Former CalPERS Board Designee Calls for Board to Terminate CEO Marcie Frost for Resume Fabrications and Ongoing Lies

A key insider, and one of the very few people who has participated in the process of the CalPERS board selecting CEOs, has spoken out against the Board’s backing of Frost in the face of her lies in the most blistering terms.

Terry McGuire was one of then State Controller’s designees. In his letter to all members of the board yesterday, McGuire makes clear that only Frost herself could be the source of the false story that she was working on a dual degree at The Evergreen State College, or frankly any degree whatsoever. He also says that she could have tidied up this whopper either by pursuing a degree or clearing up the record, but she did neither. McGuire also indicates that he has spoken to some board members privately. One can infer that he wrote this letter out of a recognition that they were not prepared to to the right thing and oust Frost.

Please circulate this letter widely. If I get a better image, I will replace the one below, which is still readable.

CEO Frost.pdfsigned (3)
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  1. Anon

    We are about to see the level of integrity in the CalPERS Board.

    Thank you, Mr. McGuire (and NC).

    Exposing the rot in American culture is essential to the reformation of the nation.

  2. audrey jr

    I look forward to forwarding this to my State Assembly Rep. Mainschein.
    Thanks again, Yves, for your consistent and persistent coverage of this matter.
    And, yes, everything is getting to be like CALPERS. Ugh.

    1. Yves Smith Post author

      Thanks so much, but please be sure to cc Priya Mathur ( on behalf of the CalPERS Board and Marcie Frost (

      The reason is for the board to see that beneficiaries and voters back McGuire’s call for Frost to resign.

      If you have the time and energy, please also send a copy to:

      Governor Jerry Brown, who has appointees on the board (e-mail form; fax 916-558-3160)

      The two chairs of the pension committees, since CalPERS is afraid of the legislature, Dr Richard Pan (; fax 916- 651-4906 or 916-914-2179 ) and Freddie Rodriguez in the Assembly (; fax 909-902-9761).

      The two ex officio members of the board, the State Controller, Betty Yee ( and the State Treasurer, John Chiang ( Chiang is termed out, so he might do the right thing.

      Thanks again!

          1. Thomas J. Minnehan

            Thanks much Yves for your massive amount of work on this!

            I never understood how this woman was hired, what was going on with the board, was it anything nefarious? Someone(s) seemed to be intent on getting her hired for some reasons despite her lack of qualifications.

            Thanks again.

      1. vlade

        I’d also suggest writing to your local (and not so local) newspaper, as to why something like this, which is clearly of interest not just ot CalPERS beneficiaries but all CA taxpayers (due to them picking the tab for any shortfalls), doesn’t get a level of scrutity it deserves.

  3. flora

    Thanks for this post. I agree that, based on the reporting at NC and the LATimes (both excellent sources of accurate information, especially NC which has focused laser-like on the issue) that Frost should be terminated.

    That would be the first step. The second step, again in my opinion, would be to offer a competitive compensation package comparative to the private sector for the new hire, commensurate with the scope of the job, taking into account CalPERS financial size and status as a pension financial bellwether. One thing I’ve gotten from NC’s reporting (and I hope I’m accurate here, and please correct if I’m wrong ) is that the job responsibilities and financial scope of the CalPERS CEO position is salaried at too low a rate to attract really good candidates. And so only second or third best, and even unqualifieds apply for the position. The best go elsewhere. And CalPERS needs the best.

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

    1. JTMcPhee

      Since the CEO position seems largely a rubber-stamp for lesser-paid staff members, and since the many thieves and liars at the CEO level in “comparative” private sector positions do not begin to “earn” their mostly self-awarded “pay packages,” I’d say your suggestion that offering a big “comparative” pay package to a replacement for Frost as likely to attract really good candidates is nonsense. CalPERS ‘needs the best,” from among the pack of skulch that fill out the CEO positions in large private institutions? A yuuge salary is just going to buy more of the same stuff that Yves and NC have been sir diligently documenting.

