Confidence or Dead CEO Walking? CalPERS Staff Pressured to Wear Badges of Support

CalPERS is engaging in yet another one of its Big Lies,1 this time in calling what can at best be called an astroturf show of support for embattled CEO Marcie Frost genuine. As you’ll see from the image below, CalPERS employees are being exhorted to don burgundy ribbons to demonstrate that they back CEO Marcie Frost.

As to the claim that no one is under pressure to wear the ribbons, let me turn the mike over to the employee who told me about this boneheaded idea:

Now executives are making employees wear badges to show if they support Marcie or not!!! These are in every break room at CalPERS!!! They say participation isn’t mandatory but you know they’re making note of who is wearing them and who isn’t.

Readers, you tell me:

Do you believe that participation is voluntary?

Can you ever think of an instance of a CEO feeling it necessary to go to such bizarre lengths to pretend that she has the backing of the rank and file?

Now it is conceivable that one of Frost’s direct reports came up with this idea originally. But even this best case does not reflect well on Frost. First, she has to have known that others would participate whether or not they still had confidence in her out of fear of standing out and making themselves a target for retribution. And that fear would be well founded. Former senior individuals who worked for Frost in Washington for many years reported that she would scapegoat and publicly humiliate employees. Second, the apparent need for visible support suggests that Frost is so emotionally fragile that she can’t take the heat of the position she has put herself in via her history of fabrications and even perjury. Third, it should have occurred to Frost and her toadies erstwhile fans that this move would create resentment among those that were already upset at the lack of leadership shown by CalPERS’ board by its refusal to investigate Frost and clear her name. Their refusal to do so lends credence to the idea that the notion that Frost has made misrepresentations for years is true.

The closest thing I can think of is the famed Potemkin villages. Per Wikipedia:

The term comes from stories of a fake portable village built solely to impress Empress Catherine II by her former lover Grigory Potemkin during her journey to Crimea in 1787…..the original story was that Potemkin erected phony portable settlements along the banks of the Dnieper River in order to impress the Russian Empress; the structures would be disassembled after she passed, and re-assembled farther along her route to be viewed again as if another example.

But at least historians now believe that the stories about Potemikin villages were exaggerated, while we see the evidence of faked-up support below. And if you think this gimmick was organic, think again. Frost has orchestrated external astroturf support to try to combat fully deserved criticism for misrepresentations she made during the hiring process and after she joined CalPERS. From a September post:

CalPERS CEO Marcie Frost has been waging a concerted battle to keep her job after we documented multiple misrepresentations she made during and after she was hired at CalPERS, as well as misrepresentations made in her own handwriting on a 2013 form filed under penalty of perjury in the state of Washington. As Los Angeles Times reporter Mike Hiltzik stressed last week, even executives with long, celebrated careers have lost their jobs over resume lies.

In another sign of questionable leadership, Frost has been reactive when her own professional survival is at stake. As we’ll discuss below, Frost has been personally soliciting letters of support from organizations that are close to CalPERS. The fact that I am hearing about it at my considerable remove says people see this behavior as crass. In addition, a union leader issued a letter of support for Frost on behalf of other unions, when at least one was not consulted and not happy about that.

This childish effort is a sign that Frost is desperate and needs positive reinforcement from her immediate environment to maintain what looks to be a tenuous hold on authority. The fact that this push for employees to wear ribbon more than two months after the scandal broke, on the first day of the monthly two and a half day board meetings, also suggests that she or her key staffers suspect that Frost is still in a rocky position with the board. And the note pumping for the ribbon show is a diss to State Treasurer John Chiang, by pretending that his request for an independent investigation of Frost’s claims before and after she was hired didn’t exist.


1 A partial list of Big Lies:

Calling the new private equity scheme CalPERS Direct when it is not direct investing and CalPERS staff admitted today it would be a garden variety general partner, begging the question of why CalPERS was taking additional cost and risk as opposed to just setting up a separately managed account with an existing GP.

Having spokesman Wayne Davis claim he was responsible for Frost’s resume misrepresentations, which has been debunked by the Financial Times, the Los Angeles Times’ Mike Hitzik, and former board member George Diehr, among others.

CalPERS saying no one could get private equity carry fee information.

Frost defending then CFO Charles Asubonten as an “excellent candidate” even after we had documented extensive misrepresentations on his resume and Form 700. He was dismissed by CalPERS shortly after they finally felt pressured enough to investigate.

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  1. Wukchumni

    The brain trust involved in being custodians for a part of a trillion came up with burgundy xmas bows as a show of support for Marci, what festive grift wrapping!

  2. Anon

    Umm, why is the request unsigned? Do the “rest of the staff” know who “-m” is?

