Adam Ashton of the Sacramento Bee reported that on Friday, CalPERS has decided to review the claims that its recently-hired Chief Financial Officer Charles Asubonten made on his resume. While this is an overdue development, the tenor of this story leaves open the question as to whether the inquiry will be far reaching enough.
As we’ll discuss, the reasons for harboring doubts about the probe are:
Ashton’s article referred only to misrepresentations on Asubonten’s resume, when he also appears to have made them on his Form 700 and his employment application. The last two are particularly serious, since both documents are filed under the penalty of perjury. We obtained a heavily-redacted version of Asubonten’s employment application via a Public Records Act request. We have embedded the document at the end of this post. Despite how much is hidden, one section is at odds with what former executives at one of his employers told us during our earlier research into his resume.
Asubonten depicted one of his references as the CEO of Palabora Mining Company, one of his former employers. That individual never held any such role and was never a superior of Asubonten’s. It is hard to see this and an accident, since in a vetting process, applicants provide the names of people who can assess their performance, such as a boss or a client executive. Such a brazen misrepresentation should in and of itself be grounds for termination.
Asubonten’s credentials for the CFO role are so weak that several individuals who know CalPERS speculated that he must have had a patron. Some evidence suggests CEO Marcie Frost pushed his candidacy. She has also stuck her neck out quite far in defending him in light of the considerable evidence of not just one but multiple misrepresentations on documents provided to CalPERS and the State of California
We’ll give a brief recap of the Sacramento Bee article before turning to these issues.
Sacramento Bee on CalPERS’ Review of Asubonteh’s Claims
The SacBee story gave credit to Naked Capitalism and linked to our site, but only made an oblique reference to what almost certainly precipitated CalPERS’ action, which was a report by Los Angeles Times reporter Mike Hiltzik, Questions about new CalPERS CFO’s background and experience should be taken seriously by the pension fund, which ran online on Monday and on the front page of the business section on Wednesday. Not mentioning that the Los Angeles Times reviewed our account and did independent reporting has the effect of downplaying the seriousness of the allegations about Asubonten’s resume.
Ashton also failed to mention that Asubonten’s Form 700, filed under penalty of perjury, appears to be non-compliant. Is his silence due to the fact that CalPERS plans to avert its eyes from this issue?
We strongly urge you to read the article in full. Key sections:
The nation’s largest public pension fund is reviewing its decision to hire its chief financial officer following a report on a financial news blog that suggested he embellished details in his recent work history on his résumé, CalPERS said on Friday…
The review follows an April 11 analysis by the blog Naked Capitalism that challenged CalPERS Chief Financial Officer Charles Asubonten’s résumé. It asserted that he exaggerated his role at a South African mining company a decade ago and that he misrepresented his work experience after his contract with the mining company expired…
“Asubonten falls dramatically short of CalPERS’ required ‘professional competencies.’ Not only has he not worked for ten years in a large pension fund or financial firm overseeing complex operations, he has no financial institutions experience whatsoever. Running what was at best a microscopically small private equity business does not qualify. Nor does having been the chief financial officer at two mining sites,” Webber wrote….
Board President Priya Mathur said Frost is “handling this matter with all due diligence and sensitivity. What I have seen of Charles’ performance is that he has been a very effective CFO since joining CalPERS.”
It is not clear how Mathur could have seen enough of Asubonten’s work to have an informed point of view on his performance.
Further Misrepresentations on Asubonten’s Employment Application
We’ve embedded Asubonten’s heavily redacted employment application below. We also e-mailed CalPERS on April 13, promptly after we received this clearly deficient response, demanding that CalPERS send a version of the form that showed all the information that was required to be disclosed. We have yet to receive a reply. The CalPERS response was so clearly short of what was required that we are considering litigation. 1
Page 3 of Asubonten’s employment application covers his time at Palabora Mining Company. Here are the misrepresentations:
Asubonten was not Chief Financial Officer or a Director through July 30, 2010. Both a court decision in South Africa and Palabora’s annual reports show that his employment as CFO ended on December 31, 2009. The 2010 annual report shows that he did not attend a single board meeting in 2010 and he “resigned” from the board on July 8, 2010.