      Clean out the whole lot of them, and tell the Union Quislings to go pound sand. I bet there are ordinary mopes who can do a better job of putting the billions that employees and the public have “entrusted” to these thieves and looters, with just a little education (maybe by Yves and Jerri-Lynn?) on how to manage huge amounts of money without PE and other vampire squids skimming the big vig off the top, front, back, bottom and sides of it. Might even become a model for other “investment modalities.”

      Are Inspectors General subject to regulatory capture and the seductions of corruption? How to find an IG and staff that won’t fold like a cheap suit…

      1. Yves Smith Post author

        CalPERS has had good CEOs in the past, and blew it with a #2 that would have done a fine job and instead wound up with Buenrostro, the former CEO who is now in Federal prison. So I would not be as dismissive as you are. But how to clean up the place is an open question. The Governor and Legislature need to wake up and smell the coffee, and the beneficiaries need to stop voting for union hacks in the elected positions.

        You are right that IGs can be weak, but that’s the fastest path for shaking up CalPERS. Even a threat of legislation of that sort would be a huge wake up call for the execs and the board.

        1. Oregoncharles

          They actually named a CEO with no college credits and little to no relevant experience. The mind boggles. I hope whatever it is isn’t contagious – Oregon’s PERS is in enough trouble.

          In all seriousness, it’s obvious from the failures you’ve found, even without being able to examine the books, that something fundamental is wrong. The staff capturing the board is one possibility. There is always a potential problem when full-time professionals are “supervised” by part-time amateurs, but that is how democracy generally works.

          Any thoughts on the underlying problem? I realize that’s necessarily speculative.

  4. Anon

    This partly off-topic, but important: Taibbi has an excellent article on the 10 Year Anniversary of the Great Bank Collapse at Rolling Stone magazine:

  5. The Rev Kev

    The Board may try to hide from all these facts but the trouble is that as each NC post about CalPERS gets posted, it is up there for the whole net to see. In the Topics listing, I see that the number of CalPERS posts has reached 90 which is a remarkable achievement in itself. Any reporter will find it a rich stockpile of tales of skullduggery and criminality and Mos Eisley spaceport has nothing on CalPERS. You just keep waiting for that final straw that will have a cascade effect and you just know that it is coming. Time is definitely not on CalPERS side.

    1. flora

      Rev. I believe based on your past posts that you are an Aussie. (is this right? please correct me if I’m wrong.) So when your write…:

      I see that the number of CalPERS posts has reached 90 which is a remarkable achievement in itself.

      …I think of Ida Tarbell. The early 20th C. journalist Ida Tarbell (not a name much known outside the US) would, I think, be disinterestedly gratified (not quite the right word) that the tradition of citizens working in the public interest is still carried on. Democracy, etc. my 2¢.

      1. John Zelnicker

        September 13, 2018 at 9:30 pm
        Ida Tarbell was the muckraking journalist who wrote an extensively well-documented take down of Standard Oil Company and John D. Rockefeller, exposing their unfair, monopolistic practices. She was instrumental in the dismantling of the company under the Sherman Anti-Trust Act in 1911. (I wrote a paper on Rockefeller in high school.)

        We could use more investigative journalists like her nowadays.

  6. David in Santa Cruz

    This is just another outstanding scoop on a compelling story that the monopoly-owned Main Stream Media haven’t deigned even to touch. Every acting journalist with a Pulitzer should have it revoked.

    However, the real problem isn’t even being addressed by Mr. McGuire’s scathing letter: the 13-term Board President (currently replaced by his designated sock-puppet) was as thick as thieves with the indicted former CEO and former board member “Placement Agent” and their Lake Tahoe bacchanals. He caused the Board hire his own personal Michael Cohen as General Counsel for the sole purpose of engaging in a massive cover-up. This GC has not the slightest experience — or even idea — of how to run a pension fund, a disability fund, or even the simplest financial contracting.

    Until those two are given a swift kick out the door (along with the current sock-puppet board president), this Decameron of Incompetence will continue ad nauseum until John Arnold and the Koch Brothers step-in to rape the beneficiaries into penury.

    Follow the money.

  7. Annonymous

    As a CA state employee in management and finance, I do not understand the support being given to a person who has been blatantly misleading about her qualifications. This person is now, somehow, in charge of a major financial institution? How did this happen? Finance is about confidence and trust and … audits and verification for good reasons.

