Those of you who have taken interest in the seemingly never-ending saga of CalPERS’ diseased governance and incompetence, and now the determined efforts of its executives and the majority of the board to thwart efforts to clean the institution up may have noticed how the Sacramento Bee, the newspaper CalPERS cares most about, has reliably run what looks like official PR in lieu of reporting. The fact that CalPERS can rely on the Bee to cover its back has helped institutionalize incompetence and bad conduct. Why bother shaping up if you can keep up an alternative reality in Sacramento?
For instance, the Bee failed to take note of the scandal over then CFO Charles Asubonten’s resume fabrications even after Pulitzer Prize winning reporter Mike Hiltzik of the Los Angeles Times wrote a long, critical story. Its first report was to break a story CalPERS had fed it, that CalPERS was launching an investigation. Admittedly, the reporter then covering CalPERS finally wrote a critical piece, well after the scandal was over. The Bee was also largely missing in action during the scandal over CEO Marcie Frost misrepresenting her education before and after she was hired, when that story got attentive national and even international coverage.
In keeping, the Bee manages to find the time to give extensive coverage to far less consequential controversies involving pro-reform board members, JJ Jelincic, who was off the board last year but is running for the retiree seat now held by Henry Jones, and Margaret Brown. And these stories are visibly far from even-handed. See our shred of one example: How Sacramento Bee Reporter Adam Ashton’s Hit Piece on CalPERS Board Member Shows He’s in the Business of Flacking, Not Reporting.
Tellingly, instead of doing bona fide reporting on CalPERS, the Bee also started on a hit piece on us, which came out blunted due to the fact that I had to alert the the executive editor, Lauren Gustus, more than once that the line of questioning that Adam Ashton was taking was consistent with an intent to defame. It nevertheless, as we described, contained significant errors and smears.
In a further sign of decay at the Bee, it has run a series of hit pieces on JJ Jelincic, to the degree that influential retirees have taken issue with the Bee’s motives and fairness. We received a copy of an e-mail sent by former county prosecutor David Soares, who is an officer at the Retired Public Employees’ Association. This evening, Tony Butka, who was the Presiding Conciliator for the California State Mediation & Conciliation Service, published a new column criticizing the Bee’s coverage of CalPERS. Soares and Butka confirmed that each wrote independently and at their own instigation.
It is also noteworthy that Lauren Gustus failed even to reply to the August 8 e-mail below (emphasis original):
Ms. Gustus,
I’m a retired Santa Clara County prosecutor of 32 years experience who also served for 12 elected terms as a labor representative for Santa Clara County’s prosecutors and public defenders (we wisely shared the same bargaining unit and compensation codes). I am still a licensed attorney, a member of the Legislative Committee of the California Retired Public Employees Association, and a current CalPERS beneficiary. I was very disappointed to read Marcos Breton’s one-sided August 8th hit-piece on CalPERS board candidate JJ Jelincic, which fails to seriously address the question asked by the headline: “So how is this CalPERS candidate a favorite to win?”
The short answer is that Jelincic has the endorsement of every major organization representing state and local CalPERS retirees.
The longer answer is that by any objective measure, the current CalPERS Board of Administration under Henry Jones is seriously deficient in the exercise of their constitutionally-mandated fiduciary oversight of the trust fund. Not only is the 2002-2008 CEO of CalPERS still in federal prison for a fraud in which he accepted piles of cash from a placement agent who blew his brains out rather than have to face trial, but CalPERS is still in bed with the source of those piles of cash, the private equity firm Apollo. Apollo’s CEO Leon Black is sadly in the news again, as a prominent associate of “fixer” Jeffrey Epstein.
The current CEO of CalPERS turns out to be a high school educated clerk-typist from the State of Washington who misrepresented herself as having completed the coursework for a Masters in Public Administration — when she had not only never formally enrolled in a college degree program, but the academic institution she claimed to have attended never offered the claimed dual degree. It did turn out that the CEO had supervised a clerical function of the Washington pension system, but the investment and actuarial functions are performed by separate agencies (I guess because Republicans love small government). Former Treasurer John Chaing called for an investigation, but Henry Jones and the CalPERS board simply ignored him.
