[Yves asked me to sticky this. CalPERS should clever up – lambert]
Although it’s probably sensible to expect a public agency to resist providing information in response to a Freedom of Information Act filing, the lengths to which CalPERS has gone to mislead and obfuscate in trying to thwart my efforts is quite remarkable, particularly since some of the moves CalPERS staff took are in violation of CalPERS’ own procedures.
For readers who may be new to this site, CalPERS is the California Public Employees Retirement Systems. This state agency is the largest public pension fund, with assets under management at the end of October 2013 of $277 billion on behalf of 1.6 million employees. It also oversees health insurance plans on behalf of 1.3 million.
CalPERS is also one of the largest investors in private equity in the world and is seen as a sophisticated player. Starting in the early 2000s, CalPERS took to providing information on a quarterly basis about its private equity fund results, showing, among other things, quarterly net asset values by fund.
We’ve taken an interest in private equity return information and came across a study published in SSRN in February 2013 by three Oxford academics, Professor Tim Jenkinson, Miguel Sousa, and Rudiger Stucke. The paper makes clear that the researchers obtained data that was not previously made public. For instance, from the abstract:
This paper is the first to use the quarterly valuations and cash flows for the entire history of 761 investments made by Calpers -the largest US investor in private equity.
From page 2:
…we analyze the cash flow, valuation and performance data for the entire current and historical portfolio of 761 private equity funds invested in by Calpers….our data is essentially every quarterly update of this data, but going back many years before they released data to the public.
Moreover if you read further details about the data, they obtained a much larger data set, one that included real estate, “ones acquired in a secondary transaction, general and customized funds of funds,” and excluded them in order to arrive at the 761 funds (pages 7-8 and Table 1). The funds were described sufficiently clearly (presumably with a fund type field) that the researchers were able to classify follow on funds (p. 8). The researchers also state they received all data on these funds from the inception of the strategy in 1990 through and including March 31, 2012.
California has version of the Freedom of Information Act, called the California Public Records Act. CalPERS is subject to the PRA. Moreover, once an agency has given out a record to one member of the public, it has forever waived the right to claim any exemption from disclosing the records to others.
So I filled out the PRA form on the CalPERS website on September 29, 2013. However, in early October, I saw that my request has not been listed along with the new PRA requests filed in September. I filled out the form again, asking what had happened. A CalPERS public records act coordinator Barbara Galli said they had no record of my asking for the data (which seems implausible given that I received an auto-generated receipt) and asked me to send the request via e-mail. Because her message was tagged as spam, I did not see it for nearly a month and replied on November 12, 2013.
My request was again missing from the November log. In early December, I called and e-mailed to ascertain what was going on. I got no direct reply, but i did get a letter dated December 18. The critical part:
Staff continues to gather and review responsive information for disclosure under the Public Records Act. We estimate having the information to you by December 27, 2013.
However, December 27 came and went, early January came and went, and still no information. Again, I made calls (as directed in the letter!) and sent e-mails and got no reply.
I contacted a California attorney, Timothy Y. Fong, who sent a letter on January 30, 2014 to CalPERS Deputy General Counsel Gina Ratto which stated that if the information was not forthcoming, I was prepared to petition for a writ of mandamus and seek an award of attorney fees and costs (which is provided for under PRA).
Galli promptly sent Fong a letter dated January 27, 2014, which had been sent certified mail. The key section:
The information provided to the authors of the article you referenced was not provided by CalPERS staff. After an extensive search, staff has determined we do not have anything to produce in response to your request.
This is patently false as well as brazen. Notice what CalPERS is doing: they are trying to throw the researchers under the bus by stating that CalPERS staff did not provide the information. That raises the specter that the academics got it via some other route, say a former employee who had kept all this data or (horrors!) a hacker. The insinuation that CalPERS has not provided the data raises questions as to whether the data the academics used was accurate and complete.
I e-mailed the authors of the paper and the lead author, Tim Jenkinson, wrote back. He said that he had indeed obtained the non-public information directly from CalPERS in 2009. In a second e-mail, he reconfirmed that not only he, but one of his fellow authors, and one of the other authors, Ruediger Stucke, had dealt directly with CalPERS staff.
But aside from the flat-out dishonesty (the search was either not extensive or CalPERS misrepresented its results), consider the weasel-wording in the letter: “the information….was not provided by CalPERS staff.” But that was not what I had asked for. I had requested information provided by CalPERS. It is possible that the data was conveyed directly from a third-party data repository such as LP Capital to Jenkinson et al. But that is irrelevant as far as my request is concerned. It is well-settled California law that actions taken by agents within the scope of their agency are imputed to the principal. Thus, even if as a matter of form, the data was provided directly by LP Capital or another CalPERS data repository to Jenkinson and Stucke, it would still be disclosable under the PRA.
My lawyer Timothy Y. Fong wrote a stern letter to CalPERS on February 1, 2014. Suddenly CalPERS started making cooperative noises, claiming that perhaps an assistant of the professors had filed a public records request and they’d missed that. In fact, as I learned in Jenkinson’s second e-mail, that was not how they’d gotten the data. They simply asked for it directly of CalPERS staff members, which is a routine approach for him and his colleagues. His message made clear it took some time for CalPERS had to develop trust in them before they released the data.
CalPERS had asked me to specify what I wanted. I provided descriptions of the data from the article and added that we’d like if possible for it also to be brought current (the paper used data up through March 31, 2012; the notion, although not made explicit, was we could seek the additional data via a new PRA request).
On February 13, 2014, we were told that the information was too much to send by e-mail and a CD was going out that day. That was also false. What they sent was a mere 3 MB, clearly small enough to have sent by e-mail rather than creating an additional nine days of delay. And their cover letter attempted to act as if all we had asked for was the post March 31, 2012 data, when both the history and the description they’d requested made clear we wanted the data the academics had received. Peculiarly, though, they did include some not-public information in their files.
So here we are. You can read the filing below. It’s spare compared to Federal court filings; I’m told California state court judges are a busy lot and don’t like long recitations. A writ of mandamus is a fairly speedy process, so you should have an update within a month.
I also sent a letter to CalPERS board members. Note that this is not intended to have any impact on the court case, nor will it. Boards are instructed by in-house counsel to ignore routine litigation and let the attorneys handle it. However, I wrote for a separate reason: that the way my PRA was handled was completely irregular and looked intended to deceive the public. As a by-product, that meant the staff had abused procedures put in place to keep the board informed.