    1. ThisIsNuts

      I work for a local government in Finance and completely agree. This would be unacceptable and a scandal in our City.

  8. Active Listener

    What are good resources for finding benchmarks for evaluating state pension fund performance? As someone whose substantially underfunded pension has already been diminished, with more cuts constantly being debated, I notice that my state pension fund’s return for FY 2018 was only 7.3% (and some other pension funds in my state were a bit lower), which compares unfavorably to other state funds I’ve seen figures on. How can I tell if too much is being paid out in fees (about $100 million for the FY, with a $1.6 billion net increase for all funds), or if the investment strategies are just random like CALPERS, or some other mismanagement is going on?

    1. Yves Smith Post author

      I take it you have not observed many CEO departures. The board is 100% behind them until it isn’t.

      I cannot recall a single case of a documented case where a CEO who lied during the hiring process about their education survived. There is already a revolt underfoot among beneficiaries, virtually all of whom had to get their credentials the honest way rather than lie about them, and in particular black state workers in and outside CalPERS, who as one contact put it, “are ready to burn down the building.”

  9. Sacramento Sal

    I am so disgusted by these Calpers clowns and the Board that is ultimately the ring master.

    Let’s all follow the lead of Mr. McGuire and take the time to write letters. We just may be able to shut down this circus.

    Priya Mathur
    President, CalPERS
    Lincoln Plaza North
    400 Q Street
    Sacramento, CA 95811
    Copies to: Board Members
    Marcie Frost

    Betty Yee
    State Controller
    300 Capitol Mall, Suite 1850
    Sacramento, California 95814
    Phone (916) 445-2636

    John Chiang
    State Treasurer
    915 Capitol Mall, Suite 110
    Sacramento, CA 95814
    (916) 653-2995

    Governor Edmund G. Brown
    State Capitol, Suite 1173
    Sacramento, CA 95814
    (916) 445-2841

    Gavin Newsom
    Lieutenant Governor
    State Capitol, Suite 1114
    Sacramento, CA 95814
    (916) 445-8994

    Assembly Member Freddie Rodriguez
    Chair of the Public Employees, Retirement, and Social Security Committee
    Capitol Office, Room 2188
    P.O. Box 942849
    Sacramento, CA 94249-0052
    (916) 319-2052

    Assembly Member Travis Allen
    Vice Chair of the Public Employees, Retirement, and Social Security Committee
    Capitol Office, Room 4208
    P.O. Box 942849
    Sacramento, CA 94249-0072
    (916) 319-2072

    Senator Richard Pan
    Chair of the Senate Public Employment and Retirement Committee
    State Capitol, Room 5114
    Sacramento, CA 95814
    (916) 651-4006

    Senator Mike Morrell
    Vice Chair of the Senate Public Employment and Retirement Committee
    State Capitol, Room 3056
    Sacramento, CA 95814
    (916) 651-4023

    1. Retired

      This is pointless. They are all controlled by the unions as are the board members. They’re all on the same team. Need to vote in new leadership on the CalPERS board. Rob Feckner had NOBODY running against him for his new term. When he finishes his next term that will be 24 years on the board. NOBODY needs to be on the CalPERS board for more than 8-12 years. Time for term limits on the CalPERS board.

      1. Yves Smith Post author

        Not true. Letters from NC readers forced California to pass landmark private equity transparency legislation. And you miss union power is gonna fade fast thanks to the Supreme Court decision that makes mandatory union dues illegal.

    1. Yves Smith Post author

      I don’t think he can. He is still a CalPERS employee. He could conceivably make a public comment at the next round of board meetings, which start on Sept. 24.

  10. Grant T. Burner

    I think Rob Feckner’s decision to not run for Board President was due to him acknowledging that they screwed up in the hiring process of CEO Frost.

  11. Shirley Wofford

    Why is it that there are no rebuttal comments on Naked Capitalism? Could it be because the blog owner does not publish comments that do not agree with her? As for the hiring of Marcie Frost–if you had been watching MS Frost in her many presentations and reporting, you would not have to wonder why she was hired. The key word is, “Experience”. MS Frost has that and much more. You complainers might as well go on to another blog–Marcie Frost is qualified, and she is here to stay!

