professional Engineers in California Government, one of the state’s most powerful unions whose members reap big pensions under CalPERS, says in a recent Capitol Weekly piece, “Don’t be alarmed” over these record losses.

Well, of course not. His members and all participants in CalPERS — both currently retired or employed — can afford to relax because they know that if the investments by CalPERS are insufficient to cover their benefits, taxpayers are on the hook. So at the same time private-sector employees and the self-employed watch their own retirement portfolios sink, they also have to worry about higher taxes to cover the losses of the big public pension funds.

Fiscal watchdogs have been warning about this for more than 40 years only to be ignored by our elected leadership, whose cozy relationship with public-sector unions makes even modest pension reform nearly impossible.

As this column warned back in 2018, “California’s pension crisis exists in large part due to the very nature of defined-benefit plans. Unlike defined-contribution plans, where the taxpayers’ obligation to each public employee ends with every pay period, defined-benefit plans depend on a projection of future investment returns. And therein lies the problem. California has been horribly wrong in its application of assumed rates of return, leading to hundreds of billions in unfunded liabilities. And this shortfall is occurring in good economic times when the state of California is relatively flush. A recession will quickly expose this short-sighted thinking.”

It is difficult for citizen taxpayers to wrap their heads around the size of the problem. “A billion here and a billion there and pretty soon you are talking about real money,” as the late Senator Everett Dirksen famously quipped. But the best way to assess the risks to taxpayer is to consider the amount CalPERS must have to fully meet its obligations both present and future. Prior to the record loss, CalPERS was 80% funded, which some consider to be “fully funded.” The loss of $29 billion reduces the investments to an extent that CalPERS is now only 72% funded. The risk to taxpayers, the ultimate backstop, is going up.

Moreover, the notion that even at 80% funding CalPERS is healthy is wrong.

In fact, the American Academy of Actuaries calls this “The 80% Pension Funding Myth,” noting that “plans should have as their objective accumulating assets equal to 100% of relevant pension obligations.”

Trouble for CalPERS means trouble for local governments as well. David Crane, Research Scholar at Stanford and President of Govern for California, has previously noted that, even without a stock market crash, California would still be in trouble “because pension spending in California crowds out services [of local governments] at times.”

As local governments get squeezed, they are tempted to try risky strategies, such as issuing “Pension Obligation Bonds,” rather than control employee pension costs.

But POBs are magnets for litigation.

The Howard Jarvis Taxpayers Association has a winning record of challenging these esoteric debt instruments.

Click here to read the full article in the OC Register

Filed Under: Trending News Tagged With: California Politics, CalPERS, Gavin Newsom

CalPERS Board Restores $99,000 Pension for CHP Officer Convicted of Molesting Daughters

June 17, 2022 By Wes Venteicher 3 Comments

The CalPERS Board of Administration voted Wednesday to restore the $99,000-per-year pension of a retired California Highway Patrol officer who was convicted of sexually molesting his two daughters. Johnnie Swaim, 56, of Imperial, was convicted of four felonies by a jury in 2013 in Imperial County Superior Court for molesting the two girls when each was under 10 years old. He maintained he was innocent. Swaim was sentenced to 10 years in prison. In 2016, while in corrections department custody, he filed for retirement based on his last day of work for the CHP in 2011, and started receiving a pension, then worth about $93,300 per year.

CalPERS reduced his benefit last year to about $14,000, wiping out service credit for the time he worked after the date of first felony conviction, which CalPERS identified as in 1997. The retirement system cited a state law that prevents public employees who commit felonies in the course of their work from continuing to accrue pensions. Swaim appealed, arguing that his convictions weren’t work-related. An administrative law judge sided with him last month, saying that while his crimes were “despicable,” they weren’t connected to his work as a police officer.

On Wednesday, the board voted without discussion to accept the judge’s ruling and restore Swaim’s pension. With cost-of-living increases that have been applied since 2016, it will be worth about $99,000 per year.

Click here to read the full article in the Sacramento Bee

Filed Under: Top Stories Tagged With: California Politics, CalPERS, CHP

Decision on ‘California rule’ will impact who rules California

December 10, 2018 By Jon Coupal 3 Comments

On its surface, the case heard last Wednesday by the California Supreme Court in CalFire Local 2881 vs. CalPERS doesn’t seem that important. At issue is the so-called “California Rule,” an obscure legal doctrine relating to public employee pensions. But for California’s beleaguered taxpayers, the case is one of extraordinary importance because its outcome will determine the extent to which the local governments will look to taxpayers to shore up failing pension plans even more than they already do.

