CalPERS Can’t Even Figure Out How to Count Ballots in Accordance With Its Own Election Regulation, Let Alone Comply With California Law

In our last chapter of the shaggy dog tale of CalPERS’ election fiasco, we recounted how board candidate Margaret Brown had made a field trip to CalPERS’ election vendor, Integrity Voting Systems, a division of K&H Printing, to see what they were doing with the ballots in the CalPERS election. The majority of ballots are mailed in; CalPERS also allows for voting online and by phone.

Background on CalPERS’ Unconstitutional, Non-Secret, Insecure, Unauditable Election

As we’ve discussed, CalPERS’ new election procedures have fundamental flaws. Among other things, CalPERS violated the California law by making it possible to identify how individuals voted. The ballots proper have to be signed for the vote to be deemed countable, plus every ballot has a bar code linked to a specific individual. CalPERS is also using online voting, which California election statutes prohibit.

Brown’s site visit uncovered even more problems. The ballots are not being held securely (they were in a room with the door propped open and were not locked up overnight). They are being processed before the election has concluded, which is a violation of CalPERS’ own regulation (the rule it passed, supposedly in accordance with California law, except it isn’t since it explicitly provided that the paper ballots themselves be signed).

The fact that IVS is scanning ballots on a daily basis and deciding what to do with ballots that get mangled or are marked in a way that the scanners don’t register means that votes are not being tabulated in public at the end of the election as CalPERS’ regulation stipulates. Remember the hanging chads in Florida in the 2000 Presidential election? One of the most important parts of election monitoring is to have third parties review how ballots that aren’t cleanly marked to see if the voter intent can be inferred and the vote included in the tally. Processing ballots daily makes public tabulation impossible. That is presumably a feature, not a bug.

Brown wrote a letter to CalPERS CEO Marcie Frost and board describing some of the violations of law and procedural problems she had found. CalPERS then held a meeting with the election subcontractors and the candidates, supposedly to assuage the candidates’ concerns. As we described, not only were there way many embarrassed silences but CalPERS and the vendors also told several obvious lies, from which they had to retreat.

After the meeting, another board candidate, Michael Flaherman, wrote a letter to Marcie Frost describing in detail why CalPERS election procedures violated the state constitution, election laws, and CalPERS’ own regulation. We’ve embedded his letter below and strongly encourage you to read it in full.

Flaherman also explained why the changes in election procedure, which were just implemented, look like vote suppression, aimed most of all at active employees who are union members. They would have reason to fear retaliation if they voted against the candidate their union recommended and union supervisors could find out how they had voted.

Why is this line of thought plausible? Consider this section of a transcript from a CalPERS board meeting in August 2016, when the first version of the change in CalPERS voting procedures was presented to the board (emphasis ours):

Operations Support Services Division Chief Kim Malm: At this time, I’d like to take a minute of personal privilege, Mr. Chair. I’s like to thank the staff that have worked really hard on this over the last couple of years. Anthony Martin, Christina Nutley, Nina Dinsdale, and Dallas Stone from my staff. Also Erin Lopez and Renee Salazar from the Legal Office, and also Public Affairs. We would not have been able to do this without them, in addition to the constituents that have been extremely supportive over the last couple of years. And especially Dave Low and Terry Brennand who kind of got this in front of some people – important people to help us push this forward. So I’d like to say thank you to all of them, in addition, of course, to my Executive, Doug Hoffner and the Board.

David Low is the executive of California School Employees Association. Terry Brennand is the pension director for SEIU. Pray tell, why are senior union officials permitted to have behind-the-scenes influence on how CalPERS runs elections? And worse, why did David Low think he had the right to participate in the meeting with the candidates on September 20 about the election procedures? The union backed candidates, David Miller and incumbent Michael Bilbrey, blew that meeting off. But Low tried to dial in. He wasn’t allowed to participate but CalPERS’ head of media relations, Brad Pacheco, said he’d brief him later. Rest assured that no ordinary CalPERS beneficiary who’d tried to join the meeting would have been extended that courtesy.

In the interest of not taxing reader patience, we have omitted some other glaring problems. For instance, the fact that Everyone Counts, the vendor for online voting (which remember is illegal in California) has run elections for mere neighborhood councils in Los Angeles that were fiascos and that Everyone Counts’ phone number for the CalPERS election (for phone voting, getting replacement ballots, and other questions) is manned by people working out of their homes who have access to the full CalPERS election database….and some, perhaps all, are contractors, not employees. Please read our earlier post or Flaherman’s letter below for more unsavory details.