    1. Yves Smith Post author

      You happen to be the first person in the entire history of our writing on CalPERS (90 posts) who has defended Frost or in fact any member of CalPERS management. We have not removed or not approved a single comment on this topic. So your remark is an smear demonstrating personal prejudice.

      Moreover, if you look at Adam Ashton of the Sacramento Bee’s latest article about Marcie Frost, and Ashton spins his article to favor the CalPERS point of view, the comments are overwhelmingly hostile to Frost. So even with Frost getting the kid gloves treatment at the Sacramento Bee, its readers are not buying it. Yes you bizarrely assert we should have different results here, with our well-substantiated, critical coverage.

      I worked for Goldman Sachs, then went to McKinsey advising large financial institutions, started up ran a mergers and acquisitions department for the world’s second largest bank, and had my own consulting firm advising large financial institutions for two decades after that, most of them much larger than CalPERS. In other words, I have worked closely with many highly competent top executives in a range of financial services activities and have a much better basis than you do for assessing Frost’s performance. I have not only seen Frost speak at CalPERS but have watched videos from her days at the Washington Department of Retirement Services, and more important, the actions taken by CalPERS on her watch. Frost is a poor executive. Her public comments are non-substantive and when she speaks about finance and investments, show she is of her depth. You apparently did not bother reading our two new posts that chronicle some of her considerable shortcomings.

      But more important, even if she were highly competent, which she is not, lying during the hiring process is utterly unacceptable for an executive, particularly the CEO. Worse, Frost regularly tells other demonstrable lies and allows staff to it to the board in open session. This is corrosive to the culture of any organization and particularly in a fiduciary.

      Similarly, due to this site’s focus on finance and economics, and among other things, our record of foreseeing and then closely chronicling the crisis, we have a sophisticated readership with a heavy representation of older readers who themselves have worked in financial institutions. They’ve seen the damage that lightweight, dishonest managers like Frost do and are correctly not impressed.

    2. Fiery Hunt


      Hi Marcie! (or her “assistant”…whoever you are, whatever…)

      Lying disqualified her BEFORE SHE EVEN STARTED.
      Gonna have to do better than that…

      1. shirley wofford

        I am not Marcie, and I am not her, “assistant”. I have never met her–never talked with her. I am an observer. If you can find a lie in that application, bring it on!

        1. Yves Smith Post author

          We documented Frost’s misrepresentations at length in these posts. I suggest you bother doing your homework. Uninformed bluster does not go down well here.

          CalPERS CEO Marcie Frost’s Misrepresentations Regarding Her Education and Work History During and After Her Hiring

          Cover-Up of CalPERS’ CEO Frost’s Misrepresentations of Her History: Document Destruction/Loss at CalPERS, Pressure on The Evergreen State College

          Why Marcie Frost’s Shoddy Resume Alone Was Reason Not to Hire Her at CalPERS

          In particular, note in the first link that we provide documentary evidence, which you can see yourself on a Washington state website, thatFrost’s history of lying during the hiring process goes back to her previous position in Washington, where she clearly committed perjury in filling out a gubernatorial questionnaire.

          The Financial Times has independently confirmed our reporting:

          Financial Times Publication Confirms Accuracy of Our Reporting on CalPERS CEO Marcie Frost’s Resume Misrepresentations; Board Refuses to Investigate and Instead Attacks Us

          And commenting here is a privilege, not a right, so I also suggest you read our site Policies at this link before commenting again. We moderate and blacklist readers based on their behavior, not the content of their argument (we have some readers who regularly oppose our point of view on certain topics, but they are welcome to comment as long as they obey house rules), but people who are losing arguments sometimes get abusive and/or argue in bad faith and therefore lose their right to comment here.

          1. Shirley Wofford

            The Board was impressed with her and hired her; the Board continues to be satisfied with her performance and has given its unanimous support. There is no documentation to be drawn from her application for this position that shows her telling lies about her previous education and experience. Those of us who watch her presentations by video are impressed with her and have nothing negative to say about her. It is obvious that she is that rare individual who has worked in that field for years and has the innate ability, above that of most, to absorb and retain the required knowledge. She has been quoted as saying that she intends to get a college degree, someday, but at the moment, the job she is doing now is her main focus. It’s good enough for me.

