CalPERS to Investigate CFO Charles Asubonten, But Will It Look into Misrepresentations on His Employment Application?

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:

Dennis Brazier
Palabora Mining Co.
+27 83 634 0758 Australia

Peter Daniel
Sr. VP & Corp. Controller
Ford Motor Co.

Gunter Dufey
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 and even his signature (see numbered page 24: 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.

Susan Webber

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
webber 3698 final
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  1. The Rev Kev

    Just being very unkind here but I have a possible theory as to why the Sacramento Bee story came out the way it did. Los Angeles Times reporter Mike Hiltzik has already put out his researched article on CalPERS so the question of Asubonten’s qualifications has now been aired out in the main stream media in California. If this whole story blows up in connection with the management of CalPERS itself, the Sacramento Bee may have had people questioning why this newspaper – a Californian one – had nothing about this story as it was breaking. I would imagine that a lot of Californians would be very touchy on the subject of their retirement finances after all. This story may have been a way for it to cover itself so that they could point out this story and claim that they were on top of it if it develops further. Just a theory.

    1. Adam Eran

      The Bee is a paper with a history of labor troubles, and a multimillionaire CEO. This is what passes for “liberal” now.

      It publishes a daily “business” section, and publishes a labor column every other week. That’s about how “liberal” it is

      1. Adam Eran

        I’ll also add that the Bee regularly publishes columns that promote panic about National “Debt” … Here’s one it (re)published last week from WaPo.

        Letters written to correct the debt panic are never published.

  2. Rex the Wonder Dog!

    Bear in mind that if Asubonten listed Brazier on his employment application as his supervisor, that is perjury, a felony in California.
    Making false statements on a resume is not perjury. “Perjury” is making a FALSE SWORN STATEMENT, under oath; “under penalty of perjury”. Resumes and CV’s are usually “puffed up” to some degree. How much is a good question. I would bet it varies wildly depending on the person. But in any event, even flat out whopper lies are not perjury on a resume, or anywhere else unless sworn to “under penalty of perjury”. Perjury IS a felony in CA, Penal Code section 118, with a 2, 3 or 4 year prison term attached. Perjury, to my knowledge, is a felony everywhere. I know of no state, or other jurisdiction, where perjury is a misdemeanor. Making false statements on a resume could easily amount to criminal fraud; if the employer actually was induced to hire, and did hire the applicant; and paid out $$$ based on the fraud; which could be charged as a felony.

    1. vlade

      “The 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.”

      It’s not about CV, it’s about the formal documents required under law, which are legal forms and have (I believe, definitely Form 700) explicit language on them saying it’s perjury to provide wrong information.

    2. Yves Smith Post author

      Better trolls, please.

      The headline of this post made clear it about misrepresentations on his employment application, which we embedded. I suggest you bother looking at it.

      It is filed under penalty of perjury. It says so clearly on the first page.

      If you had done the minimum level of looking before commenting, you would also have sees that there is a field for supervisor that is consistently blacked out. That is why we had to speculate as to whether Brazier’s name might be there.

      By contrast, on Asubonten’s resume, which we have posted several times, the only redaction is right under his name, presumably of his address, phone number, and/or e-mail address. Nowhere on that document does he list any supervisors.

      And in fact, perjury on a Form 700, despite it also being a document filed under penalty of perjury, does not appear to be a felony. Violations of the Political Reform Act, which is the legislation which requires the filing of the Form 700, allows for only misdemeanors as its most serious criminal charge. Similarly, a litigator who tries cases all over the US advised me to check the California criminal code to make sure perjury is (always) a felony in California, since this is not the case in every state.

  3. vlade

    I’m happy to see this is getting somewhere, even though CALPERS is dragging their feet. As their say where my wife’s from – more and bigger drops!

    BTW, you have it filed under Guest posts – I assume that’s wrong?

  4. The Rev Kev

    That telephone number for Dennis Brazier is listed as +27 83 634 0758 Australia. Umm, no. The telephone prefix number for Oz is +61, not +27. If you look up the List of country calling codes at you will see that the number +27 resolves to South Africa and not Australia.
    The only possible connection with Australia is that Palabora at the time Asubonten was there was part of the Rio Tinto Group which is an Australian-British multinational. Also, a page at indicates Brazier’s residency as South Africa by the way.
    I know that the following is a bit of a stretch but that redacted resume. Is that a pdf file originally? If so and if they have been sloppy, the text underneath those black squares can be recovered.