    I give Yves cudos for not embedding the original photo (and attendant metadata) in this Post. A screen shot of the original has no metadata attached. So it does not reveal any information about the origins of the original photo.

    1. Yves Smith Post author

      I got this tidbit from another CalPERS staffer after the post went up:

      The is being done by someone fairly new. Must be a Marcie hire. No one who has been there long would use Executive Director. That is a title never used at CalPERS.

      “Executive Director” was Frost’s title at Washington Retirement Systems. Her title at CalPERS is Chief Executive Officer, as her bio clearly shows.

        1. Yves Smith Post author

          That may have been how people in Washington referred to her with her approval. Even though her name is a diminutive, “Marci” is more familiar.

          Or they could be sloppy like her. Recall her resume was full of mistakes.

    2. fajensen

      There could, hypothetically, be an evil genius amongst the staff doing some very effective Trolling. He/She is working under the assumed secret identity of “Doctor Mabuse” …

      Someone at a former workplace once “recycled” the handouts for a “rightsizing” plan that some dum-dum left in the printer, by putting them back into the feeder bin with the blank sides up. The effect was 30 out of 110 people gone within 6 weeks, the good people too.

    3. hemeantwell

      The only way that people could avoid feeling threatened if they don’t don the burgundy would be if people think Frost’s days are numbered. Frost’s minions would fear retaliation when new leadership takes charge. In any event, a brilliant way to improve organizational atmosphere!

  3. David in Santa Cruz

    Potemkin Village? More like Terezienstadt.

    “You VILL look happy for ze Red Cross visit! SMILE! Or else…”

  4. The Rev Kev

    Bit early for an April Fool Day’s joke, isn’t it? Oh, it’s serious. OK then. They may say that wearing these ribbons is completely voluntary but you can be sure that this close to Christmas, that they are noting who wears these and are making a list to see who is naughty or nice. Probably too the will be checking it twice. CalPERS knows when you have been good or bad so they had better be good for goodness sake!

    Well at the very least you can say that they got the colour right. On a hunch, I did a bit of checking and found that the colour Burgundy is “symbolizing ambition, wealth, and power”. Yep, sounds about right to me. Got it in one. And I only had to use Google to confirm that one.

    CalPERS has about 2,880 employees and you have to wonder how many of them check out NC when a CalPERS article comes up. By the sounds of it, these articles would definitely be NSFW in that particular workplace though. Not if you don’t want a promotion that is. Gotta wonder too how many executives check out these articles too with, dare I say it, a sort of guilty pleasure?

    1. Kokuanani

      I would guess that CalPERS’ in-house internet blocks “Naked Capitalism” as obscene or disruptive. They probably have to wait ’til they get home.

      1. Yves Smith Post author

        The PR people and top execs have to look at it to know what we say to try to spin doctor in response. CalPERS is not very skilled in its IT functions, so not sure it could readily block some employees and not others (it can clearly be done, but it’s work and they are averse to that). But it is more likely that employees that did not have visiting NC as a legitimate part of their day job would not check it from work equipment so as not to risk being caught out.

  5. Jerry B

    Yves- This seems like the type of culture and behavior one would expect in relation to the chapters I sent you recently, i.e totalitarian management or management by ideology.

    Commentariat – I own a book called Narcissistic Process and Corporate Decay by Howard S. Schwartz. It is a short but excellent book about narcissism and organizational dysfunction. I emailed Yves some chapter excerpts a while back since much of the book’s topics seemed very relevant to the Marcie Frost saga at CalPERS.

    One chapter is titled “Totalitarian Management and Organizational Decay”. A short tease from the chapter: “This means that increasingly promotion criteria shift from achievement and compe­tence to ideology and politics”.

    Another chapter entitled “Organizational Disaster and Organizational Decay” and the tease: “Advancement of Incompetent Individuals on the Basis of Ideology”

    Another chapter: Regression in Organizational Culture has this paragraph

    “Management by information encourages participants to engage in hypothesis testing about aspects of their organizational existence: to query, to question, to ask, to explore, and, most of all, to learn. Management by ideology as a logic encourages a participant to accept hypothesis confirmation and affirmation: to accept, to believe, to commit, to expound accepted doctrine, and even to glorify, and never to question, except in private, sanctioned arenas and audiences”

    The management by ideology description sounds like “pressure to wear badges of support”.

    The book Narcissistic Process and Corporate Decay by Howard S. Schwartz is very short, 150 pages, and is available from Amazon on Kindle for $15. It is very good book on organizational dysfunction and has chapters on General Motors and the Space Shuttle Challenger disaster. Even though the book was written in the early 1990’s it continues to have relevance over the years and present day.

    Thanks for the post Yves.

    1. fajensen

      Thanks for the tip. I like reading and I will get a copy. It is, I suspect, a book highly relevant to my TBTF-project (which is, however, not Too Big To Abandon or TBTA once the stars are right. The alignment is coming :).

