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Wednesday, October 2, 2002
Willie Brown pursues CalPERS presidency
Board veteran, appointee also running
Greg Lucas, Sacramento Bureau Chief
©2002 San Francisco Chronicle.
Sacramento -- San Francisco Mayor Willie Brown wants to add another job to his resume: president of the board of the powerful California Public Employees Retirement System, whose $130 billion in assets make it the nation's largest pension fund.
If he convinces six of the other 12 board members to back him, Brown would be the first African American president of the CalPERS board, which has major leverage on Wall Street and throughout corporate America.
"I'm certainly looking at it," Brown said in an interview. "I represent as good a member as any to help the new members coming on next year."
Brown's move comes as CalPERS faces major changes. The stock market's fall has driven assets down from $171 billion in February 2000, when Brown was appointed by Gov. Gray Davis. Spiraling health care costs are pushing up the price of premiums for the system's 1.3 million members.
"It comes down to money. The cost of health care. The size of the portfolio.
The board's influence, obviously, is tied directly to how much money they have and who the president is definitely impacts that," said Tom Branan, publisher of the Public Retirement Journal.
By Brown's count, the relatively stable board will have four new members next year. Two of the departing members include the board's president and the chair of the powerful investment committee that decides where CalPERS places its assets.
The system's longtime executive officer and his top deputy have left. So has the board's general counsel.
"It's a lot of change to occur at a very challenging time," said Sean Harrigan, another Davis appointee to the board who wants to be president.
Six of the board's 13 members are elected by the groups served by CalPERS: state workers, nonteaching school employees and retirees, among others.
Those members appear united behind Bob Carlson, a 31-year veteran of the board and its vice president.
"Bob and I can both count, and it's fair to say we're actively campaigning for that position," Harrigan said.
About Brown running, Harrigan said, "I've heard the rumor, but you hear a lot of rumors about the mayor."
As vice president, Carlson becomes acting president when Bill Crist leaves the board in January. Election of a new president occurs at the board's February meeting.
"As long as I've been on the board, the custom is an elected member serves as president," said Carlson, who was elected by retirees to represent their interests.
Asked how he plans to outmaneuver Carlson and Harrigan to win the presidency, Brown answers with his usual confidence:
"I would hope to get every board member's vote."
The job of president is a time-consuming one. Crist's employer, California State University, is reimbursed by CalPERS for 90 percent of his salary.
There is one potential problem in Brown's plan. His term on the board expires Jan. 15, 2003, although he can continue to serve until Davis replaces him. Davis can also reappoint him.
"Can you imagine the governor appointing anyone else to this position?" Brown said.
Brown insists he will stay a member of the board until his mayoral term expires in January 2004.
That means, at best, he could only serve as president for one year.
"I'd love to help the new board get its sea legs, help those persons who will be there for the long term," Brown said. "They can select their long-term leader before I exit in 2004."
Brown said his desire to be president of the CalPERS board in no way changes his stated plan to run for John Burton's Senate seat in 2004 when Burton is forced out by term limits.
Although he still talks about running for the Senate, Brown has become increasingly tepid about the prospect. He has expressed interest in being the Bay Area's roving goodwill ambassador, if it succeeds in landing the Olympics in 2012.
He also has said he would enjoy serving as a University of California regent.
Ironically, Brown represents local government employees -- about one-third of CalPERS members -- but presides over a city that has its own retirement system. Only about 2,000 of the city's employees are members of CalPERS.
E-mail the writer at glucas@sfchronicle.com.
©2002 San Francisco Chronicle.