  5. Clive

    Unbelievably, well, all-too-believably because this is CalPERS, their Audit Committee assigned what I would infer to be the lowest possible Risk Probability rating to the risk of Talent Management:

    This risk profile acknowledges Talent Management as CalPERS’ cornerstone to success, as well as the effect of increasing retirements at senior level positions. There remains a gap in CalPERS practices to capture institutional knowledge and fill hard-to-fill positions while adapting to a changing workforce.

    But as Yves points out, CalPERS has already blundered with this appointment. And given CalPERS’ long and sordid history of scandals, governance and ethical failings this should have been front and centre of CalPERS’ HR leadership that it might, putting it mildly, have issues with attracting and retaining the right calibre of senior managers.

    But no. What we have on the risk oversight report is wishy-washy meaningless platitudes, corporate babble-speak and warm words (again from Enterprise Risk Profile I’ve linked to above):

    Effective Mitigations and Controls In Place:

    2.1 Knowledge transfer for multi-year consultant contracts
    2.2 CalPERS Informal Mentoring Program
    2.3 Executive Succession

    Planning Program Future Mitigation: • CalPERS is expanding the Succession Planning Program to Staff Service Manager IIIs and equivalents to strengthen the talent pool for the Division Chief and Investment Director level positions (December 2016)

    This is just laughable. I write this kind of nonsense day in, day out. I churn it out by the yard in situations where there is an acknowledged problem, and someone merely wants words on a page — any old words will do so long as they are in the standard corporate guff vocabulary and phrasing — so that the organisation can make out like it’s doing something. No-one who reads this Risk Profile for Talent Management in a large organisation would walk away thinking anything other than it’s the lowest of the low priorities and not to be given any attention at all.

    It’s probably difficult to appreciate for those not in the echelon of C-level careers just how closely and diligently those who are genuinely qualified (or at least experienced enough with proven track records) manage their resumes and career paths. You and are I are usually merely grateful to have a job. But with so much invested — and the potential returns so high, in the millions of dollars annually — top-level organisation Politburo members will not tolerate a career misstep. Working at a joint as incompetent as CalPERS is a career accident waiting to happen. It’s difficult to see how CalPERS can attract top-flight applicants with their dubious reputation.

    And get a load of this bit:

    Risk Driver #3: Restrictive state hiring practices

    Effective Mitigations and Controls In Place:

    3.1 Hiring manager education and support, including a Hiring Manager Toolkit
    3.2 Lean Hiring Process pilot program to streamline the hiring process and recruitment activities
    3.3 Participation in the state-wide Civil Service Improvement effort to modernize state recruitment and hiring practices
    3.4 A list of “Hard to Recruit” classifications established to develop targeted recruitment strategies and activities
    3.5 Utilization of search firms to source key senior leadership positions
    3.6 Participation in targeted career fairs and advertising in non-traditional mediums to attract prospective employees
    3.7 Participation in pre-recruitment activities to ensure candidates are willing to accept the compensation packages offered
    3.8 Conduct a salary survey of comparable executive and investment management positions every two years (2013)

    Now this speaks volumes for CalPERS’ attitude. State laws and regulations are characterised as “restrictive”. These “restrictions” presumably things that CalPERS thinks it should be able to get around rather than live within? Laws and regulations are created for a purpose — to protect local and national government and the people who live in a country from wrongdoing and bad behaviour or unlawful conduct. They are not some annoying niggle to be worked around. And, surprise, surprise, there’s nothing whatsoever about vetting candidates to prevent fraudulent or inappropriate applications.

    CalPERS Audit Committee and Enterprise Strategy & Performance Division (which is responsible for the HR function in CalPERS) should explain why their lax procedures, poor risk evaluation and consequent under-assessment — and under-resourcing — of just what issues CalPERS faces in recruitment have led them to this parlous state of affairs.

    1. EoH

      Great comment.

      Fish and organizations rot from the head. It seems that CalPERS hiring and retention problem is one of many. My guess is that it has more to do with mismanagement and corporate culture than the pay scale or so-called restrictive state practices. As you point out, CalPERS seems not to make fixing this a priority.

      Its rush to outsource a core competence – PE investments – with virtually no oversight or standards, and to hire a pliable rather than superb CFO, suggest it has decided its problems are not fixable. They may be welcome, in fact, for those who have adopted the neoliberal attitude that government should not perform any function the private sector is willing to perform, regardless of price or outcome.