Labor interests have argued that under the “California Rule,” no pension benefit provided to public employees by statute can ever be withdrawn without replacement with some “comparable” benefit, even if it’s deferred compensation for services not yet provided, and even if the Legislature determines that citizens who are not public employees are unfairly suffering as a result of prior legislatures’ mistakes.

More than a decade ago, California politicians, seeking to curry favor with public-sector labor, began enacting laws to significantly increase public employee compensation. Among these enhanced benefits were a series of laws which allowed public employees to spike their pensions. For example, a 2004 state law allowed employees with at least five years of service to purchase up to five years of additional credits — commonly labeled “airtime” — before they retire. Under this plan, a 20-year employee could receive a pension based on 25 years of contributions.

To read the entire column, please click here.

Filed Under: Top Stories Tagged With: California Rule, CalPERS, Labor, unions

California Doesn’t Have a Budget Surplus

November 25, 2018 By Todd Royal 5 Comments

It’s become common folklore that California is booming and incoming Gov. Gavin Newsom and the Democratic supermajority have more taxpayer money than they will know how to spend, save or invest. Nothing could be further from the truth; and it’s the California voters and taxpayers who will continue to be pay for this mistake. We literally owe trillions that isn’t being discussed. Just the estimated payments on public employee pensions in California will increase from $31 billion in today’s dollars to $59 billion in 2024; and this number is based on non-recessionary conditions or a major correction in the stock market. And California immediately needs $800 billion to over $1 trillion worth of infrastructure repairs, upgrades and new construction.

A conservative estimate of California’s total debt by the California Policy Center in a 2017 study – before new tax and bond obligations recently voted in were factored – puts California’s total local and state debt at $1.3 trillion. The Stanford University Pension Institute (www.pensiontracker.org) in 2017 calculated California’s unfunded liability at $1.4 trillion and CalPERS also with an unfunded liability of $1.4 trillion, with CalSTRS billions underwater as well to give, “real state debt of $2.8 trillion.”

Whichever calculation is used California owes trillions and doesn’t have a plan in place to address this issue. What should be clear is that California does not have a surplus or anything near a surplus factoring in total debt and infrastructure for a basic, functioning society California citizens and non-citizens expect. This figure also doesn’t factor in health care costs rising under Covered California, Medi-Cal or possibly expanding Medicare to include all Californians living in-state.

These financial and societal facts will affect overall fiscal health and the ability to pay back debts accruing interest or fall under the category of a future obligation. Government services at the state, county and local level are at risk if a recent announcement by the CalPERS board is taken into consideration titled, “Risks Report,” highlighted, “The greatest risk to the system continues to be the ability of employers to make their required contributions.”

Taxpayers will have to make up the shortfall through additional taxes – like eliminating Prop. 13, voting in a VAT or services tax or some combination thereof – otherwise first responder response times, social services for the poor and needy, and environmental standard protocols will erode.

There are other factors California will need to overcome to pay back their debt and realize we do not have a budget surplus. California’s unemployment rate rate is 33^rd in the nation at 4.1%. The national unemployment rate is 3.7%. We have the highest taxes in the nation when the variables of the gas tax, state income tax, and sales tax are put into the equation. Additionally, California has the highest housing and rents in the nation per amount of residents. The median home price in California is roughly $544,900 whereas the remainder of the United States is estimated at $220,000. We artificially suppress housing supply (particularly, single-family-home) – though demand hasn’t diminished – driving up prices. Our stringent environmental standards evidenced by CEQA, SB 375, AB 32, SB 100 and CARB is hurting job growth and economic sustainability.

High taxes and regulations; and a tough business environment are some of the reasons why Toyota, Occidental Petroleum, and Nestle USA food conglomerate left California. Now the second largest firm in California – McKesson Pharmaceuticals is seriously contemplating leaving for Texas – according to a report by the San Francisco Business Times. The issue isn’t whether or not these companies leave; instead it’s the high paying jobs with benefits across all income spectrums being driven out of California. Moreover, we need successful firms to assist tackling the trillions we owe in pensions, bond obligations and infrastructure requirements.

After this recent election where it has become proper to bash Republicans – especially California Republicans – many will postulate there is no difference between Republicans and Democrats. When there is nothing farther from the truth. I’m not speaking about politics, which is essentially the means for winning elections and building coalitions for governance, I’m speaking about actual policies. How do you allocate taxpayer money? Do you want to tackle California’s debt or speak about a surplus instead? Do you believe in abortion, gay marriage, some form of socialism? Do you build a larger navy to confront global problems? Do you believe in fracking?

