Robo-Signing, CalPERS-Style: Travel Expense Claim Forms Regularly Had Approval Signature of Board President Rob Feckner Faked by Staffers; Deputy CEO Doug Hoffner Also Participated in Approval of Undated, Pre-Signed Expense Forms

As short seller David Einhorn has said, “No matter how bad you think it is, it’s worse.”

On Monday, we wrote about how CalPERS was putting its finger on the scale of the upcoming board election, CalPERS withheld the results of a Public Records Act request repeatedly to deny challenger Jason Perez proof that Board President Priya Mathur had overseen and participated in what appears to be an illegal practice, that of having board members pre-sign Travel Expense Claim forms in blank. The actual amounts would be copied in later. The Board President or as we have learned, Deputy Chief Executive Officer Doug Hoffner, would then approve the claim by signing it themselves.

This is such a clear cut abuse that when General Counsel Matt Jacobs learned about it in January 2018, his immediate reaction was that this was wrong and needed to stop. Curiously, however, Jacobs took no steps to end the practice, nor did he push for the Board to revise written policies that are illegal on their face.

But even though Board member Margaret Brown e-mailed Board President Priya Mathur telling her that the practice was improper, Mathur didn’t halt it until we publicized her misconduct months later. And Mathur and the Board still have not changed the policy that calls for board members to submit pre-signed Travel Expense Claim forms.

This picture is already ugly, but it is made worse by the participation of one of the most senior executives of CalPERS, Hoffner. This raises serious doubts about his commitment to fraud prevention and proper controls. It says he is all too willing to accommodate board members even when they are violating state regulations. This “see no evil” attitude is what led to CalPERS to fail to prevent former CEO Fred Buenrostro from taking private-equity-related bribes. He is now serving a four and one half year term in Federal prison.

The Latest Board Abuse: Fraudulent Signatures on Travel Expense Claim Forms

We have evidence of a second layer of abuse, that of fraudulent signatures for the party making the approval. One reader in comments on our earlier post noted that the signature for the recent Board President Rob Feckner didn’t look right. We obtained the image of a valid signature from his Oath of Office and compared it to the signatures in the Travel Expense Claim forms we reviewed.1 As our examples later in the post show, many of the signatures indeed don’t look right. And a reason to suspect the worst is that the Public Records Act response included e-mails that showed that the head of the Board Services Unit, Karen Perkins, had a signature stamp for Feckner that she used to obtain a cash expense advance….which she had backdated.

This practice is considered to be a fraudulent signature. And it is important to understand why this is a serious abuse. The state-wide Travel Expense Claim form, STD 262A, requires dated signatures of both the party making the claim and the party approving the expense as a certification. As the instructions to the form underscore:

Your signature certifies that expenses claimed were actually incurred in accordance with the provisions of the DPA rules and/or a memorandum of understanding…

Valid signatures are essential to preventing embezzlement and to holding individuals accountable. The fact that state officials, all of whom have sworn oaths of office to uphold California’s laws, but can’t be bothered to do so with not-terribly time consuming matters exemplifies the toxic culture that we’ve written about regularly, that CalPERS board members and staff think they are above the law.2

It is also a mystery why Feckner shirked this part of his duty as Board President. Feckner had full time release from his day job. He does not like to fly, so he travels less than other board members. He lives only about a 45 minute drive from Sacramento. It would not have been difficult for him to drive into Sacramento once a month, in addition to board meetings, to approve expenses and handle other administrative matters, or to have the Board Services Unit Fedex him the forms and have him Fedex them back. In fact, published reimbursement claims show that he is in Sacramento two or more times a month and usually for multiple days.

The Funny Looking Signatures and the Impermissible Signature Stamp

Here are some examples of signatures on Travel Expense Claim forms that look sufficiently different from true examples as to raise doubts as to their validity. The “Oath” version is from Feckner’s Oath of Office, the second is from the signature stamp used by Karen Perkins and perhaps other members of the Board Services Unit:

Now for those of you still wondering, “Stamp? What Stamp?” here is an example of how it was used and how we obtained an image of its imprint.

Feckner received request for a cash advance for Board member Theresa Taylor to pay a conference fee via e-mail on April 20 at 3:35 PM. This alone shows poor management by the Board and the Board Services Unit.

The conference fee expense had been approved at the Board Governance meeting the morning of April 19. The transcript shows that both Feckner and Taylor were present.

Magically on the same date two minutes later Karen Perkins sent an email to another member of the Board Services Unit, Cheree Swemdensly, with the approved cash advance. You can see Feckner directed Perkins to use a signature stamp rather than sign as required. Staff normally handles conference payments; this typically does not fall to Board members.

