Skip to comments.CA: Pay to play - Pols hang 'for sale' sign on pension funds (CalSTRS)
Posted on 09/18/2006 9:58:47 PM PDT by NormsRevenge
Even as it tackled a long-term $20 billion gap in funding for the state's school employees, the California State Teachers' Retirement Board found time at its meeting last week to plug another hole: the millions of dollars that firms which handle, or want to handle, pension fund investments have donated to board trustees who are also elected officers.
The state treasurer, the controller and the superintendent of public instruction, each of whom by virtue of the office sits as a CalSTRS trustee, all run for election or re-election statewide. That takes money. If they decide to run for higher statewide office, that takes even more money.
Both state Treasurer Phil Angelides and Controller Steve Westly decided to run for the Democratic nomination for governor this year. Both have taken big campaign donations from firms with contracts with CalSTRS. But absent news reports, who was to know? State campaign finance law on disclosure of such donations, CalSTRS' attorney says, exempts constitutional officers on the CalSTRS' board.
That's a setup for pay to play arrangements that offend ethicists and the next 10 people off any trolley. Fortunately, CalSTRS' trustees are moving to cap its contractors' campaign donations to any board member at $250. Because the governor appoints five board members, CalSTRS also will similarly cap its contractors' donations to the governor and gubernatorial candidates. Capping such donations, it hopes, will satisfy the courts' known opposition to an outright ban.
While CalSTRS, the nation's second-largest public pension fund, moves to halt this invitation to political back-scratching, the separate California Public Employees Retirement System, the nation's largest public pension fund with the same constitutional officers on its board, moves to hide it.
Earlier this year, CalPERS committed more than $23 million in pension funds to the venture capital firm International Technology University, then later reneged. Earlier this year, ITU officials and several firms it helped start up contributed to Westly's primary campaign. Now, CalPERS refuses to disclose documents about its dealings with ITU, documents that the Los Angeles Times says refer to campaign contributions.
CalPERS' rationale: State law prohibits disclosing confidential materials that firms such as ITU deem critical to their business.
Not so, says the legislator who wrote that confidentiality law. It is intended, he says, to prevent the disclosure of firms' trade secrets to their competitors.
He had better be right. Otherwise, state confidentiality law and state campaign finance law enable retirement system vendors to make hefty campaign contributions to retirement system board members without disclosure by either donors or donees. The Legislature can hang a for sale sign on the boardroom doors. Or it can make disclosure laws clearly apply everywhere they should.
sure, let the "little" and unimportant people fend for themselves.....