This unqualified CEO subsequently hired a CFO for nine months who had also fabricated his resume. Even though the CEO tried to publicly defend him, the CFO was fired by the board after Mike Hiltzik ran a scathing exposé in the L.A. Times. The only investment plan yet put forward by the new CEO has been to try to spin $20 Billion in investments off to a private, unaccountable, and completely opaque pair of interlinked firms proposed by tech attorney Larry Sonsini — at an annual fee of $100 Million EACH, plus 20 percent of any profit. Meanwhile, CalPERS can only claim to be 71 percent funded, missing its investment targets by a wide margin.
I’ve personally looked into JJ Jelincic’s past, because I was a member of the Executive Board of the Santa Clara County Government Attorneys Association at the time of the original allegations — and JJ’s father happened to be the public school teacher who had taught my mother to drive back in 1969, when I was 12 years old. Due to my particular interest, at that time I even obtained access to documents and transcripts.
What I found came as no surprise to me as a former labor representative. Let’s just say that in the State of California, an outspoken critic of management and the status quo often runs the risk of being accused of making people “uncomfortable.” That is all that was ever sustained against Jelincic, not gender bias. It did not appear to have been coincidental that these allegations were only made after he asserted strong oversight over CalPERS staff as a board member. Jelincic was re-elected to the CalPERS Board and as president of his union local in the aftermath, which ought to tell you what the rank-and-file thought at the time.
I am extremely disappointed by some people joining what amounts to a campaign of slander against a person who is highly qualified and who I sincerely believe to be unbiased. CalPERS management are orchestrating this campaign, which one of their aides made very clear to me at their off-site in July. Jelincic running against a person who only seems interested in preserving his $44,000 in annual travel reimbursements https://www.calpers.ca.gov/docs/travel-report-fy-2017-18.pdf
As a former prosecutor, I have always been concerned about how unintentional bias may creep in to our decision-making. Could Opinion Editor Gil Duran be suffering from unintended bias when it comes CalPERS? His former employer Jerry Brown failed to take strong action against the former CEO during Mr. Duran’s tenure as his press secretary, and instead we faced the sad spectacle of a federal prosecution. I hope that this is not the case.
David Soares
Thursday evening, LA Citywatch published Tony Butka’s latest article, Is the Sacramento Bee a Newspaper or a Front for the CalPERS Staff? I urge you to read it in full. The opening part:
On August 30, ballots go out for an important election for Retiree Member of CalPERS Board of Directors.
On the one hand, there is the incumbent establishment Icon, Henry Jones, and on the other, is former Board member J.J. Jelincic, a man who actually understands what fiduciary responsibility means.
So why is the Sacramento Bee newspaper running a series of hit pieces against challenger J.J. Jellincic? As far as I know, nobody on The Bee’s staff is an actual CalPERS beneficiary, so what’s in it for them?
One of the stories that Butka dissects contains claims made about a State Personnel Board discipline against Jelincic in 2011. I suspect unlike just about everyone who has hyperventilated about it, I got the SPB filing many years ago and read it. It involved three employees when Jelincic was an employee. There was one allegation per employee. One said Jelincic said she had nice shoes. One said Jelincic complimented her on her dress. The third claimed he looked her up and down “with bedroom eyes”. Given that Jelincic wears glasses and the lenses look thick, I have trouble seeing how anyone could determine that.
Jelincic was found to have been “discourteous”. Not the “s” word or the “h” word. But they somehow got into the press years ago. No wonder Jelincic’s disputes that characterization.
It isn’t just sad to see the Bee in such decline. Its journalistic dereliction of duty is also a tremendous disservice to CalPERS beneficiaries and CalPERS taxpayers. And the Bee does not have to toady to CalPERS to get access; CalPERS needs the Bee more than the Bee needs CalPERS. Accordingly, the writer responsible for the widely read State Worker column a few years ago, Jon Ortiz, was far more evenhanded in his CalPERS coverage than either of his successors.
How can you trust a paper that acts like a paid attack dog? The Bee will eventually find out that it can run on brand fumes only for so long.