  6. E. Nigma

    Great to see sunlight in action (and I’m especially gratified as CalPERS has a 7 figure obligation to me).

    Perhaps I’m attaching more to “patron” than intended, but I’d be surprised if some cinematic hidden connection were to emerge between the College Student-CEO and the Mining Money Man. It just seems to me like a case of “A people hire A people; B people hire C people.”

    1. vlade

      If your obligation is pension related, I’d say you’d write to anyone and everyone Yves ever suggested on these pages..

  7. EoH

    Most hiring and firing decisions are cloaked in secrecy. Why would CalPERS broadcast a review regarding a controversial hire that it has gone out of its way to defend?

    It could be CalPERS bending to critical press coverage, something it has shown no inclination to do before. It could be to avoid more direct intervention by state government. It could be to telegraph a predetermined outcome, while hiding it behind a nominal process.

    CalPERS decision-making seems intentionally flawed. Any improvement would be welcome. But it seems unlikely to come from this board and CEO.

  8. Tom Stone

    The Bee article is written to show that it is doing its job while causing the least possible distress to the power structure in Sacramento.

    The Bee does not rock the boat.

    1. EoH

      The Bee article’s last paragraph also gave CalPERS a convenient out. It labelled its search for a CFO “difficult”, after its first choice had to withdraw owing to a predictable conflict of interest the board should have been aware of from the get go. I guess they only play slow-pitch in Sacramento.

      The more I look at this, the more it seems CalPERS had no process at all beyond the chair and CEO asking around about who they might hire for a job that had something to do with numbers.

  9. EoH

    The hiring process for such a senior position is often tightly honed. Candidates are being vetted to join the elect and to perform a valuable public service. Expectations of compatibility and superb performance are high. It is an opportunity for the chair and CEO to network with key patrons about who should be on their top team.

    Many top outside advisers – employment lawyers, HR specialists, senior executive search firms – would have jumped at the chance to create, revise, audit or perform that process for such a high-profile, well-endowed client.

    Yet, CalPERS rejected using that advice. It relied on a seat-of-the-pants guess. It is unlikely to have been to save money; more is wasted on a single flawed investment. It seems unlikely to have been to save time. It was not to hire a better candidate. Is this the Peter Principle squared or is something less wholesome at work?

    With such a flawed process at the top, why should California’s government and taxpayers have confidence that CalPER’s routine hiring and management practices are any better, let alone those it uses to make complex and novel investments?

  10. flora

    Board President Priya Mathur said Frost is “handling this matter with all due diligence and sensitivity.”

    Thank goodness I wasn’t taking a sip of coffee when I read that.

    Asubonten has played CalPERS and Marcie Frost for fools.

    Yes, it certainly looks this way.

    Thanks for your continued reporting on CalPERS.

    1. Synoia

      Asubonten has played CalPERS and Marcie Frost for fools.

      Probably not.

      On one had the CALPERS executive appear stupid.

      On the other, thieves.

      One has to ask what could a CFO (senior accountant) do to get terminated, but not prosecuted? It cannot be direct theft or embezzlement, it would have to be external to the business cash flow. A CFO approves vendors or suppliers, and that can lead to a payment external to the institutions books, and hard to prove.

      I’d be looking very carefully at purchasing and vendor kickbacks. A few percent of the cash flow of the purchasing of a large mine, and both the South African and Zambian mines were very large, is a lot of money.

      When I lived in West Africa, a “dash,” bribe or kickback, was very common. In South Africa less so, but it was never zero.

      It’s not zero in the US either. Generals retiring and then working for defense contractors has always appeared to me as very suspect, as have politicians out of office becoming “lobbyists” bearing campaign “contributions.”

      1. Yves Smith Post author

        I have been reluctant to speculate, but if you read the South African labor court ruling carefully, it’s not hard to infer that Rio Tinto chose not to paper up Asubonten’s file when they terminated him. To the great annoyance of the judge, Rio Tinto was not able to produce any backup for the poor performance scores Asubtonten got in 2008 and 2009, even performance reviews, nor did Asubonten have any copies either. Further, the judge pointed out Asubonten never asked why he was being terminated, which suggests he didn’t need to ask. Finally, the Palabora HR exec said the personnel reviews at Rio Tinto can’t be altered once entered….as in they are immune to tampering after the fact.

