Financial Times’ FundFire Unambiguously Confirms Our Reporting of Misrepresentations by CalPERS CEO Marcie Frost

Financial Times’ FundFire reporter Fola Akinnibi has written three stories this week that referred to misrepresentations made by CalPERS CEO Marcie Frost during and after her hiring by the giant pension fund. His latest report, CalPERS CEO Misstated Educational Background During Hiring Process (no online version) not only flatly calls out Frost’s falsehoods, but also debunks CalPERS’ lame defenses of her.

The very first paragraph calls Frost and CalPERS staffers out as liars:

Marcie Frost, CEO of the $360 billion California Public Employees’ Retirement System (CalPERS), made misrepresentations about her educational background during the hiring process, raising questions about the pension’s previous statements on the matter, according to documents obtained by FundFire.

Akinnibi had requested and we forwarded the Public Records Act request with Frost’s resumes, her employment application, and e-mails with her name in them sent around the time of her hiring.

Key sections:

Frost completed and signed a background check form during the final round of the 2016 hiring process that said she had been attending Evergreen State College since 2014, but had not yet earned a degree, according to the documents, which were first reported by the financial blog Naked Capitalism. However, that information was inaccurate as Frost only attended the college briefly in 2010 and took a few writing courses in a so-called “prior learning program.”

CalPERS public affairs chief Wayne Davis says that the misstatement on the form was an error on Frost’s part and that “it should’ve said 2010.”

Additionally, Frost told recruiting firm Heidrick & Struggles that she was enrolled in a dual bachelor’s and master’s degree program in public administration at the college. The recruiter then included that information on the first page of a candidate report it presented to the CalPERS board members tasked with the hiring decision. The resume was a “composite of information furnished by the candidate,” the documents say, but Davis says the language used on the recruiter’s report is not the language Frost would use to describe her experience.

Here is the language from the Heidrick & Struggles report:

Help me. Davis is seriously trying to tell us that “I wouldn’t have said it that way” is equivalent to “I didn’t say that”? Or perhaps more specifically, the fact that Frost may not literate enough to use the word “matriculated” is to be taken seriously as an excuse?1

Back to the Financial Times’ story:

Even so, the program does not exist at Evergreen, nor has it ever, according to the college, and Frost was not enrolled in 2016. Additionally, the misrepresentation made its way into the July 2016 press release announcing Frost’s hire and remained in her biography for years on CalPERS’ website until its recent removal…

Despite [CalPERS communications director Wayne Davis] taking responsibility for the language of the press release and biography, the documents show that Frost was the source of the misrepresentations.

CalPERS has been insulting the intelligence of journalists, its beneficiaries, and California taxpayers by claiming that Frost had nothing to do with the misrepresentations about her education made in the press release issued when her hiring was announced, and in her bio on the website. The latter was edited to remove any claims about her eduction shortly after former Chief Financial Officer Charles Asubonten was dismissed for misrepresentations on his resume and employment application during the hiring process:

Frost was also involved in the press release rollout process, coordinating with staff and outside stakeholders on the announcement of her hire, according to emails obtained by FundFire.

“At this point I’m planning a Friday morning release with the [governor’s] office and we can change that if needed,” one email from Frost to another party reads.

Note also that the press release stated that Frost was also available for press interviews. It is inconceivable that someone who was at ready to talk to the media would not have read and approved material about them.

No functioning organization would tolerate having someone who lied during the hiring process in an executive position, let alone as CEO. Former California official Tony Butka underscores this issue in a hard-hitting new story at LA CityWatch that raises additional questions about Frost’s hiring. From his closing:

Back in the 90s, I served as the Executive Officer for the Los Angeles County Civil Service Commission for about a decade. Based on those experiences I can tell you for a fact that Marcie Frost’s misrepresentations on her resume would have resulted in a quick letter of resignation or termination.