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The Bee has published pieces recently which amount to sheer libel but that is not the most disturbing aspect of this saga. Yves ran several articles on CalPERS recently in one hit because of all the antics that they were up to. So I did an experiment. I punched in the name ‘calpers’ into Google and when the results came back, clicked on ‘news’ to see what was written. I then filtered out the content to what had appeared in the past 24 hours and there was zip from NC as in nothing, nada, bugger-all. Considering the fact that I have seen NC articles on other topics appear on Google within a hour or two, I can only conclude that Google has hid these results on purpose. So apart from the fact that Google and CalPERS are both headquartered in the same region, how do they get the clout to get Google to tweak their algorithm to CalPER’s benefit? When you depend on getting your news from another’s platform…
I just checked 5 pages of google news using the term “CalPERS”. Not a single mention of NC. Essentially nothing but fluff pieces and press releases (same thing?). Shocking, really, when you consider this is the most widely used search engine that people use to find information.
Also, thank you for the continuous excellent reporting.
Moments ago I did a DDGo search using “CalPERS” and it returned numerous articles by NC, SacBee, LADaily News. In fact, the predominant results are NC articles (including today’s). YMMV?
I got a pretty good response by googling for “naked capitalism calpers why doesn’t google link to these stories” which, strangely enough, brought up many links.
Google calpers nc and nothing in top hits (didn’t look further).
Google calpers nakedcapitalism and various hits come up, but NOT the home page.
It worked for me; not sure why different (also DDG)
CALPERS naked capitalism (with or without the space in the ‘blog name)
leads to exactly the right place (first “hit”):
https://www.nakedcapitalism.com/category/calpers
DDG is not G which is why different…
to clarify, I got Yves’ page with all the NC calpers articles with both Google and (also) DDG, and both had the right link as the first hit.
This is strange, and it suggests (to put it mildly; perhaps “indicates” would be more accurate) that different users can get different results from Google using the same search terms.
My Google and DDG searches were done from within Firefox.
Could Google be customizing search results based on … something? Its own prior surveillance of the searcher’s internet activity?
I stopped using Chrome and Google a while ago for routine searches; occasionally go back if DDG does not find something that I think should be there.
This has been well known and openly discussed for years. There was a TED talk about it a couple years ago. James Corbett has discussed it, among many others. Some discussions have centered on how this ends up putting people into “bubbles” that will reinforce a user’s world view, no doubt including “guidance”.
It’s based on the data Google accumulates from users, then its algos return results influenced by this. (This is in addition to the growing censorship/down-ranking of various people, sites and points of view, and promoting of favored perspectives.)
Google gives completely different results depending on the device I use, as different devices have different usage histories.
DDGo uses the Google search engine. It just strips away the personal info, I believe.
I was skeptical but DDG is like Google used to be before Google crapified itself.
What do the SacBee and a verbal contract have in common?
They are not worth the paper they are printed on.
Perhaps they could append “Ess” to their corporation name.
Or an ‘n’. ;)
SacBeen. Yeah, that works. heh.
Interesting. Epstein even. Butka was good; mentions NC and Hiltzik. Very had for me to understand how the people and the state of CA are so unconcerned about the fate of CalPERS. To my thinking if CalPERS is as mismanaged as it is reported it will bankrupt the state of California when they have to bail it out for years of total incompetence and hidden accounts. And then, of course, the US government – all of us – will be bailing out the state of California. So in that sense alone California should be responsible enough to fix this mess. By much the same reasoning they should also decommission Diablo Canyon nuclear reactor, etc. This is dereliction on the part of California. Can the Federal Government move in on CalPERS as the ultimate party of interest here? Let’s ask Nancy and Diane.
Whoa, whoa, whoa.
California has the fifth or sixth largest economy in the world. It has nearly as many people (40M) as Spain (46M), who claimed it in the 1500’s. While there are millions of CalPERS beneficiaries, only state employees have a direct legal claim on being made whole if the benefit fund were unable to meet commitments. My point is that California can handle substantial losses through its taxing power (but not without consequence). Hell, they just raised the registration fees on vehicles (more vehicles than people) by a minimum $30 and I haven’t heard a howl.
That said, more Californians should be reading NC for CalPERS insight.
Susan the Other, CalPers is above average amongst California State Agencies.
$100 Billion for a high speed train to nowhere, NO money to fix critical infrastructure.
California is a Kakistocracy with an embedded degree of corruption that is spectacular.
The reason nothing has been done about CalPers is that it is BAU.
I would think that if there is documented evidence of Board misgovernance (the hiring of MF [don’t know if the CIO is appointed by the board or hired by the CEO; if the former, also CA] is a recent example where there appears to be inadequate board due diligence in the making of a high-level), the beneficiaries would have standing to bring a civil action against the Board.