In the “Duties Performed” section, according to another Palabora executive committee member during Asutonten’s time there who also acted as Chairman of the pension fund, Asubonten greatly exaggerated his role. The management of the pension fund was a “ceremonial” position that was rotated among the members of the executive committee. All of the work of managing the pension fund was outsourced.
The only role the Chairman performed was to organize meetings of the outsourced managers/administrators with Palabora and Rio Tinto management and other stakeholders and coordinate other information.
It is inaccurate for Asubonten to state that he “projected the benefit obligation” (this is not credible as a claim, since that is done by actuaries, and Asubonten is not an actuary), or that he was responsible for the “administration of plan benefits…responsible for the planning and directing of the financial and investment management of the employee pension fund” or was the.”main plan administrator.”
The employment application also contains a misrepresentation that we discussed at length in our post, CalPERS CFO Charles Asubonten’s Form 700 Violation and His Unduly Mysterious Private Equity Firm. We pointed out that his private equity firm not only had operated under different names and had no website, phone number or physical office connected with any of its too-many names, but that the address that Asubonten did provide was to a personal mailbox in a UPS Store in a strip mall. Worse, even that address was invalid because UPS would not have accepted mail delivered to the address Asubonten provided. Only mail in his personal name, with the mailbox number listed, would have been accepted.
Asubonten’s Bogus Reference
CalPERS needs to check the names Asubonten listed as supervisors on his employment application, which was you can see below CaLPERS has impermissibly redacted. This matters because Asubonten misrepresented a reference that CalPERS CEO Marcie Frost appears to have relied upon and failed to verify independently.
Through JJ Jelincic, Marcie Frost offered to have the CEO of Palabora contact me and reassure me about Asubonten after my posts ran.2 I found this to be peculiar since I had given both Asubonten and CalPERS had had ample time to correct any errors before I launched my series.
But even more bizarre was that the idea of speaking to the Palabora CEO was nonsensical. Asubonten left Palabora at the end of 2009. Palabora now has a Chinese CEO who worked previously in the steel busines. Most important, the South African court decision in Asubonten’s dispute with Palabora made clear that Asubonten’s personnel records were at Rio Tinto, not Palabora. So current Palabora management could not possibly have any information about Asubonten beyond what was in past company annual reports that were already available online.3
I called a contact who had taken interest in this situation to sputter about it. He too had been encouraged to speak to a Palabora CEO…and he was not Chinese. He sent me the references CalPERS provided for Asubonten by e-mail:
Palabora Mining Co.
+27 83 634 0758 Australia
Sr. VP & Corp. Controller
Ford Motor Co.
Prof. Emeritus, Finance & International Business
Univ. of Michigan
+65 9654 7505 Singapore
The “Australia” bit is puzzling, particularly since Palabora never had operations in Australia and the number provided for Brazier is in South Africa (country code +27), not Australia (country code +61).
But the far more important part is that Dennis Brazier was never CEO, Managing Director, or even a board member of Palabora. Marcie Frost can only have gotten this information from Asubonten, and it is flagrantly false. Worse, the fact that she would try to fob off a bogus reference on me and an independent party shows she continues to rely blindly on information Asubonten has provided even after his honesty has come into question by virtue of anextensively-documented series of posts.
Dennis Brazier was only “general manager – Copper Processing” from August 2004 through all of 2007 as Palabora’s 2007 and 2008 annual reports show. The 2008 annual report does not list Brazier as part of the management of Palabora but does describe Bill Scheding as having been “appointed General Manager – Copper Processing and Magnetite business in October 2008.” This is consistent with Dennis Brazier’s LinkedIn profile, which show him joining Palabora in January 2001 and rising through the ranks to his promotion to General Manager of Copper Processing in August 2004, a position he held though June 2008, when he left for Union Copper. LinkedIn also shows Brazier as back in South Africa, and the phone number for him is from South Africa.
Brazier as the General Manager of Copper Processing was part of the then seven member executive committee of Palabora. However, he would likely have been less influential than committee members like the Managing Director and Asubonten, both of whom were also board members.
