Is CalSTRS Enabling Election Fraud?

One not-often-enough discussed issue is that elections of public pension fund board members are widely believed to be subject to undue influence by incumbent board members and their important allies, particularly unions. There are credible rumors in California, for instance, of unions pressing candidates who file as challengers to current board members to withdraw.

And that’s before you get to the fact that board member elections are subject to other forms of manipulation. Unlike other elections of public officials, board member elections are conducted by the organization itself. That’s a standard that no election monitor would ever deem to be acceptable.

A reader submitted a Public Records Act request for the election filing of the individual who opposed board member Harry Keiley, who has been on CalSTRS board since 2007, but then withdrew. This from the document that CalSTRS produced (the full form is embedded at the end of the post):

Screen shot 2015-09-28 at 11.32.55 PM

Here is the e-mail sent in response to the records production:

Subject: Public Records Act Not Fulfilled


The document you sent me yesterday cannot possibly be a true copy of the record I requested, which was:

“a copy of the “nomination certification” form submitted by the candidate described as withdrawing from 2015 election for the K-12 (non-administator) seat…”

The document you sent me was illegible in all of the information provided by the candidate other than her name! Since the document is illegible, it is not a true record, unless the record that CalSTRS itself possesses is also illegible in the same way.

I presume that you did not intend to redact the illegible information, since your transmittal letter contained no reference to withheld information or citation of the reasons, as required under G.C. 6253, for why the information was exempt from disclosure pursuant to the Public Records Act. Moreover, the illegible information was not blacked out according to the convention of record redaction.

I am sure that CalSTRS is aware that it is bedrock law in California, and across the U.S., that filings of candidates for public office are public records (other than social security numbers). To allow otherwise would severely undermine the capacity of the press and public to verify the integrity of election processes. Moreover, even if CalSTRS had offered some strained argument about the candidate’s privacy interests, which you did not, it would be impossible for CalSTRS to apply those arguments to some of the missing information, such as the candidate’s city of residence or zip code.

Since CalSTRS clearly did not intend to redact the illegible information, again, a conclusion I draw because you didn’t offer any legally-required justifications for redactions, I am left to conclude that there are only two other possible explanations. Either the document copy was corrupted in scanning, in which case I ask that you re-scan it and forward to me again, or the document was tampered with. This latter possibility is extremely troubling, as it would suggest criminal liability for whoever engaged in tampering with election records.

Please send me a true copy of the requested record.

Thank you.

This message was sent August 21. CalSTRS has not deigned to reply.

It’s critical to understand that it is a fundamental principle of of public records laws that election petitions are documents that members of the public can review. The underlying reason should be obvious: in the absence of independent oversight, al sorts of mischief can take place.

I attempted to contact a California teacher and former local union president Maggie Ellis who is almost certainly the same Maggie Ellis who withdrew the nomination. She is still working as a teacher but is no longer the president of her local. I am sure that were she contacted now that the unanswered question of her withdrawal was made public, she would deny the role of union pressure even if that were a factor.

As troubling is the position CalSTRS has taken: it is above the law, both the Public Records Act and potentially election laws. This is not the sort of conduct that is acceptable for any public body, let alone a fiduciary.

Nomination Form

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  1. Larry

    I’m also interested to hear what CalSTRS says about the record returned in response to the document request.

    1. Yves Smith Post author

      As indicated in the post. they’ve ignored the e-mail asking for a “true copy” and pointing out that if anyone doctored the records, they would be criminally liable.

  2. flora

    One can only wonder why unions would support current board members that are doing such a lousy fiduciary job of protecting union pension funds by investing in PE.

    1. Eric Patton

      The unions long ago stopped caring about the rank-and-file. The World Socialist Web Site is full of too much hate, but their criticism of union bureaucrats is spot on — sorry, David Macaray, this includes former bureaucrats like you too.

      Today’s unions are as much in bed with private equity as Betty Yee, Barack Obama, Jerry Brown, or any of the rest of them. Some shit needs to be torn down and rebuilt.

    2. diptherio

      “Unions” are not an entity with agency. Union officials are the ones calling the shots. What interest do they, personally have in letting Pirate (In)Equity play with pension money?

      Keep your eye on the ball and follow the money.

      1. TheCatSaid

        I haven’t spotted details about CalSTRS Board compensation. The CalPERS Board compensation might (!) be similar.

        The five CalPERS Board members who are elected from the union rank and file (however that is done . . . ) get to self-declare how much time they spend on CalPERS Board affairs and get paid their regular salary for that amount of time (e.g., 20%, 50%. . .).

        Some Board members have declared 100% of their time is spent on CalPERS Board business, so they get their full salary.

        See the Sacramento Bee article here.

        I’m not sure what conclusions can be drawn, however. J.J. Jelincic is one of the best-compensated Board members (100% of normal job’s salary for several years), yet he is the only one speaking out strongly at the moment. Some Board members get paid $0 if they are already public officials (and they seem to be providing zero benefit for their fiduciaries since they are clearly captured as NC has documented).

        Are CalSTRS Board members compensated similarly to CalPERS?

        It’s hard to know if there are other benefits hidden from view from being a Board member and/or for being a patsy going along with the GPs/PE industry. Do Board members of large public pension funds benefit from career moves or revolving door plays after retirement, as one might see with banking/lobbyists?

        1. Yves Smith Post author

          You assume everyone is motivated solely or primarily by money. Lots of counter-evidence to that. Start with Linux and open software. Some people, even now, care about doing the right thing or doing good work.

          Many people in the US use money as a way to buy status or influence. By sitting on a board of an organization like CalPERS or CalSTRS, you get that directly.

          1. TheCatSaid

            I agree with your points. My mention of JJ was in support of the concept that financial compensation does not necessarily indicate values or motivations. (Or more clearly–larger compensation does not necessarily indicate capture.)

            Integral Accounting speaks eloquently to the many ways that value exists. Our existing system is set up to focus almost exclusively on the “money” side–to our loss, individually and collectively.

        2. diptherio

          I’m sure having PE goons as buddies comes with a number of perks, even if money doesn’t happen to be the major one. Yves is quite right that it’s not just a matter of money (although I may have implied that). We need to stay focused on individual’s incentives, is my point.

          And I’m not surprised that JJ is getting full salary and also fulfilling his duty. Under-compensated public servants is a classic recipe for corruption. If you make good money doing your gov’t job, you don’t need to go looking for extra cash to pad your paycheck. I would be most suspicious of those who take minimal compensation for their duties. Where are they making their money?

          I would think it would be better to require board members to treat it as a full-time job and accept compensation accordingly–that way they have a personal stake in making sure the fund does well (since if it doesn’t they might get replaced and be out their salary) and beneficiaries can demand that they focus on their obligations to the job. Just a thought.

  3. reslez

    Imagine the temerity of the public expecting its institutions to obey the law. Obeying the law is expensive and annoying and therefore only for commoners. Thank you for pursuing this Yves/NC.

  4. Oregoncharles

    So what does the Cal. Atty. Gen.’s office say about it? Presumably just a copy of your post should get their attention, especially since the issue is now public.

    1. Yves Smith Post author

      Attorney general offices have limited resources and they would regard this as too penny ante to bother with. The more immediate threat is to get the press and legislature interested. CalPERS and CalSTRS are afraid of the legislature.

      1. Oregoncharles

        Hence your request on the other CalSTRS story to California readers, which I just saw.

        Interesting that Attorney General offices wouldn’t be interested (I’ll take your word for it).

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