CalPERS’ Blatant Election and Mail Fraud: See-Through Envelopes for Completed Ballots; Illegal Electioneering by Treasurer Fiona Ma, Board Members David Miller and Theresa Taylor; Huge and Illegally Opaque Spending Against Challenger JJ Jelincic

CalPERS and its election vendor, K&H Printing, have implemented an illegal, non-secret ballot for the election currently underway, for the hotly contested retiree board seat. As we’ll describe, K&H Printing can readily see which candidate a voter has selected prior to treating the vote as having been submitted. This gives CalPERS the ability to discard mail-in votes for the candidate its executives and the majority of the board vehemently opposes, JJ Jelincic.

We’ve predicted that CalPERS’ culture of of casual lying would lead to criminal conduct, and it has finally occurred.

CalPERS is using ballot envelopes that allow anyone to see how a vote was cast. That makes it trivially easy simply to dispose of ballot envelopes that contain the “wrong” vote well before the envelopes are unsealed and the ballots are scanned and tabulated.

This abuse is not simply a violation of the California Constitution requirement that “Voting shall be secret.”1 If CalPERS proceeds with the scheme it has set up, its executives and employees, as well as their counterparts at K&H Printing, will be committing mail fraud, a Federal crime.

CalPERS’ top brass and its allies in organized labor have made clear that they oppose former board member JJ Jelincic, who is challenging incumbent Henry Jones for the retiree seat. Labor’s support for Jones is perverse given not simply that Jones has been substantively missing in action, but also that Jelincic is the former head of a major union, while Jones was a member of management.

CalPERS and union co-conspirators have gone to extraordinary lengths to try to undermine Jelincic, who has been and remains the favorite. The spending against Jelincic is off the charts by the standards of past CalPERS board elections. On top of that, many of the organizations pumping against Jelincic have failed to make required disclosures of their funding sources.

Even more troubling than the extent of dark money influence is the open, illegal electioneering against Jelincic by state Treasurer Fiona Ma, who sits ex officio on the CalPERS board, and CalPERS board members David Miller and Theresa Taylor. CalPERS employee Charity Joy Bowman and Gabriela Urdeneta have also campaigned illegally by sending out e-mails attacking Jelincic, signed as “CalPERS Team Member.” CEO Marcie Frost and General Counsel Matt Jacobs are complicit by failing to intervene when told about this misconduct.

Today’s post will focus on the ballot chicanery. We’ll discuss the other elements of corruption, that of covert funding and officials impermissibly electioneering in a later post.

Ma and Miller may feel they can safely flout the law in a one-party state like California, as witnessed by staff and board members’ regular criminal violations of the Bagley-Keene Open Meeting Act.

But mail fraud is an entirely different matter. The Department of Justice likes high-profile mail fraud cases because they are easy to prosecute and win. It’s not hard to imagine that the Department of Justice would see a mail fraud case involving CalPERS and potentially other California officials as attractive.2

Staff members at CalPERS and the employees and managers responsible for ballot processing at election vendor K&H Printing should think hard as to whether it’s worth wearing an orange jump suit or merely being found guilty of a felony and paying large fines to help CalPERS rig an election.3

And K&H Printing is clearly complicit. As Lambert pointed out:

I’ve bought printing. There’s no possible way K&H Printing could deliver a see-through ballot envelope without knowing exactly what they were doing. That’s their business: to know the effects of ink on paper stock.

CalPERS Blatant Election Rigging

CalPERS and the Taliban have a lot in common: both hate democracy.

CalPERS has repeatedly tried to rig its board elections. Recent measures include having an illegal, non-secret mail in ballot; implementing scripts for the “vote by phone” channel that clearly favored the incumbent; pushing insecure, tamper-friendly voting by Internet; making the elections impossible to audit properly; deliberately delaying the release of information unfavorable to an incumbent.

But this new way to tip the scale rises to a new level of brazenness and criminality.

Below are images of a completed and sealed ballot for the current election, taken at a Starbucks in indoor lighting. Even in a not-very-close up shot, if you look at the area below the return address immediately under the zip code, you can easily see the filled-in bubble for the second of two choices, which is for JJ Jelincic.

This image shows the ballot envelope held up to light. See how you can read all the words inside, and most important, the candidates’ names and the voter selection!

Note that if the ballot is put in the envelope with the text and voter selection facing the flap side rather than the address side, they are not quite as easy to read but still visible without holding the envelope up to a light.

We’ve discussed previously how CalPERS’ claim that the ballots will be counted in public is just a sham for the rubes, but this scam takes its contempt for its beneficiaries to a new level.