Those are policy decisions that have wide ramifications for California policymakers and voters. The California Democratic Party currently believes in spending more than it takes in by amounts it will never be able to recover; though incoming Governor Newsom showed variables of fiscal restraint as mayor of San Francisco. Of course there are establishment cronies and swamp-dwellers in both parties; but if you only take environmental policy using Tom Steyer as an example there has never been a more powerful oligarch in recent memory.

The planet and California isn’t better off for the policies Mr. Steyer advocates for and our poverty and homelessness continues being the worst in the nation. These are examples of policy decisions similar to believing there is a budget surplus that have long-term, negative ramifications.

What the surplus doesn’t take into account is California’s real poverty rate that the Census Bureau standard now has at 19% and 43.9% higher than the remainder of the US. Disenchantment and disillusionment with both parties is en vogue, but there is to much at stake in our financial future to allow the Democratic supermajority be let off the hook by continuing to spout the mantra of budget surplus.

Filed Under: Top Stories Tagged With: budget, CalPERS, CalSTRS, Covered California, Gavin Newsom, Medi-Cal

More Than 100 Local Governments Pursue Tax Hikes to Meet Soaring Pension Bills

November 3, 2018 By Chris Reed 6 Comments

Nine months after a League of California Cities report warned that pension costs were increasingly unsustainable, more than 100 local governments in the Golden State are asking voters for tax hikes on Nov. 6 – which Bond Buyer says is nearly double the record of 56 set in November 2016.

The Nov. 6 measures are on top of 36 city and county taxes that went before voters in the June 2018 primary.

Historically, local hikes in sales and hotel taxes are approved at least 60 percent of the time in California. They’re generally linked to a specific local need – not growing labor costs. With CalPERS’ bills to local governments on track to double from 2015 to 2025, such claims would seem dubious this election year.

Nevertheless – aware that voters likely would be cool to the idea of raising taxes to pay for pensions far more generous than those in the private sector – even now, many local elected leaders depict the hikes as necessary to pay for public safety or for fixing potholes and longer library hours.

Local officials assert hikes are about adding services

In the lead-up to the June primary, virtually the entire city leadership ranks in Chula Vista campaigned for a half-cent sales tax hike on the grounds that it was crucial to adding dozens of badly needed police officers and firefighters.

The tactic worked as Chula Vistans backed the increase. But city leaders’ claims of a coming public-safety hiring spree were impossible to square with the numbers from the city’s budget office. In April, it warned of “bleak” times ahead for San Diego County’s second-largest city, including an annual structural deficit that could reach $26.6 million by 2023 – with surging pension bills mostly to blame.

In Santa Ana, where voters are being asked to raise sales taxes by 1.5 percentage points on Nov. 6, the campaign for the tax hike rarely mentions pension costs.

But once again, a city bureaucrat framed the tax hike in more candid fashion.

“We’re not immune to the labor cost increases that are occurring throughout the state of California and throughout the country. We need to be able to provide additional services to the community. The question before the voters is what level of services do they want from their government?” Jorge Garcia, a top aide in the Santa Ana city manager’s office, told Bond Buyer.

Santa Ana’s pension bill is expected to go from $45.1 million in 2017-2018 to $81.2 million by 2022-2023 – an 80 percent increase.

‘The cause of this point-blank is CalPERS’

But some politicians have no patience with misleading narratives. “The cause of this point-blank is CalPERS and our pension fund,” Lodi Councilwoman JoAnne Mounce said in June when the Lodi City Council decided to put a half-cent sales tax on the Nov. 6 ballot.

As the League of California Cities reported in January, “With local pension costs outstripping revenue growth, many cites face difficult choices that will be compounded in the next recession. Under current law, cities have two choices – attempt to increase revenue or reduce services.”

The severity of the pension crisis is illustrated by the fact that it is sharply worsening in a period in which there is often seemingly good news on the fiscal front.

State revenue is expected to go up in 2018-19 for a 10th straight year.

County assessors report a 6.5 percent increase in property taxes this year. That’s triple the rate of inflation and comes even with Proposition 13 preventing increases of more than 2 percent on homes, businesses and other properties that didn’t change hands.

In July, CalPERS announced a second straight year of above-average earnings on its investment portfolio, which rose in value to $357 billion.

This prompted a news release from a top state union leader disputing talk of CalPERS’ poor health.

“While it’s important not to focus on one-year returns, these returns continue the long-term trend of CalPERS performing above or near its long-term discount rates and once again defying the sky-is-falling predictions of system critics,” wrote Dave Low, executive director of the California School Employees Association.