Consider what this means. Asubonten and Brazier together are misrepresenting to CalPERS that Brazier was the CEO of Palabora. The only reason one can fathom for such a con is that Asubonten needed a reference from Palabora that was better than anyone who actually supervised him would provide, and for whatever reason, Brazier was willing to go along.
Bear in mind that if Asubonten listed Brazier on his employment application as his supervisor, that is perjury, a felony in California.
It is also worth noting that CalPERS’ due diligence is so wanting that the phone number it gave for Peter Daniel at Ford is out of service.
Is Marcie Frost Asubonten’s Sponsor?
Both experts we contacted while preparing our series on Asubonten, as well as readers in the financial services industry all regarded Asubonten’s qualifications to be CFO as sorely lacking. Several speculated that Asubonten must have had a backer even to be considered seriously for the CFO position. Some thought he might have had allies in the California Democratic party, but Asubonten does not appear to have been a meaningful donor or been involved in fundraising. Another track in could have been the unions, but Asubonten does not appear to have connections there either.
The only trail we have identified so far is via Marcie Frost. That does not necessarily mean she was his main backer, but there is reason to think she pushed his candidacy along.
Mike Hiltzik reported that Asubonten had been on search firm Heidrick & Struggles’ initial list of candidates, but Hiltzik stressed that it’s not clear whether Hedrick & Struggles interviewed him or did any resume vetting. Recall that CalPERS had first chosen board member Richard Gillihan for the post, only to have him withdraw after CalPERS and Gillihan realized his taking the position would violate conflict of interest laws that prohibit California government officials from profiting from contracts they made (Gillihan had been involved in approving the pay level for the job).
CalPERS then brought the search in house.
In May 2017, when the first round of the search was on, CalPERS and CalSTRS hosted a diversity forum. Asubonten attended and approached JJ Jelincic. Asubonten mentioned that he was down to his last business card. Jelincic referred Asubonten to Marcie Frost, since Frost, unlike Jelincic, was involved in hiring. Asubonten mentioned this incident later to Jelincic as if it were significant.
Mind you, this does not mean much by itself. However, we were stunned by how Frost has handled the controversy. She not only choose to speak directly to the Los Angeles Times about Asubonten, but she did a joint call with Asubonten. Merely speaking to the press about an employee in hot water is a very risky move. The usual play is to have either the communications department or an outside PR firm handle the messaging. If the institution wants to show more support, they have a senior executive provide a short statement. For a CEO to speak to a reporter directly, about a personnel matter, gives their personal backing in away that is is hard to retreat from later, both psychologically and practically. Even more astonishing, Frost did so when it was clear that no one on her team evaluated any of Asubonten’s reassurances after our stories ran.
Frost then doubled down on that error by making the phone call to the Los Angeles Times jointly with Asubonten. That makes her a party to any misrepresentations he makes to the reporter. As we described in detail in our most recent post on Asubonten, he told a whopper. Asubonten claimed he’d never really been unemployed and that a 28 month employment gap on his resume was taken up by a failed effort to buy Palabora. We described why the time lines don’t come close to supporting his story.
Asubonten has played CalPERS and Marcie Frost for fools. The biggest favor Frost can do for herself is distance herself from Asubonten as much as possible First and foremost, she should recuse herself entirely from the investigation into his misrepresentations and authorize the team tasked to this affair to do a serious job. Asubonten has told far too many verifiable falsehoods for him to be a sound choice for any executive position, least of all for one responsible for banking relationships. If Frost does not cut her losses, Asubonten will pull her down with him.
1 From our e-mail:
Dear Ms. Ramirez,
Thank you for sending me the document you attached. However, CalPERS’ response is patently non-complaint with the requirements of the Public Records Act. Moreover, the citations used as a pretext for withholding information that is subject to disclosure are obviously not applicable, to the degree that any independent and informed party reviewing CalPERS response, such as a judge, a journalist, or the First Amendment Coalition, would deem it to be in bad faith.
Section 6254 (c) does not apply by virtue of resumes and employment applications having been deemed repeatedly by California courts to be non-sensitive, non-protected information.