A bit of background: CalPERS’ election vendor for the printing, mailing, receipt, and scanning of the ballots is K&H Printing, which operates its election rigging election counting side business under the DBA “Integrity Voting Systems”. Every week during the one-month election period, CalPERS publishes a tally of how many votes have come in and by which channel: mail in ballot, phone, and Internet. Paper ballots are still the most popular way to vote, despite CalPERS’ concerted efforts to push tamper-friendly Internet voting. Paper ballots are expected to be an even larger proportion of total votes cast in this retiree election.

The supposed public count of the ballots is no such thing. CalPERS allows the public to view what it misleadingly depicts as the official count. In reality, what they can see is the opening and scanning of ballots in the Everett, Washington K&H Printing facility. Admittedly, there is some value in having outsiders oversee the adjudication of ballots which aren’t marked clearly enough to be scanned or that get mangled by the scanner.

But in no way, shape or form does this activity at K&H Printing constitute a count. The scanned ballot images are then transmitted to a completely different site, where another party tabulates the votes from the scanned images. There is no public oversight of this tabulation, nor public access to the software to see if it is accurate and reliable.

In other words, there’s way too much “Trust me” at work, particularly given CalPERS’ history of acting in bad faith.

But now rather than run the risk of having a manual count of the ballots (which do get archived with the Secretary of State) expose election funny business, the see-through envelopes allow CalPERS to perpetrate a perfect crime. Have K&H Printing throw out a significant percentage of the ballots marked for Jelincic before they are logged as counted.

Keep in mind that the ballot envelopes get sent through an optical scanner so that K&H Printing knows who voted to ensure no double votes (say by people who voted by phone or requested a duplicate ballot) before they are even counted as “by mail” votes. It would not be difficult to use an optical scanner to sort the votes for JJ Jelincic and Henry Jones as they come in.

If you think that sort of process wouldn’t be used to disappear votes for Jelincic, I have a bridge I’d like to sell you.

How CalPERS Made This Election Fraud Friendly

CalPERS could easily have implemented typical procedures for absentee and mail-in ballots to assure voters that they weren’t cheated out of their vote. For instance, mail-in ballots usually include a tear-off portion with an identifying number. The voter can later check with the county registrar to determine if their ballot was received and counted.

There’s no such check with the CalPERS ballots. So CalPERS could readily publish election results that would show lower vote counts than actually were lodged, but voters would have no way to establish that a large number of votes submitted went poof.

Similarly, the see-through envelope was CalPERS’ doing. K&H Printing surely knows what weight of paper is needed to prevent the contents of a mailer from being read. And having heavy enough stock for mailed-in ballots would be a basic requirement in public elections, which represents the bulk of K&H Printing’s ballot printing business. Members of both major parties regularly have access to absentee ballots and observe them being opened and counted. Readers who have been involved in elections said there would be a hue and cry if anyone encountered see-through envelopes for mail in ballots.

We’ve embedded the section of the agreement with K&H Printing that describes the ballot and envelope printing. Note that it specifies the weight of the paper for the outbound mailer but not for the return envelope. The agreement does not require that the votes be kept secret, but it does make all the components of the mailing subject to CalPERS’ approval. So CalPERS can’t point fingers at K&H Printing for the see-through envelopes. This was clearly a feature, not a bug.

What Can You Do?

The multiple violations of law, both with the ballots, and with the illegal electioneering by state officials, which we’ll discuss in our next post, shows a level of desperation and recklessness that would seem to be out of proportion to the importance of a single CalPERS board seat.

What is striking about the vehement opposition to Jelincic is that during his tenure as board member, he stood out by asking the occasional basic question that any competent investor, let alone a huge and well staffed fiduciary like CalPERS, should have been able to answer. Note that Jelincic was severely constrained by the limits CalPERS places on how much floor time individual board members get as well as the stunning lack of interest among the rest of the board in doing basic oversight.

The fact that CalPERS executives were unable to handle softballs from Jelincic and routinely showed they could not get out of its own underwear was treated as a heinous crime, as opposed to a badly needed early warning that CalPERS was out of its depth and thus an easy mark for Wall Street.

Jelincic’s sin was exposing that the supposedly most sophisticated public pension fund was incompetent and asleep at the switch. The vehemence of the campaign against Jelincic suggests that exposing the low standards of public pension fund management and board oversight threatens a lot of rice bowls.

I hope readers will do what they can to combat official misconduct, and CalPERS behavior has been so egregious that it call for action. Please do as many things on this list as you can:

1. Please send this post to everyone you know in California, particularly CalPERS beneficiaries. Remind them that the state and local government bodies backstop the fund, and with CalPERS already underfunded, its tendency to toady to Big Finance as opposed to serve beneficiaries comes out of taxpayer pockets.