            1. flora

              John Chang has said the audit function of CalPERS is important to make sure the payouts to retirees are correct and are not drifting into the practice of pension spiking.

              The price tag came as Controller John Chiang issued a new audit of the California Public Employees’ Retirement System.

              The audit of 11 state and local government agencies found no illegal pension spiking but concluded that the country’s largest public retirement fund makes itself vulnerable to the practice by not aggressively reviewing its 3,100 member agencies’ payroll records.


              Yet Frost recommends reducing or eliminating the effect audit function at CalPERS. This would leave the pension fund blind and defenseless against unwarranted pension payouts at the expense of other less well-connected retirees and the CA public, who will be left on-the-hook for any future ‘fiddled’ pension payouts. It was Reagan who said, “Trust, but verify.” Nowhere is this more important than in finance. It is why the audit department is critical for CalPERS maintaining a sound financial base. my 2¢.

              I make no claims about Frost’s motive here, however, this cannot be considered good pension management, imo.

            2. Yves Smith Post author

              You clearly did not read the posts we linked to. Commenting without having read relevant material and engaging in broken record (repeating yourself without engaging arguments made that contradict your position) are a violations of our site Policies as bad faith argumentation.

              We told you clearly to read our rules and you didn’t. Normally you would be put in moderation over this. I am giving you one more chance to shape up. You need to read the posts linked to in my earlier comment, in full, and our Policies, before commenting again. Evidencing failure to do so will get you put in moderation. I’ve cut you more slack than I do most newbie commentors who break house rules despite having been warned.

              We provided documents that showed Frost took only two quarters of courses at Evergreen in 2010. Two sources at Evergreen, one being the Registrar, said she never enrolled as a degreed student (she was a mere “special student”) and thus could not claim to even be working on a bachelors degree. CalPERS has conceded this point, so that in light of the further facts below, makes it irrefutable that she lied before and after she was hired. The Financial Times, which unlike you, reviewed our documents, came to the same conclusion.

              She said in a Washington document filed under penalty of perjury as part of being hired to be head of a small agency that processed pensions that she had been taking courses at Evergreen since 2009 and presented that in 2013 as ongoing, which was false. At CalPERS, she told Heidrick & Struggles that she was enrolled (already false) in a dual masters/bachelors program that in fact does not exist. That lie was repeated on her press release and her CalPERS bio, which she approved.

              And her lie did matter to some members of the board. Henry Jones said before a retiree group that Frost was going to have her (presumably undergraduate) degree issued shortly after she joined CalPERS.

              Lying during the hiring process is ground for termination at any functioning organization. You cannot have a liar as CEO.

              Your comment about “rare individual” also reflects your lack of knowledge about pension plans and the financial services industry generally. Frost ran only a comparatively small operations unit in Washington that handles a fraction of the activities that CalPERS engages in. A CalPERS Chief Operating Investment Officer (the role former CEO Anne Stausboll held before becoming CEO) would be vastly more experienced and accomplished that Frost is. Managers of asset management units at major banks would similarly be far more skilled. Many Canadian public pension funds are extremely well run, to the degree that US pension funds regularly poach their executives. Ted Eliopoulos, who curiously didn’t throw his hat into the ring for the CEO post, would have been better than Frost. Sacramento insiders have told me that had senior personnel at other California agencies known that CalPERS was not requiring finance credentials for the CEO, they would have had other qualified applicants.

              How Frost presents is an unimportant part of her job. Many very accomplished CEOs are poor presenters, starting with Bill Gates. And on top of that, many people, including most critically, CalPERS employees who are writing to me at unprecedented levels, regard her as a lousy CEO and view her patter as mere bullshitting. A CEO who had little respect from her staff even before this scandal broke is performing poorly.

              The board’s track record on serving beneficiaries is poor. The board also stood up for former CEO Frank Buenrostro, who is now serving 4 1/2 years in Federal prison for taking bribes. The two current board members who were on the board then, Rob Feckner and Priya Mathur, defended him to the very end. So you’d rather side with a board that backs crooked CEOs than demand better ones, starting with ones that have integrity?