But despite the good returns, as of July, CalPERS only had 71 percent of funds needed to pay for its long-term financial liabilities, the Sacramento Bee reported. That’s far below the 80 percent funding level that is considered the absolute minimum for a healthy pension system.

This article was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: CalPERS, pension, Pension Reform, pensions

Locals Governments Seek New Levies Despite $4 Billion Property Tax Surge

October 19, 2018 By Dan Walters 11 Comments

Local government officials throughout the state got some very good financial news when county tax assessors toted up changes in taxable property values for their 2018-19 budgets.

The state’s uber-strong real estate market generated a 6.51 percent increase in those values, adding another $374 billion to the property tax rolls and pushing the total to $6.1 trillion.

That increase, three times the rate of inflation, translates into $4-plus billion more in revenue for cities, counties and other local governments. While schools also receive property taxes, they don’t directly benefit from the increase because of how state aid is structured.

The big winners are cities because, unlike counties and schools, they are almost totally dependent on local taxes and fees to finance their budgets. San Francisco, which is both a city and a county, reported the state’s strongest assessed valuation gain, 10.35 percent.

The very strong growth in property tax revenue, however, raises a pithy question: Why then are so many local governments, cities especially, complaining that they can’t balance their budgets unless local voters raise taxes?

There are 254 local tax increases on the November ballot – sales taxes, parcel taxes, utility taxes and hotel/motel taxes, mostly – according to the California Taxpayers Association, 65 percent more than there were four years ago.

The reason is that even with strong property tax gains, local governments’ pension costs are growing faster than revenues, thus putting the squeeze on their budgets.

Cities have been hit the hardest by increases in mandatory payments to the California Public Employees Retirement System (CalPERS) as it tries to shrink its large “unfunded liability.” City officials have repeatedly complained about the specter of insolvency if pension payments continue to grow and the League of California Cities has labeled the situation “unsustainable.”

With very rare exceptions, however, officials who place the tax increases on the ballot will not publicly say the extra revenue is needed to offset rising pension costs. Officials believe that telling the truth would make voters less likely to vote for the new taxes. It could also make employee unions less likely to provide money for tax campaigns.

Rather, on the advice of high-priced consultants, they say the money is needed for popular police and fire services and parks.

Unfortunately, most local news media are carelessly complicit in this conspiracy of silence, tending to accept the official reasons at face value, rather than analyze them critically. That’s true even though data about what revenue the new taxes would generate and projections of pension costs are readily available.

Over the weekend, for instance, the Sacramento Bee published a long article about proposed tax increases in Central Valley cities, quoting officials about what they hoped to do with the extra revenue, including Sacramento Mayor Darrell Steinberg, who called his one-cent sales tax hike a “game changer.”

However, the article only tersely mentioned pensions as something brought up by unnamed “critics,” even though the city’s own budget complains about pension costs and data indicate that the new taxes would largely go to pensions.

The Santa Cruz Sentinel, in a similar piece about new hotel/motel tax proposals in its region, took the opposite – and more responsible – tack by delving into how pensions are straining local budgets and driving tax hikes.

The Sentinel’s article, unfortunately, is a very rare exception. Otherwise, local officials and local media seem to believe that ignorance will be blissful.

Dan Walters is a columnist for CALmatters

Filed Under: Top Stories Tagged With: California Taxpayers Association, CalPERS, Property Tax, taxes

State treasurer seeks probe of CalPERS CEO

October 3, 2018 By Chris Reed 3 Comments

A rowdy, muckraking financial blog that has repeatedly raised later-corroborated concerns about how the California Public Employees’ Retirement System operates has gotten traction with one of its new allegations.

The Naked Capitalism blog’s report that CalPERS CEO Marcie Frost had misled the giant pension fund about her education prompted state Treasurer John Chiang to seek an independent investigation.

Naked Capitalism blogger Susan Webber offered evidence that Frost – who does not have a college degree – allegedly told a consultant who evaluated her job application before her hiring in 2016 that she was enrolled in a degree program at Evergreen State College in Olympia, Washington. The Sacramento Bee reported that she hadn’t taken any classes at the college since 2010. Before coming to CalPERS, Frost led Washington’s Department of Retirement Services, which oversees more than a dozen defined-benefit state pension funds.

In May, Webber’s reporting led CalPERS to oust Chief Financial Officer Charles Asubonten for making misleading claims about his employment history before he was hired.

With CalPERS’ new mess, a potentially big problem for Frost is that while she might be able to dismiss questions about whether she was honest over her education as the result of a misunderstanding, Naked Capitalism’s recent reports actually raise bigger concerns.