CalPERS’ Can’t Get Its Act Together on Ballot Counting Now That It Has Been Caught Out

Recall that Candidate Brown visited IVS in Everett, Washington, which is where CalPERS beneficiaries are mailing completed ballots. IVS has been opening the envelopes as they come in, scanning them, and adjudicating them every business day. IVS told Brown then that they were not counting votes, that that would be done by Everyone Counts at the end of the election. The IVS employees also stated that Everyone Counts did everything online and had no equipment for processing paper ballots.

Consider how this conflicts with CalPERS’ own regulation:

On the date specified in the Notice of Election at the location designated by CalPERS, the validated paper ballots shall be tabulated publicly by an independent, neutral agent appointed by CalPERS for that purpose.

It is clear that:

1. The paper ballots are to be “tabulated”. That means the ballots proper, not scanned images.

2. The date is a “date specified,” meaning one and only one date in the the Notice of Election. And that means all at once, at the end of the election. And that date must be October 2.

But CalPERS and its vendors have given four stories so far, and a new story is due out at 9 AM on Friday.

First story: images would be sent to Everyone Counts to be tabulated. This is what IVS told Candidate Brown and her witness during her site visit in Everett, Washington. The IVS representatives were quite insistent that they weren’t counting the votes, even though the equipment they were using for processing the ballots was not only capable of recording the votes, that was clearly its main use and the image retention was for audit purposes.

Note that this procedure obviously does not comply with the regulation.

Second story: ballots would be counted at IVS in Washington. In the meeting among CalPERS, its election contractors, and the candidates on September 20, Brown asked where she should go to view the ballots being counted. She was then told in Washington. She pointed out that that wasn’t what she was told earlier, that she’d been informed that the images would be sent to Everyone Counts, tabulated there, and those results combined with the phone and online totals. She got a long silence. CalPERS general counsel Matt Jacobs then said he’d have to get back to the candidates.

The candidates had to ask repeatedly for information as to where they should go at the end of the elections to view the tabulation of the paper ballots. It took a whole week to pry an answer out of CalPERS.

Third story:

Revised third story: Two and a half hours later, the election coordinator sent a revised memo with a different suite number.

Brown sent this e-mail to CalPERS’ CEO later that day:


I just received this notice from the election coordinator’s office.

The Notice of Election approved by the CalPERS Board of Administration stated that ballots would be tabulated on October 2nd. Further, your regulations require the physical ballots be tabulated in public. I know that the ballots are located in Evertt Washington. How are the physical ballots being transported to Everyone Counts for tabulation?

I’ve also never heard of a nine hour delay in the tabulation of votes. Any such delay calls into question the election results.

Please be advised that if your vendors do not tabulate the physical ballots in public, and/or do not start the tabulation process immediately after the close of voting, I will consider CalPERS to be out of conformance with its Notice of Election and regulations.


Margaret Brown

If you read the notice, you will see it does not say that the candidates will view the tabulation of the votes, but the “ballot tabulation process”. That suggests that all the candidates will see is a tidy demo, not the actual count, which we suspect has been done daily, in violation of the election rules.

If the IVS employees told Brown the truth when she visited their facility, that Everyone Counts does not have any vote counting equipment, the only way “ballot tabulation” could comply with the CalPERS’ regulation would be for all the ballots to be transported to La Jolla, and for either IVS’ tabulation machines to be shipped as well or for Everyone Counts to gear up for a manual count.

To add insult to injury, the election coordinator’s message is dishonest by depicting Integrity Voting Systems and Everyone Counts as one business. They aren’t. They have not formed a joint venture and when pressed by Mike Flaherman in the September 20 meeting, they said instead that they had entered into an operating agreement for the CalPERS election. Consistent with that, the embedded “Notice to Award Contract” clearly shows that the contract was awarded to two companies, not one, and that Everyone Counts, and not IVS, is in Ja Jolla. A web search also returns no hits for addresses for IVS or its parent, K&H Printing, in Ja Jolla. CalPERS apparently thinks this obfuscation is necessary since it told the board that only IVS was its new election vendor, and also falsely said that IVS was certified by the Secretary of State. In fact, K&H Printing is certified only to do printing and finishing of certain types of election ballots. IVS does not have any certifications in California.

Fourth story in progress: CalPERS realizes it still has a problem. CEO Frost to candidate Brown at 12:09 PM yesterday:


We’re updating the Fact Sheet to answer your questions on vote tabulation. I’ll get that out to you and the board candidates by the end of today.


And then at 3:04 PM:

Hello Margaret,

We’re going to need a little longer to get the elections sheet updated. I’ll have it to you by 9:00 a.m. tomorrow.