    3. EoH

      Your comment assumes facts that are in dispute. There is strong evidence that Ms. Frost lied about her experience and education. In most organizations, that would be cause for dismissal of a clerk, let alone a senior manager.

      Ms. Frost would appear to have charisma and force of will. Salesmanship, however useful, is inadequate, if not buttressed with substantive skills. Her job is not just to be persuasive and to make presentations, but to effectively run the largest state pension fund in America.

      Technical skills and the ability to manage those who have them are essential parts of her job. Ms. Frost’s attempt to lower the bar for her chief actuary demonstrates that she has neither. In fact, she seems willing to let important jobs be poorly done in order to insure that her senior managers are personally loyal to her. That priority would make her more suited to working in the current White House than to running CalPERS.

  12. Retired

    Yves, great job reporting on CalPERS. I’m sure you’ve thought of this but just in case…look at previous CalPERS CEO job postings and see if a college degree was required. All high level positions at CalPERS require a college degree but the CEO position didn’t? Remember the Joe Dear connection with Marcy. I wonder if they had her in mind from the beginning and omitted the degree requirement so they could hire her. The CalPERS members and employees deserve better than this. Many employees questioned this hire when it happened and thought the comment about pursuing a dual degree was total BS. Keep up the good work.

    1. Yves Smith Post author

      No, Marcie has no real connection to Evergreen. She even called it Evergreen State College in her bio, when it is called The Evergreen State College and faculty and students call it TESC. I even had a graduate chew me out for calling it Evergreen State College, as opposed to The Evergreen State College, in my first post.

      The connection is far more likely to be to board members via a Pacific pension conference that is a week every year and very social.

      1. Retired

        Lots of opportunities to meet board members at functions around the globe. Are you able to find the previous CEO job postings/requirements for CalPERS? Was the one Marcie was hired under different from the previous ones? If it is why?

  13. Shirley Wofford

    I worked in the public sector. Job classifications are changed all the time for various reasons. Who in the heck cares, if she is doing a good job–which she is, according to the Board and those who have watched her work.

    1. Yves Smith Post author

      You are engaging in broken record and have clearly not read our post documenting that Frost is doing a poor job.

      I told you repeatedly that these are violations of our written Policies. I told you to shape up or you would lose your comments privileges. We welcome informed dissent, but people repeating themselves, ignoring information presented, and other bad faith argumentation tactics are not allowed.

      You have failed to respond to any of the points about her performance that we have documented.

      She lied about a board position on private equity and had to reverses herself at the next board meeting. She implemented new voting procedures that violate the California constitutional requirement that voting shall be secret by having signatures on the ballot and using voting methods (electronic and phone voting) which are not only not secret but produce no paper trial. US experts in voting methods are universally opposed to voting by Internet because it is insecure and prone to tampering, yet CalPERS is recommending it over all other voting methods. Frost refused to stop the use of sequential passwords by board members and having them distributed by e-mai, which made it trivial to hack into supposedly confidential board records. There have been tons of leaks out of closed session but Frost has not intervened. The site was down for a full half-day which is unheard of in the entire history of CalPERS being on the Web. A health care-related mailer was so badly botched it had to be resent with an apology.

      Moreover, CalPERS staff is demoralized and widely views Frost as incompetent. They have a far better perspective on this than any constituency.

      I could go on and have plenty of additional detail in posts.

      The board has not been doing its job for years and supported a CEO who is now in Federal prison for taking bribes, so the board isn’t credible on this topic.

      But that is utterly irrelevant. Lying to get one’s job is unacceptable in a CEO or any senior executive. CalPERS dismissed former CFO Charles Asubonten for precisely the same misconduct, because it is a violation of CalPERS policies, particularly regarding integrity.

      So you are telling me a white woman should get preferential treatment compared to a black man? Seriously?

      She’s a dead woman walking. It’s just a matter of whether she goes sooner or later.

      You have no idea what you are talking about and yet you prattle on. No one here buys what you are selling.

  14. Anonymously Yours

    File a Public Records Act to establish the Evergreen connection between former CIO Joe Dear and Marcie Frost. CalPERS reeks of cronyism!!

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