That might be the most effective means of compelling performance of duties. I would think that if board members knew that they could get into legal trouble for not performing their duties, it might disincentivize potential candidates who were not interested in the nuts-and-bolts of this kind of oversight.
Yves: have you seen this:
https://charlesasubonten.com/
If this is put up by CA, it seems pretty brazen.
I can’t view his profile since he blocked me. Could you please cut and paste the relevant section? Thanks.
Here’s a portion of the text from his website:
My Passions
I like to create value. Simple! And make the world a better place. Are there people jealous out there who have tried to malign me? You bet! Do not believe any of the lies that the so-called “reputable” newspapers are cycling from a gadfly! I can prove it!
Am not a LinkedIn member and don’t want to become one.
If other readers are already members, perhaps look in to this. But perhaps don’t log in through the “in” button at the above site; go directly to LinkedIn from your browser address bar. Perhaps I’m tin-foily, but I don’t like to click through unrelated websites to get to login-pages at other sites. It might be a credentials-harvesting trick.
Oh, that’s hilarious (if you’re not a CalPERS beneficiary)!
“Charles Asubonten, CPA, CFA is an experienced Chief Financial Officer
“served most recently as an ACE (Achieving CalPERS Excellence in Core Values) award-winning CFO at CalPERS”
..an ACE (Achieving CalPERS Excellence in Core Values) award-winning CFO at CalPERS
Right. You can’t make this stuff up!
It gets even better – (this one seems aimed straight at NC):
“I like to create value. Simple! And make the world a better place. Are there people jealous out there who have tried to malign me? You bet! Do not believe any of the lies that the so-called “reputable” newspapers are cycling from a gadfly! I can prove it!”
hahahahaha…..
Thanks for NC’s continued reporting on CalPERS, PE, and pensions.
(You gadfly! – a title of honor, imo, referencing corruption-busters from the Gilded Age and Progressive Era, including the famous Donn Piatt, Ida Tarbell, Upton Sinclair, and Lincoln Steffens. ‘Gadfly’ is a term used to try to shut up and dismiss as irrelevant a writer or newspaper reporter getting too close to exposing the ugly facts. Congratulations on joining a rather august company of writers and reporters. )
adding for readers new to the story:
“..an ACE (Achieving CalPERS Excellence in Core Values) award-winning CFO at CalPERS”
is true in the narrowest sense that it’s the basis he was hired on. However, it omits the reason he was let go. heh. Cons gotta con, imo.
“Attention, all state government employees in California,
you may not get that pension that you were counting on…
Read Naked Capitalism. (Link)
Wonder how long it would take for that to spread through social media?
That would not be accurate. Pensions in California are backed by the government agency that provided them, per the state constitution. San Bernardino creditors tried to force the city to cut its CalPERS obligation (more accurately, its pension obligation that CalPERS was managing and CalPERS was telling them what the annual tab would be to keep funding it) in bankruptcy and lost.
https://www.sacbee.com/news/business/article20770341.html
The issue is that making up for the underfunding is and will continue to strain budgets.
Particularly the budgets of CA Taxpayers.
Thank you for the ongoing education of the citizenry on this important topic.
Assume CALPERS bankruptcy, shorfall etc.
Would the money to pay the pensions come from the general fund of the local governments that funded them, and if so, would the pensions get first dibs on that money, or, would the pensioners be unsecured creditors in case of government bankruptcy?
Are the pensions a preexisting obligation not subject to voter approval? Or, would California voters get to vote, and have to pass by a 2/3rds majority any “new taxes,” since their property and sales taxes were not being spent on their traditional uses, having been blown by the agency entrusted with them?
I am not on top of case law in this area. I believe so far that CalPERS has been successful in keeping CalPERS pensions from being cut in municipal bankruptcies.
Yves
Has NC made use of Google News Publisher Help?
https://support.google.com/news/publisher-center/?authuser=0#topic=9010455
Tbh, the Sacramento Bee has been on a downhill slide even before demise of it’s former journalistic competitor, the Sacramento Union. The Capitol City has, for some time now, been a ‘one-horse’ town, after all … and frankly, that one lame horse is way past due for the glue factory !
So the Bee being in cahoots with _____ (pick your poison du jour) is nothing new.