Even if, due to the proximity of the Board approval to the conference date, there was no other option than to use a cash advance to expedite payment of the conference fee, Feckner and Taylor could have easily signed the form in person right after the board meeting.

Yet Perkins also backdated the request to March 30. That makes the payment fraudulent in another way: not just by virtue of the backdating, but also by authorizing a cash payment prior to having received the required Board approval.

The staff in the Board Services Unit may argue that they were doing what the Board President directed. That answer is unacceptable.

If members of the Board Services Unit are unable to follow State rules and just say no, then the Board Services Unit should be disbanded or their duties distributed to other departments within CalPERS.

Below is a spreadsheet showing the extent of the abuses from a sample of Travel Expense Claims, both the use of the pre-signed form and the apparent fraudulent signatures by Feckner:

Nearly half of the forms in the sample “signed” by Feckner appear not to have been.3 In addition, the use of the pre-signed forms varied wildly among board members. Richard Costigan, an attorney, never used one and neither did state Controller Betty Yee.

CalPERS needs to launch a thorough, independent audit of all Board and executive staff Travel Expense Claims to identify who participated and determine the extent of the fraud.

This misconduct illustrates how little trust can be placed in the current CalPERS board. If they can’t even be bothered to handle their own expenses properly, something that millions of American workers get right every day, how can they possibly be deemed fit to oversee billions of retiree dollars? The time is overdue to turf them out.


1 Our Public Records Act request covered completed Travel Expense Claim forms from January 1, 2017 to May 8, 2018.

2 The hard part about filling out Form STD 262A is assembling the required documentation. Why signing the forms was deemed to be onerous is beyond me.

3 The Board Services Unit was more careful with the Board members that hold other State offices…but still not all that careful. None of them submitted pre-signed Travel Expense Claim forms. They also submitted fewer claims, presumably because a fair bit of the travel they did was on behalf of other agencies and hence not a CalPERS expense. Even so, for Richard Gillihan, one out of the three claims approved by Feckner has an invalid-looking signature. For Richard Costingan, it is two out of seven, and for Betty Yee, it is one out of two.

Print Friendly, PDF & Email


  1. vlade

    Salami method.

    You start with small, “innocent” things that “help people to deal with the bureaucracy”. Then it gets more and more accepted, until anything goes to “speed things up” – and any fraud can be easily hidden.

    The board members should set example to the rest (as should senior management), as that sets the tone for the whole organization. And, if things are too inconvenient, well, that’s what PAs are for (worst come worst, I’m sure a good PA can sign for someone even legally, not to mention be good at faking the signature) – and I’d expect the board to have some admin staff TBH, given CalPers size.

    1. Yves Smith Post author

      You are overlooking a central point in the post: it is simply not allowed under California law for another party to sign an Travel Expense Claim form. We explained long form in our initial post on this abuse why it was almost certainly a crime and it appears that needs to be repeated:

      That means the Board Services Unit, the Board President as their supervisor, and the board members pre-signing these forms are systematically producing false documents.

      This practice is a prescription for fraud. The board members who autograph these pieces of paper are knowingly allowing other individuals to present cobbled-together travel expense forms illegally, as bona fide originals. Under the California Government Code, this is considered to be providing a false account, a form of misappropriation of funds. That is a crime pursuant to Penal Code 424(a)(3).….

      The implication of the institutionalized practice of: 1) using pre-signed partial forms, 2) using them to fabricate documents that are falsely submitted as complete originals, and 3) using them as the basis for making of payment is that the current Board President, Priya Mathur, her predecessor, Rob Feckner, and members of the Board Services Unit have suborned board members to provide false certifications on an ongoing basis.

      In addition, both the pre-signing of the travel claim forms and the submission of the false certifications is criminal conduct. Per Title 12 OF CRIMES AGAINST THE REVENUE AND PROPERTY OF THIS STATE, Section 424:

      (a) Each officer of this state, or of any county, city, town, or district of this state, and every other person charged with the receipt, safekeeping, transfer, or disbursement of public moneys, who either:

      3. Knowingly keeps any false account, or makes any false entry or erasure in any account of or relating to the same; or,

      4. Fraudulently alters, falsifies, conceals, destroys, or obliterates any account;

      Section 424(a)3 is colloquially called the “misappropriation of public funds” statute. Merely providing a “false account,” as in false certifications or doctored records, is a crime in and of itself.