As those of you who have been paying close attention have probably figured out, the only way CalPERS can comply with its own regulation is to count the paper ballots (or at least start counting them) where CalPERS voters were instructed to mail them and where Brown saw them being processed, in Everett, Washington. Any other procedure introduces a time lag that was never contemplated in the regulation, and for good reason, as Brown insinuates. A delay between the close of voting and the processing of votes creates the opportunity for meddling.

So we’ll know in a little while whether CalPERS is prepared to adhere to its own regulation, or just tries to bulldoze its way through. One of the annoyances in dealing with CalPERS is that its general counsel Matt Jacobs doesn’t even bother covering up the fact that he is making stuff up. Even propagandists take far more pride in their tradecraft.

Redacted Michael Flaherman Election Letter to Marcie Frost_Redacted
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  1. The Rev Kev

    At what point does someone say, hey, this is illegal as hell. Then the next thing is having the SWAT cops bust through some doors and handcuff themselves some perps? After that you would have computers being bagged and tagged and going out the door while a team of accountants would be going over the books with a fine tooth comb. There is no doubt that laws are being constantly broken but having them enforced has become something of a moveable feast these days.

      1. Ted

        I wrote to the California Attorney General, and they replied instantly that since they had to defend state agencies in court, they could not help.

  2. flora

    ” The ballots are not being held securely (they were in a room with the door propped open and were not locked up overnight). They are being processed before the election has concluded, which is a violation of CalPERS’ own regulation (the rule it passed, supposedly in accordance with California law, except it isn’t since it explicitly provided that the paper ballots themselves be signed). ”

    You write that as if it’s a problem. /s Seriously though, what better way for CalPERS to insure it gets the board members it wants?

    1. Ballots not being held securely = potential for ballot stuffing, (or unstuffing the “wrong” votes.)
    2. Ballots processed before election concludes = ability to only count the votes needed for a win and lose the ballots that vote the wrong way. Auditing will be impossible.
    3. Ballots signed by voters = political or employment reprisal possibilities – documents for creation of an “enemies list”, if you will.

    This is too carefully orchestrated, complete with the built-in “who could have know” deniability by apparent sloppiness for any of this to be by accident. This is machine politics 101. Next time my CA friends remark on the deplorable flyover states I’ll remind them that at least we still have clean elections, for the most part.

    Thanks for your continued reporting on CalPERS and pensions.

    1. wilroncanada

      Sounds like the vote was organized by the California Democratic Party.

      Yep. Integrity Voting Systems and Everyone Counts Inc.–sounds like the Democratic Party to me.

  3. Quanka

    At what point does Matt Jacobs lose his job for flagrantly not doing anything that even remotely resembles that of providing legal counsel? This seems so egregious its approaching on the absurd.

  4. James McRitchie

    Normally, I’m on the list to receive notices of proposed regulations of CalPERS. I’ve taken a strong interest in rule making their since I ran for the board several times. Sorry to have missed the rule making for these crazy elections. I don’t know if I was out of the country or if they missed sending them to me. I wish I would have read and commented. Maybe we wouldn’t have such a mess now.

    It is clear that Flaherman and Brown offer the best hope of an open and accessible board with the highest ethics.

  5. Jess

    Maybe we can get the same FBI agents who busted the sports agents for bribery to investigate CalPers?

    Works for me.

  6. Wisdom Seeker

    Looks like a strong case to invalidate the “election” results. This “election” MUST NOT be allowed to set a precedent for the State of California.

    Additional concerns which I hope someone in the process will raise:

    1) The transmission of scans – digital ballot images – to be “counted” opens the door to digital alterations (“Photoshopping”) of the actual ballots. Voter markings could be erased with software and new markings added.

    2) In the current situation, allowing unsigned ballots to be counted, while the ballot storage area is not secure, creates the possibility of “non voter ballots” – fake ballots – being introduced to skew the outcome. Given the processing pipeline being used, this could be done with either extra paper ballots or scanned digital files.

    3) It sounds like the ballot-printing company is also performing the ballot scanning? If so, the company could generate fake, but perfectly proper-looking paper or digital ballots at will, since they know how the barcodes were generated AND know which ballots have not been returned yet. Because of the potential to generate fake ballots, the company and individuals printing the ballots should NEVER be involved in the vote tallying process.


  7. chicagogal

    Might be a dumb question, but why did they hire an out-of-state ballot counting firm? I’m sure there are such companies located within the great, and large, state of California so the only reason I can think of is to ensure tampering occurs in order to keep the rabble rousing bad candidates off the board!

  8. Lambert Strether

    This is just gobsmacking. If CalPERS isn’t even able to organize an election for its (one assumes) governing body according to its own rules, state law, and the state Constitution, what else are they not able to do?

    At the very, very best this is a complete failure in basic blocking and tackling.

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