By David in Friday Harbor
Naked Capitalism has played a crucial role in shaping my social and political perspectives for over fifteen years. I’m honored to have the opportunity to share the impact it has made in my life, with the hope that it inspires others to overcome their skepticism and consider supporting this invaluable platform through the Tip Jar. I have contributed several times to help sustain this essential resource.
Having spent 32 years in government service contributing to CalPERS, the pension fund managed by the State of California, I retired in late 2016. I now benefit from a pension that I and my employer funded through payroll deductions during my career.
Valued at approximately $556.2 billion, CalPERS stands as one of the largest and most influential public trust funds globally. Its immense size also makes it an attractive target for financial schemers and political opportunists.
Long-time readers will be aware that the CalPERS pension system has faced considerable controversies over the years. Naked Capitalism and its community have been at the forefront of holding authorities accountable. The relentless investigative work by Yves Smith at Naked Capitalism, along with connections forged through the Commentariat and Naked Capitalism meet-ups, has surprisingly influenced the trajectory of CalPERS.
Many will recall the tumultuous events surrounding CalPERS following the appointment of former State Assembly Speaker and San Francisco Mayor Willie Brown, a mentor of California Governor Gavin Newsom, to the CalPERS Board of Administration. After the resignation of former CEO Fred Buenrostro in 2008, he was eventually indicted for defrauding the fund in 2011. As part of his plea deal in 2015, Buenrostro named a former Board member, Al Villalobos, as someone who aided in funneling funds to Apollo Global Investments, linked to Jeffrey Epstein’s financial dealings. Tragically, Villalobos chose to take his own life rather than disclose the extensive money trails he managed. Ultimately, Buenrostro received a prison sentence that was longer than what the Department of Justice had recommended.
These troubling events indicated serious issues within the private investment sector that manages the retirement savings of public workers and taxpayers. Instead of addressing these concerns with transparency, public officials and the CalPERS Board opted for a cover-up, a choice that included appointing unqualified and incompetent executives who demonstrated little grasp of private market investments. Regular readers have witnessed the unfortunate turnover of inept leadership in an organization that once enjoyed a solid reputation for management.
The imprisoned CEO was succeeded by Anne Stausboll, a legal writing instructor lacking financial qualifications, who left unexpectedly in 2016. Marcie Frost, her successor, was presented as having a dual bachelor’s and master’s degree in public administration, when in reality she was merely a high school-educated clerk-typist without a college degree. The General Counsel, Matt Jacobs, was a criminal defense attorney unfamiliar with investment practices.
The CalPERS Board made another questionable choice in appointing Ted Eliopoulos as CIO, whose main qualification was his previous stint as an in-house attorney. They further misstepped by hiring a CFO who was later exposed as a fraud and was removed before completing his probation. Following Eliopoulos’s departure after years of avoiding inquiries on controversial investments, the next two CIOs also had brief tenures due to corruption unveiled on this platform. Consequently, “Everything is like CalPERS” became a popular meme symbolizing the neoliberal erosion of capable government everywhere.
While the situation may seem dire, the steady stream of investigations by Naked Capitalism has begun to yield positive results for California’s workers and retirees.
This past year, CalPERS appointed a highly qualified Chief Investment Officer with four decades of experience. They also brought in a new General Counsel with a strong background in overseeing private investments at the SEC. These changes signify a significant shift for CalPERS, likely spurred by the dedicated reporting from Naked Capitalism.
It’s essential to recognize that Naked Capitalism has substantial implications, not only for CalPERS beneficiaries but also for California taxpayers who support this massive fund.
Justice Brandeis was right: sunshine is the best disinfectant, and electric light acts as the best watchman. Although it often feels like we are shouting into the void, we must continue to raise our voices. Occasionally, the winds of change allow our concerns to be heard, helping us stake some firm ground before we face the next storm.
I urge you to contribute generously to support the Naked Capitalism fundraiser. Follow this link to the Tip Jar to make your donation.