        See here for details:

        1. Synoia

          Common Termination agreement. If a company excoriates a person after they “separate” the company can become liable.

          What’s in the record is carefully managed. What the circumstances were in detail evaporate.

          Asubonten’s got brass b* 99 for disputing a termination for clause.

          1. Yves Smith Post author

            It wasn’t termination for cause. We’ve made clear it wasn’t and you make the site look bad and also are being unfair fair to Asubonten in erroneously saying that. You can see that clearly if you read the labour court decision, which we posted here:

            He was an employee of Rio Tinto. He was seconded under a three and one year contract to Palabora. Rio Tinto reimbursed Palabora for his employment costs. It’s also clear that Rio Tinto handled his severance. The contract provided that if the employee was terminated other than for cause (in Asubonten’s case, they let his contract expire), they would get standard benefits like having their families + a certain amount of excess baggage flown home or to their next posting business class for up to three months after termination. They also paid for his kids’ tuition and let him stay in the company house for six months after his contract expired. The court ruling is silent on that point, but you’d have to assume that this benefit at most normally extended to when the flight back benefit expired. Asubonten had gotten Rio Tinto to agree to extend his flight back benefit to six months, arguing that he was looking for a job and if he got one, they’d be able to save that cost.

            What WAS cheeky is that he signed a separation agreement not long after his contract expired, and in that, he gave up the right to sue. Yet he sued. In the US, a suit normally would have been tosses based on that. I don’t understand how it was allowed to proceed in South Africa, save that their labour courts may be more courts of equity (as in not as contractually driven) than US courts are.

            Note that Rio Tinto kept Asubonten on at Palabora for more than a year after they first told him they were not going to be renewing his contract. If he’d done something really dodgy, he presumably would have been turfed out pronto. But the failure to document what exactly the performance issues were and the fact that Rio Tinto had no records, and Asubonten professed to have none either is peculiar, and you can infer that Rio Tinto squirmed when probed (the record also shows the head of HR was able to recite a long list, which never made it into the record, so it isn’t as if there were no beefs….).

            Shorter: there’s no basis for thinking that Asubonten leaving Palabora was anything more than him stepping into a role that was somehow over his head and not adapting to it. I have read the situation as Asubonten having gotten way way off the normal big corporate track after he left Palabora and trying too hard to fit his later square peg of a work history into the round hole of the CalPERS CFO job requirements.

    1. Yves Smith Post author

      Yes, I didn’t bother mentioning that, which I probably should having in saying the “Australia” part was odd (its country code is 61, so the phone number was not in Oz, and I checked the country code to see if it was in South Africa, since that’s where Brazier says he is now). Will amend.

  11. Brian

    I represent someone collecting a pension from CalPers, and I am deeply concerned. I have friends that are also dependent on pensions from Calstrs as well. After reading NC, the SacBee and the LAT over the years, it is hard to envision a scenario that isn’t, or at best There doesn’t seem to be any aspect of their governance of the public trust that they haven’t usurped or ignored. It is with wonder that law enforcement organizations are not currently acting to investigate these folks, so I hope that this is the case. But then again, can their actions become public without a panic? How can all of the investigative work by you all be ignored?
    If; Kentucky, Illinois, Dallas/FW pensions are failing hard, (I can’t make a complete list from memory) Is this a symptom of our government that must be swept under the rug until it explodes? Is California just as deep in the hole as these other states, but on a much larger scale?

  12. UserFriendly

    This could be a big old nothingburger but I figure Since I already stumbled down the rabbit hole …. In one of the other articles you had mentioned RSA Capital to be somewhat of a phantom. As in there are a couple companies that go by that and none with ties; but I tried searching south africa’s version of google ( for it and got a bunch of hits that didn’t really seem pertinent, and still might not be. I remembered reading something about Australia when I was looking through that list though. This site has a corporate history of RSA security which made a ton of money on encryption and has this as part of the description:

    Principal Subsidiaries: RSA Australia; RSA Japan, Xcert International, Inc.
    Principal Divisions: RSA Capital.
    Principal Competitors: Check Point Software Technologies Ltd.; Network Associates, Inc.; Secure Computing Corporation.

    Which is probably a big nothing, but who knows.
    The only other thing interesting I noticed was that there is an “Investment Advisor Public Disclosure Database” run buy the US gov which pops up RSA capital as an AKA for ROCKYSTREAM ADVISOR, LLC. Which is probably also a big nothing, but ya never know.

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