During that time, I learned a few things about acceptable conduct, and particularly about public employees. First, dishonesty seems to be a matter of character, be it stealing or fibbing. Whether it is an Eligibility Worker during the Northridge earthquake illegally putting in a claim for a hundred bucks or less, or a mid-level manager siphoning off public funds for personal use, you are either inherently dishonest or not. It’s part of who you are.

The second thing I learned is that the abuse of power by a public official is a corrosive betrayal of what constitutes a “public servant.” Whether displayed by a clerk, a public official, or a Board member, it straight up stinks. The tendency is again a matter of character, not training. It’s pure “I have the power, you don’t, too bad for you.”

Further, the higher the levels of dishonesty or abuse of power, the more people are impacted. Believe me, lower level employees know about the foibles of their bosses. If the higher ups are unethical power junkies, the morale of the troops is directly impacted for the worse. A key sign becomes the number of staff members who leave or transfer.

Unfortunately, the current Board President, Priya Mahur, believes in truly Trumpian levels of secrecy and hiding what should be publicly available documents from us, the beneficiaries. She also tried to cover up Charles Asubonten’s mess, presided over the $3.4 million settlement with Dow Jones over blatant copyright infringement, and put her finger on the scale of the recent CalPERS Board elections. What a Prez.

CalPERS board looks hopelessly corrupt by not having launched and independent investigation. If you are in California, I hope you will circulate this post widely, particularly to any CalPERS beneficiaries you know. The health of California pensions is too important to let this level of misrule continue.


1 If you think I am being unfair about Frost’s facility with the English language, have a look at the resume she prepared, which is embedded at the end of this post.

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  1. Brooklin Bridge

    The good part of a very bad deal, the satisfaction in Yves being so well backed up by independent media and where the author has real executive experience, but sadly against the backdrop of frightening levels of corruption and criminal negligence (utterly cynical disregard of public interest) in management of public pensions. You need a strong stomach for this stuff.

  2. RUKidding

    Keep up the good work, Yves, and thanks for the update.

    The fact that CalPers has, so far, done zip, zero, nada, nothing about Marcie Frost is beyond infuriating. What a corrupt organization. Will continue to send emails to the PTB, but not expecting much to happen. They simply don’t seem to care. What a travesty.

    Recently I got one my Fall 2018 PERspective glossy mailer. I didn’t pay attention to it right away, but recently I realized that the cover featured none other than Marcie Frost (!!) standing and smiling with Investment Director Clinton Stevenson. Marcie’s “article” is entitled “We are building a solid foundation to last decades.” Lotsa rah rah, we’re so great here at CalPers, where I am CEO under FALSE pretenses.


    1. RUKidding

      BTW, Yves, there is a CalPers Board election coming up. I need to research this blog to see if there’s been anything written about the two contenders for Board:

      Jason Perez – Police Assoc President
      Priya Mather – Incumbent

      I’m inclined to think that voting out the incumbent would be a good idea but need to research Perez.

      Any further info leading up to the election – ballots due Oct 1 – would be appreciated.


      1. UserFriendly

        Yves has decidedly not made an endorsement in that race because doing so would open her up to criticism of bias.

        1. RUKidding

          Can understand that.

          Wasn’t looking for endorsement. I’ll do some research on the candidates. That’s what I was trying to say. Just info.

          1. Pat

            For Mathur I would start with some articles here at NC. I found some real informative pieces by searching Mathur Brown in the NC search box. (Brown is a reference to Board member Margaret Brown).

    2. Yves Smith Post author

      Thanks so much for your letters. Please be sure to copy Frost and Board President Priya Mathur (on behalf of the full board). Or you can send the ones you set earlier as cc’s. Their e-mails:

      Regarding the upcoming election, please read Jason Perez’s ballot statement on Mathur:

  3. flora

    Great to see continued confirmation of your reporting. Now if only the LATimes and SacBee will pick this up and give it wider play in California. Here’s hoping.

    Thanks for your continued reporting on CalPERS, PE, and pensions.

  4. Anon

    Hmm. Could Marcie Frost be the twin sister to Elizabeth Holmes (Theranos)?