2. If you are in California, please send a link to this post with a suitable short and pointed cover note to the following officials:

Secretary of State Alex Padilla, whose office will have to certify this garbage barge of an election. Deny him the “I’m in charge and I know nothing” defense if the Feds take an interest.

California Secretary of State
1500 11th Street
Sacramento, CA 95814
(916) 653-6814

Governor Gavin Newsom

1303 10th Street, Suite 1173
Sacramento, CA 95814
(916) 445-2841
Contact form: https://govapps.gov.ca.gov/gov40mail/

The heads of the Assembly and Senate pension committees: Jerry Hill (Senator.Hill@senate.ca.gov.; phone (916) 651-4013 or
(650) 212-3313) and Freddie Rodriguez in the Assembly (Freddie@FreddieRodriguez.com; fax 909-902-9761).

Your state Assemblyman and Senator (find your Assemblyman here and your Senator here)

Fiona Ma

California State Treasurer
Post Office Box 942809
Sacramento, CA 94209-0001
fiona.ma@treasurer.ca.gov

Betty Yee

California State Controller
P.O. Box 942850
Sacramento, California 94250-5872
(916) 445-2636
b.t.yee@sco.ca.gov

3. Make the second image go viral on social media, such as Facebook and Twitter. Suggested headline: “CalPERS Management Prints See-Through, Not Secret Ballot for Hotly Contested Election.” Also be sure to post the image on any message boards or other channels that CalPERS retirees use.

4. Send a link to this post and a suitable short and stern cover note to your local or area newspaper, as well as any local or area news stations. Be sure to include one of the images of the see-through ballot envelope, preferably the second, which is vivid. Elected officials are very sensitive to in-state coverage.

5. Tell every CalPERS retiree to vote for Jelincic on paper. The more the system is overwhelmed with your votes, the harder chicanery will be.

Anyone this hated by Wall Street isn’t just on the side of beneficiaries. Jelincic has shown that he’s an effective enough advocate to have Big Money shaking in their boots.
____

1 The see-through envelopes also violate the California Elections Code but CalPERS has taken the position it is not bound by that legal code.

2 One path to mail fraud is through honest services fraud. If this scheme goes forward, some and perhaps many beneficiaries will have been deliberately cheated out of their vote. The Wikipedia overview is pretty good. Key section:

The statute grants jurisdiction to the federal government to prosecute local, state and federal officials. It is frequently used to fight public corruption because it is easier to prove than bribery or extortion. The term “honest services” is broad and open to jury interpretation, according to several legal experts. Prosecutions under the 1970 Racketeer Influenced and Corrupt Organizations Act (RICO) frequently use violations of the honest services statute, as mail and wire fraud are predicate acts of racketeering; therefore, two mailings or wire transmissions in the execution of honest services fraud can form “a pattern of racketeering activity.”…

The law is reportedly a favorite of federal prosecutors because the language of statute is vague enough to be applied to corrupt political officials’ unethical or criminal activities when they do not fall into a specific category, such as bribery or extortion….

Nevertheless, prosecutors must still prove all the elements of mail fraud or wire fraud in a case regarding a scheme to defraud of honest services.

3 It is not yet possible to discern whether the see-through ballot scam was devised at the senior levels of CalPERS and K&H Printing or at the operational level through union channels. Recall that Kim Malm, the CalPERS official responsible for the elections, publicly thanked union fixers Terry Brennand and Dave Low for their help in getting Internet voting approved. Given how tamper-friendly Internet voting is, and that CalPERS has refused to provide for a paper trail in their implementation, one has to wonder why these two major forces at CalPERS threw their weight behind it. Note that the Teamsters are represented at K&H Printing, which could provide a channel for influence.

00 IVS Agreement Part II
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27 comments

  1. oaf

    “Ma and Miller may feel they can safely flout the law”

    …while they flaunt their invulnerability….

    “…laws are for little people…”
    oafstradamus

    Reply
  2. drumlin woodchuckles

    Could one defeat the see-through nature of the envelope by wrapping a vision blocking layer of paper or foil around the parts of the ballot that CALPERS wants to see through to? Would the Postal Service still mail such a vision-blocked ballot-in-the-envelope?

    Reply
  3. flora

    CalPERS is using ballot envelopes that allow anyone to see how a vote was cast.

    Well how else they gonna tell which ballots to trash? heh.