Accuracy of death-benefits claim questioned

For one example, Naked Capitalism writer Yves Smith last week wrote a persuasive analysis that argued that CalPERS had cherry-picked among data in claiming it was doing a better job processing death benefits in 45 days or less.

“CalPERS used an obviously cooked-up basis of comparison. Rather than take the same time period in successive years, CalPERS instead chose a set number of cases to examine (300 each) before and after a suspiciously arbitrary-looking cutoff date, February 12. Under questioning, the presenters admitted the ‘before’ cases included ones submitted in November and December,” Smith wrote.

“Why does this matter? The beginning of November through end of January is certain to be the worst time of year in terms of efficiency for a government agency. First, you have a high density of holidays compared to the rest of the year (Veterans’ Day, Thanksgiving, Christmas, Martin Luther King Day). Output suffers due to distractions like holiday shopping, more interaction with family members, and even getting out of the mood to work. Second, many employees also take vacation days around these holidays (and recall that CalPERS employees have generous vacation allowances). So there was also almost certainly reduced manpower to process claims during this period.”

There is no sign that Chiang or others with oversight authority are looking at this allegation. Last week, the CalPERS board made its feelings known about Frost, voting to raise her pay by 4 percent to $330,720 and to give her an $84,873 bonus.

Board officials suspicious of blog’s motives

A Sacramento Bee story last week about Naked Capitalism’s critiques of CalPERS gave space to CalPERS’ officials’ claims that there is something suspicious or perhaps partisan about an East Coast-based blog paying so much attention to a pension system across the nation.

In comments that the Bee reported were intended for Webber, CalPERS Vice President Rob Feckner said, “You’re not from California. Why would you be involved in a California election for that board? Why is it so important to you to get someone elected in that board?” Webber has been sharply critical of Feckner and other board members who have close relationships with Frost.

Naked Capitalism’s tart response: “CalPERS likes to relish its status as the biggest, highest profile public pension fund, but when it gets bad press, its stance is that it’s a parochial organization and why isn’t it left alone?” wrote Yves Smith.

No one familiar with the blog would consider it obsessed with CalPERS. The website’s roster of authors with Wall Street or banking backgrounds is long and their targets are widely varied. The site’s index cites nearly 5,000 stories about the global finance industry versus 98 about CalPERS.

This article was originally published by CalWatchdog.com

Filed Under: Top Stories Tagged With: CalPERS, John Chiang

Why Is Public Employee Disability Claim Data Being Kept Secret?

September 15, 2018 By Steven Greenhut 5 Comments

In the preamble to California’s Ralph M. Brown Act, the state’s 1953 law governing the public’s access to government meetings, the Legislature noted, “The people of this State do not yield their sovereignty to the agencies which serve them.” Likewise, the people “do not give their public servants the right to decide what is good for the people to know and what is not good for them to know.” The public insists “on remaining informed so that they may retain control over the instruments they have created.”

The same noble sentiment forms the foundation of California’s public-records laws, which govern the release of government documents. Yet a new lawsuit alleges that the California Public Employees’ Retirement System, which operates the largest state pension fund in the country, has been withholding some information that’s necessary to help the public to oversee the system and protect it from waste, fraud and abuse. It deals with disability benefits paid to pensioners.

Specifically, the Nevada Policy Research Institute, which cofounded with California Policy Center Transparent California (the website that publicizes the pay and benefit packages received by California employees), argues that CalPERS has denied its “request for records which would document the type (service, disability or industrial disability) of benefit received,” despite many requests. This information is so important because of the many news reports about the questionable workers’ compensation claims, the lawsuit argues. CalPERS itself recognizes the problem—”it has established a disability fraud tip hotline where it encourages the public to call in and report cases of suspected disability fraud.”

If CalPERS expects the public to help root out bogus disability claims by public employees, then why shouldn’t it provide the public with information that helps it do so? The research institute is merely seeking a one-word designation of the type of pensions that California retirees are receiving. Such information has not been specifically exempted from the California Public Records Act. Anything not exempted is, according to the lawsuit, fair game for public disclosure.

“CalPERS’ claimed sensitivity of information pertaining to the benefit ‘type’ (disability or service) is untenable because hearings related to appeals of denial of disability pensions are public hearings and recorded for broadcast,” according to NPRI’s court filings. Furthermore, the lawsuit argues that CalPERS “has consistently indicated” that it would not release that information. The lawsuit includes correspondence between NPRI and CalPERS backing that claim. CalPERS has yet to respond to the lawsuit and has declined comment to the media, but it has indicated that it believes such information to be an invasion of the recipient’s privacy. …

Click here to read the full article from Reason.com

Filed Under: Trending News Tagged With: CalPERS, transparency