      In addition, Chapter 8 of the California Government Code makes conspiracy a crime, and defines it broadly in Section 182:

      (a) If two or more persons conspire:
      (1) To commit any crime.

      This means that not only have the “officers of the state” meaning Board Presidents Mathur and Feckner, along with any board members who pre-signed travel expense forms, apparently misappropriated public funds as defined under the law, but they and the members of the Board Services Unit who prepared and submitted the forms also look to have committed an additional felony, that of conspiracy.

      This form is the one used by all State employees and officials, from the Governor on down. No exceptions. This is not even remotely like having your PA sign a letter for you. The form specifically requires the person who incurred the expenses to certify personally that the expenses were validly incurred for state business. It is impossible for a third party to do that.

      And the Board Services Unit is already grotesquely overstaffed. It has 6 people for 13 board members, four of whom (the State Treasurer, the State Controller, the representative from State Personnel Board and the representative from CalHR) have day jobs elsewhere in the California government, with their own staffers there, and don’t ask the CalPERS Board Services Unit to do much. In the old days, before the Internet. the Board Services Unit had a very big role as a document shop, organizing, reproducing, and distributing the voluminous amount of Board materials to the Board members before each (then every month) meeting. Even then that took only two people. And they also booked travel back when that was much more time consuming since the staffers would have to call travel agents, find out the options, call the Board member, and then book the travel, and then get the tickets to the Board member (and that optimistically assumed only one go-round of communication).

      And it isn’t as if the members of the Board Services Unit are fielding calls for Board members the way executive secretaries do. The Board members are very rarely in their offices in Sacramento and then unpredictably. They similarly only rarely produce documents for them.

      1. skippy

        Wet ink attached to responsibility commensurate to level of authority aka taking responsibility which is relevant to pay level.

        BTW don’t ask me about my mothers forensic accountancy investigation into such activity wrt a T1 international concern in the mid 80s and the ensuing internal political machinations e.g. she was enabled by the CEO which at the end of the day was looking for leverage over in house dirt on his non camp wannabe usurpers.

        Best bit is to offset the whole balance sheet issue there was an in house cull… guess who was on the list.

        I did get a small bit of bay back… was at a posh L.A. restaurant with a girl and saw him with some flapper blond 20 years younger and whilst exiting nudged his toupee off his head with my elbow.

      2. vlade

        Ok, I lost track of it all. That said, this is even worse, as if there’s a legal requirement to certify personally, then it’s just WTF territory. You don’t skip legal requirements as a board memeber, full stop.

        1. rd

          “All animals are equal, but some animals are more equal than others.” – Napoleon Pig (1945)

          Doing one’s job can be just so time-consuming and exhausting.

  2. The Rev Kev

    Just to get a handle on Doug Hoffner and Rob Feckner who have been mentioned here, I found their CalPERS bios-

    What has been done seems pretty cut and dried. I got curious however about the penalties that would be applicable under Californian law if it was classified as forgery. I found that after the passing of Proposition 47 in California, under Penal Code section 470, forgery is a misdemeanor offense, unless the forged item exceeds $950. If the court finds you guilty of felony forgery, it can mean a sentence of 16 months, or 2 or 3 years in county jail. There is a page at that goes into some detail.

    Sharp work, by the way, on the commentator that spotted that Rob Feckner didn’t look right. I would be curious if any of those documents were in excess of this amount for a felony to have been committed. Even if the conviction is a misdemeanor, that may remove one from eligibility to partake in Boards involving finances – or so you would reckon. That Proposition 47 (2014) mentioned, by the way, turned forgery into a misdemeanor offense rather than a felony but that is due to expire in 2022 which makes it a bit more spicey over time.

  3. Conrad

    This is the sort of amateur fraud you’d expect to find in a two-bit strip mall auto parts store. Seeing it done by highly paid executives at a multi-billion dollar public institution is mind blowing. Does no one there have any sense of professional ethics or personal responsibility?

    1. RUKidding

      Apparently not.

      I’d say it was gobsmacking, but sadly it’s what I’ve come to expect from this crooked, badly run, poorly supervised agency.

      IOW, just another day ending in “y” for CalPers.

      Will there be any consequences? Not holding my breath.

  4. Clive

    CalPERS pay out cash expenses claims?

    I’m going to have to ask that again because it is so atrocious — CalPERS pay out cash expenses claims???

    No — and I repeat — no enterprises or organisations of any scale or sophistication ever routinely pay out on cash advances without very good reasons and then only in minor or de minimis claims. This U.K. government expenses policy is typical (see pg. 28) and every organisation I’ve ever come across, including US ones, has a similar approach. Parking fees, small lunch allowances, coffee, that sort of thing is as much as is allowed to be claimed reciept-less.