    2. Kokuanani

      Sounds like it would be useful for analyzig Trump’s management [sic] style as well. Is there a “fires everyone” chapter? Or, to state it without agency, “everyone is fired.”

    3. Chauncey Gardiner

      Know it’s not on point, but hard not to contrast this behavior with the tragic loss of life in the Paradise fire. Watched the news yesterday evening where a grieving young woman, a nurse who had saved a number of her patients but lost her father, was interviewed. Poignant.

  6. ambrit

    I can’t help but think that the promulgation of this ‘shadow edict’ came too close to Armistice Day to be happenstance. These ribbons look like the ‘Remembrance Day,’ also November 11, Poppies. A fitting tribute to a career that is dead but hasn’t been accepted as such yet. So, I say, wear the ribbons! It might not signify what the C-Suite denizens think it does.

    I also sincerely hope that ‘m’ doesn’t get awarded the “Order of the Golden Parachute” when she does go.

  7. George Phillies

    On the right side of the image is a stack of cards. The truncated word I can read says “volun”. What are those cards?

  8. flora

    Ribbons, eh? So Marcie is a “cause” now? (Or a dread disease – something to find a cure for?) Is this the Tinkerbell Effect at CalPERS?*

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


    1. Clive

      Do you think we should start a GoFundMe page?

      Or a support group?

      “Justice for CEOs”

      Every day, CEOs, like poor Marcie here, have to endure awful suffering. Trapped in corner offices, forced against their better judgements to perform degrading acts as corporate shills for policies and strategies they know are wrong. Often completely unsuited to tasks they should be doing. These sad creatures, promoted and dragged far away from their comfort zones and natural habitats, often subsisting on less than a $1000 a day, urgently need your help… please, if you can support us, call now on 1-800-FREE-MARCIE and give what you can. Today. For her sake. For our sake. For goodness sakes. Thank you.”

      1. vlade

        TBH, 1k a day for keeping Marcie (and her likes) away may be a cheap at the price. Although, I’d prefer for that money to be spent on keeping them somewhere safe, away from society, than giving it to them..

  9. vlade

    This was either put up as a very calculated, if stupid, effort, or by an extremely naive sycophant. Given it’s a new hire, I suspect it’s likely the latter – although former efforts by Frost were not what one would call smart by any means, so it’s not that sure.

    That all said, I don’t know what’s worse. In either cases, the reality for staff is go en-masse one way or another. What I’d really like to see is how many/whether the staff is wearing these or not. Given the notes, I suspect they are, which unfortunately just prolongs the CalPERS agony.

  10. boz

    That’s incredible. At my TBTF I cannot imagine badges of support for anyone…let alone the CEO.

    Burgundy: blood in the water.

    I feel for all the staffers who have to labor away under a weak executive/boss. I’ve been there and it’s not a nice situation.

  11. Moeglicherweise

    If I were confronted with this workplace, I would take every ribbon and put them on my shirt. If they keep refilling the baskets I would keep emptying them and putting them on my sacrificial shirt.
    After that it’s just a matter of maintaining deadpan and not giving up any ribbons.

  12. Clive

    Oh, no, CalPERS, please stop. I mean, it was fun for a while, the tawdry scandals, the jailbird antics, the political soap-opera’ing, the slapstick comedy, the executive farce, the hackneyed morality plays, the perjury and the cluelessness. You’ve kept us in entrainment as you’ve worked your way through every corporate trope in the book. There has never been, to my certain knowledge, a corporate edifice which combines the Marx Brothers, Norma Desmond and One Flew Over the Cuckoos Nest. But CalPERS, bless you, has rectified that omission. Containing, as it does, elements of all three.

    But this time, you’ve not only jumped the shark, you’ve dragged him out the water, put in him a tank by the waterfront and are now using him as a Kodak Picture Spot for world-weary bloggers and their long-suffering readers. Please, someone, won’t you think of the children? Or at least, the CalPERS staff.

    I will add that, in my time as a corporate flunkie of the lowest and most buyable sort, I have at various times been proffered — and have duly worn about my personage — all manner of pledge badges, ribbons, wrist bands, t-shirts, baseball caps and even on one truly lamentable occasion a clip-on earring.

    These were to show my support for various do-goodery such as “We’re Fighting a War on Waste!”, “Proud to Support Gender Neutrality,”, “Switch it Off to Save Energy!”, “It’s Our Diversity Day!”, “I’m Helping Britain Succeed!”. And much else besides. Whenever I thought our corporate nomenklatura were looking my way, I’d adjust my apparel or adornment and feign a “I do this not out of duty, but out of my very core belief system” look of pride and diligence. If the situation allowed, I’d comment — in a slightly deferential but still approving tone — how worthy this cause-de-jour was and how I was grateful to have an opportunity to contribute in my small, but (sniff, snivel, tug of the forelock) way.

