CA: Pension reform panelists' ties to firms questioned(benefit from firms that invest for CalPERS)

SFGate.com ^ | 3/8/07 | Greg Lucas

[NormsRevenge]

Sacramento -- Two appointees tapped by Gov. Arnold Schwarzenegger to study ways to rein in public pension costs receive income from firms that invest $750 million annually for the California Public Employees' Retirement System, business ties that some say could call the panel's independence into doubt.

Gerald Parsky, the former head of the state Republican Party, is a partner in a Los Angeles firm, Aurora Capital Partners, which invests $150 million for CalPERS. Schwarzenegger appointed him chairman of a 12-member commission responsible for recommending ways to overhaul public pension systems, ...

Commission member Matt Barger is a senior adviser at San Francisco-based Hellman & Friedman, which invests $600 million of the giant pension fund's $230 billion in assets.

--snip--

"I'm not sure the chairman of the commission should be someone who has business dealings to this extent, even though it's a minor part of CalPERS and his business," said Bob Stern, president of the Center for Governmental Studies in Los Angeles. "There are a lot of smart people in California who don't do business with CalPERS who could serve on this board."

Schwarzenegger administration officials and CalPERS -- the nation's largest institutional investor -- say there is no conflict between the two commission members' private business ties and their role on the commission, ...

"We would hope that this commission keep an absolutely open mind and understand their first obligation is to the taxpayers of California because they're the ones paying the bill," said Jon Coupal, president of the Howard Jarvis Taxpayers Association, ...

The administration said Parsky and Barger disclosed the business relationship between the public pension and Aurora Capital Partners and Hellman & Friedman prior to their appointments. Lawyers for the governor said that since the commission merely recommends rather than creates policy, no conflict exists.

[NormsRevenge]

Aurora ping

[calcowgirl]

Parsky said in an interview that the commission is not charged with examining the investment strategies of public pensions. Instead, its goal is to discover how much it will cost to pay for health care and other benefits to public sector retirees and then offer strategies to reduce any unfunded liabilities, which various estimates place between $40 billion and $70 billion

More likely, the goal is to create more smoke and mirrors in the never-ending shell game, while dropping a penny or two in their own pocket.