    It is not rocket science. If you incurred an expense, you, the person who caused that expense, are initially personally liable for it. There is no automatic right to reimbursement. Even if you decided to pay out the money, that is at your own risk if you didn’t get the cost detailed in a proper reciept. You get a receipt, you submit the claim with the receipt, then you get the reimbursement so long as your claims and reciepts are above board, justified and a reasonable amount for what you say you procured.

    CalPERS are actively encouraging fraud with this non-procedural procedure. It is simply intolerable by any measure or any customary standard of corporate governance.

    1. RUKidding

      Yes, yes, yes and yes.

      Actively encouraging and endorsing fraud… with MY money, no less.

      I’ve long said in response to Yves’ fine posts here about CalPers that this is criminal enterprise.

    2. Synoia

      That was my experience too.

      I had am experienced manager who said to me once, “I know you do not cheat on Expenses.” I was floored at the comment, and asked how her knew that I did not cheat.

      Her response was, “your expenses are simple.” I was traveling twice a week, and asked for more information. She said, your expenses are Taxi to the Airport, Tax to the Hotel, Ticket, Hotel, Meals, and more taxis. One expense report per trip.

      She continued, the complicated expenses came when people put receipts in their drawer, and file multiple trips with overlapping expenses.

      I never learned how to do the complex expense reports.

  5. HotFlash

    Excellent work, Yves, kudos to you and also to Margaret Brown and the sharp-eyed commenter.

    So, doesn’t the State of California have some agency that investigates and prosecutes crimes? (crickets)

  6. Tom Stone

    ttorney General Becerra is going to be ALL OVER THIS!
    Real soon.
    Trust me, I’m a Realtor.

  7. EoH

    Real, blue-ink, dated signatures by the party incurring the expense and the party approving the expense. Just routine.

    CalPERS intentionally ignored the law and overrode standard prudential conventions for handling expense approvals and money.

    Why would anyone feel confident that this management and board are minimally qualified to manage the accounting and finances of America’s largest pension fund?

  8. RUKidding

    Wow. Thanks, Yves. Will there be consequences leading to Perp Walks?? I surely hope so, but not holding my breath.

    I work for a CA govt agency where our benefits, including pension, are contracted with CalPers.

    Sacramento County is our fiscal agent, not the State, and we are not state or county employees. That said, when I file travel expenses – which get sent to Sacramento County for final review and approval – I have to make sure that I carefully dot every “i” and cross every “t,” and I have to provide loads of verifiable documentation (almost to the point of ridiculousness). This kind of sh*t would never fly if I tried to do it – and that’s a good thing.

    My blood is now boiling. If something doesn’t come of this… I just don’t know what will.

    Thanks, as always, for super duper investigative journalism and reporting, Yves. Thanks from every single citizen in the State of CA. Keep it up.

  9. David in Santa Cruz

    While the casual manner in which criminal fraud is condoned at CalPERS is breathtaking, I’m equally concerned that the practice shows how pliable each and every member of the Board has been to unquestioningly accept the direction of staff who they are supposedly overseeing as fiduciaries for the members and beneficiaries.

    These are people who are phoning it in, and who are used to simply doing as they’re told. The polar opposite of a fiduciary. This reporting might be dismissed as nit-picking, but it strikes at the very core of why every member of this board other than the two who recently refused to play, should be turfed-out — and an outside audit commissioned (although given the collapse of ethics and standards in accounting, that might be a fool’s errand).

  10. Lambert Strether

    > the head of the Board Services Unit, Karen Perkins, had a signature stamp for Feckner that she used to obtain a cash expense advance

    Holy moley, a signature rubber stamp? I wonder how many there are, and if they are used for other purposes than those described in this post.

    Zorro Sales (!) has a good deal on revolving rubber stamp racks:

    Maybe somebody with sharp eyes could wander through the Board Services Unit, and see how many stamp racks they spot. Ha ha, only serious…

    1. Ruby Furigana

      Business idea: RoboSigning as a Service (RSaaS). Packages range from the entry level Linda Green package all the way up to the top of line Priyamium offering.

  11. Sacramento Sal

    Are there no internal controls at CalPER? Does the Board and the staff believe they are exempt from following State rules?

    How can we trust the Board to manage the $350 billion pension fund when they flought basic accounting and reimbursement rules of the State?

    Where are the auditors?

Comments are closed.