    As soon as I was safely clear of the building (I might wait ‘til I’d gotten home; you never know who’s watching), I threw the meaningless crap in the trash.

    But fear not, put-upon CalPERS workers, your secrets are safe with me. I won’t tell a soul what cruel fate you’ve got planned for your own personal ribbons of shame once you’re out of sight of the CalPERS management Thought Police. Just one tip I’d offer, however: DO NOT be the first one to be seen without wearing one.

    1. diptherio

      There has never been, to my certain knowledge, a corporate edifice which combines the Marx Brothers, Norma Desmond and One Flew Over the Cuckoos Nest. But CalPERS, bless you, has rectified that omission.

      Like Whitman, CalPERS is large, it contains multitudes.

  13. EoH

    The male driven to brag about the size of his, brain, usually has little to brag about. Any CEO who treats “wearing the ribbon” as an employee duty – and has her underlings shake the trees and take names – has very little backing from rank and file employees.

    Who paid for and distributes the ribbons, did they use any CalPERS resources doing it?

    More importantly, what should all these managers and employees be doing instead of working on a PR campaign for a failing, dishonest senior executive? Asking for a CalPERS beneficiary and California taxpayer.

  14. EoH

    To state the obvious, this is low-rent behavior from a CEO who knows she has a “for cause” end to her tenure in the offing.

    This is not what legitimate leaders do. It’s what they pan when other CEOs do it, for wasting their enterprise’s resources, for lowering morale, and for the opportunity costs incurred.

  15. Samuel Conner

    Doesn’t seem like the initiative of a confident elite.

    Yves — in this line:

    “Their refusal to do so lends credence to the idea that the notion that Frost has made representations for years is true.”

    is there a missing “mis” before “representations”?

  16. audrey jr

    Thanks for yet another post on the on-going disaster that is CalPers.
    So wonderful to see my tax dollars being spent on such a worthy cause.
    As a California taxpayer that is the part that makes me so angry. We’ve got real problems here in CA and CalPers has got this tool at the helm of our gov’t. employees retirement system.
    When is the board gonna wake up and throw this weapons grade liar out of the post she lied her way into?
    Maybe on the twelfth of never?

  17. Anon

    This may very well be the death watch mark. Not so much the action in and of itself, but the fact the Marcie didn’t quash it full force. Her days are numbered.

    An employee of group of employees needs to file a complaint with the union for the obvious reasons. Not wearing the ribbon singles out employees who owe no such fealty as a condition of employment. This is a slam dunk. It is even possible that it opens up the organization and the State itself to employee lawsuits.

  18. ambrit

    I was looking at the picture of the cheap disposable paper plate, Picnic Edition, holding the Burgundy ribbons and had the thought that there was one thing to make this Dysfunction Diva’s ploy a perfect exemplar of Neo-liberalism run amok; make the employees pay for the ribbons they wear.
    “Volunteer the funds to help us display our “Pride in Marcie!”
    I knew that I was in trouble when the Chicken Palace, the sub-sub-par retail emporium that I worked for, made the employees pay for the store logo branded tee shirts it was ‘suggested’ they wear while at work. To my eternal shame, I have two of them in my ‘do not wear till the Second Coming’ clothes drawer.
    I’ll bet, NPI, that Vegas has a betting pool going on based on how long Marcie lasts as head of CalPERS.

  19. MichaelSF

    Will the Glorious Loyalty Oath Crusade be the next item in the queue?

    Captain Black tries to get revenge on Major Major by initiating the Glorious Loyalty Oath Crusade, during which he forces all the men to swear elaborate oaths of loyalty before doing basic things like eating meals. He then refuses to let Major Major sign a loyalty oath and hopes, thereby, to make him appear disloyal. The Glorious Loyalty Oath Crusade is a major event in the camp until the fearsome Major —— de Coverley puts an end to it by hollering “Gimme eat!” in the mess hall without signing an oath.

  20. anarcheops

    I’ve had bosses whom I’m *sure* would have thought this was a great idea. That sign gives me the heebie jeebies. I’d recognize that passive-aggressive tone anywhere.

    Solidarity to your anonymous inside source, surviving in the most toxic of workplaces! Best of luck maintaining your mental health and getting to a better future.

  21. Donna Snodgrass

    Yves, are your tweets being censored? I got this because someone forwarded the link via email. I’ve seen several tweets from you this week, but not this one. Even when I checked my feed it isn’t there. I always retweet and post to facebook when I get CalPERS articles. Because my feed didn’t receive it, I don’t have a posting option for this one.

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