In Eskaton Monterey Hospital v. Myers, 134 Cal. App. 3d 788, 794, 184 Cal. Rptr. 840 (1982), the court found that “information as to the education, training, experience, awards, previous positions and publications of the (employee) . . . is routinely presented in both professional and social settings, is relatively innocuous and implicates no applicable privacy or public policy exemption.” Moreover, the court held that job applications and resumes of those chosen for the job are not exempt from disclosure.
Specifically, Braun v. City of Taft, 154 Cal. App. 3d 332, 347, 201 Cal. Rptr. 654 (1984) applied the Hill test in determining whether disclosure was required under PRA; cf. Versaci, 127 Cal. App. 4th at 818; and applying three-part determination that: (1) the document sought constitutes a personnel file, medical file or other similar file; (2) disclosure would compromise substantial privacy interests; and, (3) the potential harm to the privacy interests outweighs the public interest in disclosure.
First, the information in this application does not rise to the level of “substantial privacy interests,” save a very limited number of data fields, such as Mr. Asubonten’s Social Security number and his earnings history. In fact, in Braun, 154 Cal. App. 3d at 347, the court recognized that the “personnel” exemption was developed to “protect intimate details of personal and family life, not business judgments and relationships.” Thus virtually all of the redactions, such as of former supervisors and reasons for leaving previous jobs, are not “intimate details” but information about Mr. Asubonten’s professional life and cannot be withheld.
Second, the third test overwhelmingly favors disclosure given the general importance of verifying the accuracy of applications provided by holders of senior CalPERS positions, and even more so in the case of Mr. Asubonten, given concrete evidence of multiple misrepresentations on the resume he submitted to CalPERS.
Third, the overwhelming majority of information that has been redacted is public and/or has been presented by Mr. Asubonten, confirming that he does not regard it as sensitive. For instance, the names of Mr. Asubonten’s supervisors at Mopani Copper Mines, Palabora Mining Company, and DTE Energy are already public via annual reports, articles, listings on websites, SEC filings, and/or court records. The past supervisors would have made their job titles and work history public on LinkedIn and other social media, and as Eskaton Monterey Hospital v. Myers held, is therefore also subject to disclosure. Any current work phone numbers or e-mail addresses of those past supervisors is also not protected, since those phone numbers are under control of their employers, are routinely disclosed on business cards and e-mails, and may be reassigned by the employer at any time. Only home phone number of previous supervisors could be deemed to be their private information.
Mr. Asubonten’s reasons for leaving Mopani Copper Mines and Palabora Copper Mines have also been made public by those employers, as we have discussed in recent posts on our website, with supporting embedded documents, accounts, and/or links to public documents.
Mr. Asubonten’s home addresses from 2013 to present are also in the public domain, as is his date of birth (11/04/1962 per cubib.com) and even his signature (see numbered page 24: http://www.palabora.com/documents/annual_report_2008.pdf). Mr. Asubonten has also disclosed that he is fluent in French, meaning he does not regard his language skills as protected information.
The effort to invoke attorney-client privilege (sections 6254 (k) and Evidence Code 1040) is obviously in bad faith. The application was submitted before Mr. Asubonten was hired and hence could never be attorney-client privileged information since it is impossible for him to have been a client of CalPERS prior to his becoming an employee on October 2, 2017.
We discussed the balancing test (Section 6255) above, but we also separately note that invocation of this section is virtually never affirmed by courts, and we are prepared to challenge the overreaching and unwarranted redactions in court. There is an obvious, indeed, overwhelming case for full disclosure of Mr. Asubonten’s application save the very few instances of protected information like his Social Security number.
Finally, Section 18934 is obviously not applicable by the fact of your having sent even a redacted application. By sending the document, you have conceded this section is not germane.
Please send me a compliant response to my Public Records Act request promptly. Thanks for your help.
2 I never heard from him.
3 Since title of the most senior manager at Palabora when Asubonten worked there was Managing Director, not CEO, as you can see in the relevant annual reports, Frost didn’t seem to be referring to relevant executives (and that’s before you get to the fact that I’d already contacted them).Asuboneten Employment Application
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