As readers may recall, we filed suit against CalPERS on February 27, 2014 to obtain access to private equity fund data that CalPERS previously gave to two academics at Oxford University. We have proof of service as of March 4, 2014 (please find both filings embedded later in this post). At around that time, CalPERS moved the matter over internally from being handled by its Office of Stakeholder Relations, which includes Public Records Act specialists, to a litigator.
You’d think that’s pretty conclusive evidence that CalPERS knows we’ve sued them.
CalPERS’ Interim General Counsel, Gina Ratto, is telling CalPERS board members the exact opposite, that there was no new litigation filed in the past month. That statement is made at the location in the agenda materials where the CalPERS General Counsel reports to the board on new lawsuits to which CalPERS is a party (you can also view this document on the CalPERS website).
Now astute readers might argue that CalPERS could have a threshold of materiality before the legal department is required to report a particular legal action to the CalPERS board. We have reason to doubt that. Individuals who have knowledge of CalPERS’ internal practices have taken interest in our work. One well placed source has told us that this report customarily includes even trivial legal disputes and added, “Historically, there was no materiality test applied as to whether a suit merited being reported.”
While it is possible that CalPERS has changed its procedures of late, CalPERS’ previous irregularities in its handling of our Public Records Act request suggest that these procedural failures are the result of an effort to keep disclosure of our inquiry to the bare minimum. CalPERS staff failed, contrary to long-standing internal policies, to tell its board about our records request on a timely basis.
As we wrote in an earlier post, my PRA was handled in a completely irregular manner, with the apparent intent of deceiving the public. CalPERS publishes a monthly log of PRA requests, and its practice is to include PRAs when filed. Mine was lodged in September, yet was not included in any of its monthly logs, which are also the board’s tool for monitoring PRAs, until CalPERS took the brazen and inaccurate position that the matter was settled in late January, a full five months later. That meant the staff had ignored procedures put in place to keep the board informed.
If our beliefs are correct, the only conclusion that one can reach is that CalPERS’ staff thinks their interests are so closely tied to those of the private equity industry that even its general counsel’s office is willing to abuse multiple well-established reporting procedures to keep its board in the dark (please see the form of our letter to board members on this matter at the very end of this post). If so, this is deeply troubling from a corporate governance standpoint. It indicates an independent review is necessary to see if the board is being misled on other private-equity-related matters.