    I can understand greedy investors believing they’ll make millions from a new, simple blood testing technique (Fake). But, how does the CalPERS Board explain Marcie Frost? She’s LESS qualified than Mr. Asubonten.

    In the words of Joni Mitchell: CalPERS Board needs a new “bullshit antenna”.

  5. Synoia

    Jason Perez – Police Assoc President.

    I sincerely doubt he has any experienced detectives among his colleagues. /s

  6. JCC

    I know I’ve mentioned this before here, but after the last article on NC I again wrote the Governor of CA and again checked the “Reply Requested” box.

    That’s a total of three queries to the Governor’s Office, the first over a year ago and the last three weeks ago and still no reply.

    Before I moved to CA, eight years ago, I was always under the impression that this was a relatively honest state compared to NY State , my former home (I mean, how tough can it be to be less corrupt than Albany, NY?).

    Based on this statement by Ms. Frost:

    “At this point I’m planning a Friday morning release with the [governor’s] office and we can change that if needed,”

    and the complete lack of any reply from the Governor’s Office (not even the typical form letter) I guess I was mistaken.

    1. Yves Smith Post author

      I suggest writing the same letter to the governor and the heads of the pension committees in the Senate and the House. CalPERS is afraid of the legislature. And then cc Board President Priya Mathur (on behalf of the full board) and Marcie Frost.

      The Senate chair is Dr. Richard Pan, contact page here:

      The Assembly chair is Freddie Rodriguez:

      For the cc’s:

  7. Harry

    Poor Marcie. Imagine landing a ridiculously big job that means your set for life, despite not going to college only to have the gig snatched out of your hands by ome meddling kids.

    Sorry. I confused Scooby Do, with nakedcapitalism. My mistake.

  8. The Rev Kev

    I have wondered before why California seems to attract people like Asubonten and Frost to CalPERS and can only conclude that we are seeing Sutton’s law at work here. California has the fifth largest economy in the world and CalPERS overseas billions of dollars in consequence. You will always have this level of money attract any number of grifters but the truly dangerous people are the enablers that take these people in and protect them. Frost, as an example, should ever have made even the first cut and yet she has had the fast track to the top. Good thing for people like them that political climates never change and justice can be permanently deferred. It’s not like CalPERS executives have ever gone to prison or anything. What? Oh, they have? OK, nevermind.

    1. Bob C

      Maybe the real questions are why she had the fast track, and who found it to be beneficial
      for her to be on the fast track for the position!

  9. David in Santa Cruz

    Article XVI sec 17(c) of the Constitution of the State of California states that:

    The members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims.

    I’m having trouble understanding how any member the Board of Administration thinks that they are free to conduct themselves in the way they have without being sued into personal bankruptcy by the members and beneficiaries. Intentionally hiring an unqualified CEO to facilitate hiding investment losses and the unconscionable fees paid to the politically-connected is a clear violation of fiduciary duty for which they may not be indemnified by the fund.

    Follow the money.

  10. Quanka

    That Tony Butka article is great, especially the very last line: “In the copy (CC) to Priya Mathur, ask that she distribute your letter to the rest of the Board, since she has a habit of keeping these letters confidential.”

    Boom! And for the Californians out there do follow his advice.

  11. Sacramento Sal

    It looks like the board hired Marcie Frost to be the “face of the franchise” because they were tired of getting attacked by the press, investment and governance experts, retirees, and Joe Q taxpayer.

    Who could possibly attack this cute perky woman? After all she’s so believable, until her lies were exposed by Yves. Great work by NC.

    As for the election, I’ll take the cop with a BS detector any day over Mathur who defended the fired CFO and now the CEO.

  12. vlade

    Yves – excellent work, the cycle of you uncovering something and getting a reaction shortened a lot, which says a lot (all three items noted in the last part of the LA CityWatch are yours!).

    I suspect we’re moving not necessarily to the end-game (for that board would have to be cleaned up), but to at least a place where end-game is possible.

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