    On a more serious note, I’ll add a 3rd thing CalPERS voters can do if they are so inclined:
    add a second sheet of regular letter size plain white paper behind the ballot paper and fold the two pages together to place in the envelope. Create a curtain against spying eyes.

    Thanks for your continued reporting on CalPERS, PE, and pensions…. and the cesspool corruption in CA.

    Reply
  4. ChrisPacific

    I realize there is the aphorism about never attributing to malice what can be explained by incompetence. Even so, I am having trouble seeing this as accidental. Before I had finished high school I knew to use security envelopes for mailing sensitive documents. The brief is very clear about the nature of the information being transmitted. Are we supposed to believe that both K&H and CalPERS missed this – particularly when K&H is supposedly in the business of providing secure mailing services, as Lambert noted? Too much incompetence, by too many people who should and probably do know better and all coordinated in the same direction, for me to swallow.

    Reply
    1. drumlin woodchuckles

      There is a counter-aphorism. It comes in two flavors.

      Stupidity is the best all-around cover an agent ever had.
      Incompetence is the best all-around cover a saboteur/embezzler/rigger/whatever ever had.

      Reply
  5. The Rev Kev

    Hang on a minute. I’ll just open a tab with music to set the theme of this article. I am considering making this the CalPERS theme song-

    https://www.youtube.com/watch?v=27mB8verLK8

    K&H Printing? They have graced several articles on CalPERS with their presence. Do they still do the scanning of those votes in their home state of Washington before sending down the “results” for tabulating in California? Mail fraud seems to be a risky move on their part here though. Even I know that this constitutes a Federal crime and not just a State one. Having buddies in the California Department of Justice may not help with a Trump dominated Federal government. Hmmm. If they still count those votes in Washington, that would mean transporting them across State lines which would make it deliberate act and undeniable in a court of law. Does mail fraud have a statute of limitations on it? Enquiring minds in Everett, Washington may wish to look that one up.

    I took a quick search for the penalty for mail fraud in the US and it says that “The fines, prison sentences, and other consequences that follow conviction for wire and mail fraud companions vary considerably, with fines from not more than $25,000 to not more than $2 million and prison terms from not more than five years to life.” Bit of a risk that for keeping the CaPERS contracts flowing and it is not like CalPERS can substitute computer voting in their elections and do away with K&H Printing.

    The moves to keep J J Jelincic are really getting frantic. There have been smear pieces on him in the Sacramento Bee which will not be forgotten. I am not sure here though when it escalates to a report to the U.S. Postal Inspection Service but in a disputed election result, it cannot be discounted that. However, I am sure that this is a risk well worth taking by those involving themselves in an election conspiracy to keep a Board seat going the way that they do not like. Good luck with that.

    Reply
  6. ALM

    I am a CalPERS retiree. Last week, I received my mail ballot on the same day that I received campaign mail bankrolled by “Concerned Retirees for Pension and Healthcare Security” who are even more concerned about secrecy because there is no trace of them on the internet. The envelope used was deliberately designed to give the appearance of official state mail sent to all CalPERS retirees at the direction of Fiona Ma in her capacity as State Treasurer. The campaign email included a copy of a July 15, 2019 open letter on State Treasurer letterhead to Mr. Jelincic from Fiona Ma and State Senator Connie Leyva asking Mr. Jelincic to withdraw from the election based on his public reprimand by the Board 8 years ago.

    I sent an email directly to Mr. Jones to complain about the deceitfulness of the campaign mail supporting him. I also informed Mr. Jones that the campaign mail was reason enough to vote against him. He denied any knowledge of the campaign mail or the dark money group backing him.

    This is the first dark money backed campaign mail that I have received in any CalPERS election. It’s also the first CalPERS election that I am aware of in which an elected state official has trashed a candidate in her official capacity as a state official.

    I have written complaint letters to all Board members and will be writing another round of complaint letters as recommended by Yves. Because Fiona Ma is a member of the Jelincic firing squad, I don’t expect any response or action from her. Senator Jerry Hill has also disappointed because his past responses to my CalPERS complaints have made it very clear that he is steering clear of this buzz saw. But at least his office responded to my letters which is more than I got from any of the others, including Newsom.

    Reply
    1. Yves Smith Post author

      Good for you! The more people who feel the heat the better. Thanks so much for taking action, and promptly too.

      I didn’t want to overegg this post, but that was the Fiona Ma business we alluded to above and will discuss long form this week, hopefully early in the week. We have screenshots, and the bottom line is her conduct is egregious.

      Reply
  7. Sacramento Sal

    My crafty wife placed my ballot inside a standard #10 envelope, cut off the top to make it fit, then slid the ballot and envelope inside the provided CalPERS envelope and now my vote is secret.

    This will cause some delay but it’s worth it to not have this election stolen by underhanded CalPERS staff.

    Reply
    1. Abbott Labrador

      The problem with this approach, as Yves alluded to in an earlier response to a comment, is that anyone trying to keep their vote secret is almost certainly trying to cast a vote for Jelencic. So the rule-of-thumb for anyone engaged in election rigging is to trash any envelope the contents of which can’t be read.

      I understand your frustration though and wish I could offer a solution.

      Reply
      1. Yves Smith Post author

        I think the point is the one made in the article: that the mail in channel is still less tamper-friendly than phone or Internet, where a single person could doctor the records. For chicanery to take place with the ballots takes multiple people at a minimum, and physical action (tossing ballots). There is way more risk to everyone involved getting caught, and now they’ve been put on notice that CalPERS voters are on to them, and they are at risk of big fines and even jail time.

        So the most important step is voting by mail and documenting you voted (pictures of your ballot and your sealed envelope, better yet also having someone witness putting the envelope in the mail, or if you have the time and money, sending the envelope certified mail). The more votes come in for Jelincic, the harder it will be to play games, particularly now that CalPERS and K&H Printing know that the public knows what they were ginning up.

        So the second envelope isn’t a bad idea, but I would not make it the first line of defense. Take photos and vote by mail!

        Reply
      1. Yves Smith Post author

        No, that’s not correct. CalPERS does require that you use its mailer, so using a different OUTSIDE envelope would invalidate your vote.

        I just don’t think it’s the best remedy.

        Reply
  8. John Zelnicker

    Yves – The URL for your link “tamper friendly voting…”, second paragraph under the CalPERS Blatant Election Rigging sub-head is missing the “https://www.” part at the beginning. My browser (Opera running on Windows 7 Pro) can handle it, but some browsers may not be able to.

    Reply
      1. John Zelnicker

        Oh, phooey. My apologies.

        It was my browser truncating the URL so it would fit across the bottom of my window (I don’t maximize my windows normally).

        Great post, BTW. I’m looking forward to your exposure of additional potential criminal conduct.

        I hope someone at DOJ will get involved if this scheme goes through. Trump would have a field day going after those “libs” in California. Not that that’s a good thing, but he would be likely to approve of any such investigation.

        Reply
  9. Pat

    I wonder if the unions themselves have used these tactics. Just noting that for my union the SOP for…well…decades has been the ballot is to be placed in a smaller envelope just labeled ballot which is then put in the return envelope with the voters identification suitable to checked for eligibility for our elections. This allowed for the ballots to be opened as a group away from any voter identification, not to mention making sure you couldn’t tell the vote(s) by holding the return mail envelope up to the light.

    Reply
  10. Clive

    Secure printing is a mailing and distribution industry 1-0-1. My TBTF has well-established rules, boilerplate contract terms and procedures for random sampling to ensure compliance where printed materials (such as bank statements and the like) are produced. Any mailing-house wothy of the name will have a range of standard paper and envelope options for “confidential” materials where you don’t want the contents to be visible. When I’ve dealt with bulk printing and mailing contracts, such as for credit card carriers, I always get prompted for any special requirements for not only confidentiality, but things like opening force (to prevent the envelopes from accidentally peeling open in transit or by the postal delivery services inserting them into mailboxes), tear resistance (to prevent damage to the envelope or the contents) and burst-proofing (to eliminate air pockets which could cause the envelope to “pop” if crushed). It costs more, but there’s prescribed standards which mandate these things in numerous business areas, so it’s a check-box exercise to get them in place for your mailing.

    And specifically for balloting, again, this is absolute basic never-omitted specification. Here’s the UK Electoral Commission, for example, if postal ballots are outsourced to a mailing service provider:

    2.17 A postal ballot paper must be the same as a polling station ballot paper.
    All ballot papers should be produced on paper of a sufficient quality to prevent
    the voters’ marks, including those made with pens etc., being seen –
    particularly during postal vote opening sessions and during the verification of
    votes, where the ballot papers must always be kept face down.

    Come on CalPERS, if you’re going to be sneaky, underhanded and anti-democratic, at least put some effort into your conniving. Even Kim Jong-un makes sure that the crosses on ballot papers with only his name on it can’t be seen.

    Reply
  11. Lambert Strether

    I was wondering if simply making the envelopes out of cellophane would be simpler, but unforrunately cellophane envelopes are more expensive than paper ones. Just trying to help, no thanks needed.

    Reply

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