Posted on 03/14/2011 9:25:53 PM PDT by NormsRevenge
In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms.
A 17-month investigation also found that Federico Buenrostro Jr. -- along with former pension fund board members Charles Valdes and Kurato Shimada -- strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro.
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The findings of insider dealings at CalPERS could provide fresh ammunition to Republican lawmakers here who want Democratic Gov. Jerry Brown to convert traditional pensions with guaranteed payments for life into 401(k)-type retirement savings plans that rely heavily on employees' own contributions.
(Excerpt) Read more at latimes.com ...
Mistakes were made, too late to prosecute anyone, this is all in the past, we must do better, etc. and blah....
So what if there is “a scathing” report? Is anyone going to jail? Losing their job? Going to give the money back? No, No and No.
This is a huge example of Democrats corrupting government for their own gain, while using taxpayer monies redirected through these people to get reelected.
And it will be lost on the general public in the Japan Nuke Plant hysteria
SNIP.......it seemed the perfect fit: Bill Clinton, corporate reformer, signing on as a senior adviser (and "active adviser," according to a company press release) to the Yucaipa Corporate Initiatives Fund and the Yucaipa American Fund. Both get all their cash from pension funds from public-school teachers and government workers in California and New York state.
CALPERS, the huge California public-employee retirement fund, has agreed to commit $500 million to Yucaipa, and the California State Teachers Retirement System (CALSTRS) another $150 million. Millions more are to come from the New York State Common Retirement Fund.
Clinton's job, when he joined Yucaipa in April 2002, wasn't just to help make the rich richer: These were to be "investment funds that specialize in lower-income urban and rural communities," as The New York Times reported. Yucaipa managing partner Carlton Jenkins told Black Enterprise magazine that the funds were seeking out "urban-based minority or female-owned businesses."
And Clinton's role in the fund, Yucaipa head Ron Burkle made clear, would not be passive. "He's invaluable," said Burkle, explaining that Clinton would help raise money and offer investment advice to the funds. But a venture that was supposed to help minority businesses and secure the future of pensioners in two of America's biggest states seems to have done anything but.
The Yucaipa Corporate Initiatives Fund has already poured millions into Al Gore's new cable channel, Current Television. Gore's venture is headquartered in a tony neighborhood of San Francisco, which certainly doesn't seem to fit the definition of a "lower-income urban" community. Nor is it minority-owned — indeed, all the major investors are white males. (Indeed, by a who's who of major Democratic Party money people — including Joel Hyatt, former Democratic National Committee finance chairman, Rob Glaser of Realnetworks and Bill Joy of Sun Microsystems.)
Yucaipa told the San Francisco Weekly that Gore's enterprise "has a strong commitment to increase the representation of women and people of color." But the upper management of the network is completely white.
Indeed, one of the few significant minority-owned businesses that the funds have invested in is Sean John, the clothing enterprise run by that struggling representative of the "lower-income urban community," rap mogul Sean "Puffy" Combs. (A contributor to Hillary Clinton's campaigns with the potential of raising enormous sums for Democrats, Combs is likely to play a prominent role in supporting a Hillary run for the White House in '08.)
The funds' real emphasis, in short, seems to be Democratic cronyism. Another example: The Yucaipa Corporate Initiatives Fund recently backed up a bid by Diversified Investment Management Group to take over Piccadilly Restaurants. DIMG is described by Fashion Week Daily "as a front for Ron Burkle," close friend and financial supporter of Bill and Hillary Clinton. He's also the chairman of Yucaipa.
Some of the pension money committed to the Yucaipa funds arrived with curious timing. Carl McCall, then the comptroller of New York and thus the sole trustee of the New York State Common Retirement Fund, began the ball rolling with the Yucaipa Corporate Initiatives Fund just as Sen. Hillary Clinton surprised many Democrats everywhere by endorsing his bid for governor — at a time when his chief opponent in the primary was Andrew Cuomo, who had served President Bill Clinton loyally as secretary of Housing and Urban Development.
The hundreds of millions flowing from California retirement funds come courtesy of California Treasurer Phil Angelides, a longtime Clinton political ally. Now running for governor, his bio mentions his important role (as state California Democratic Party chairman) in electing Bill Clinton to the presidency. The banner photo across his Web site features him standing side-by-side with the ex-president.
Yet, while all the players in the Yucaipa funds are Democrats, they seem a bit confused about their social mission. When Clinton joined up, The Yucaipa American Fund proudly announced that its purpose was to invest in "industries and companies that maintain strong corporate governance practices and are sensitive to the interests of their employees."
Tell that to the employees of Aloha Airlines. The fund is backing a $100 million deal to take over the airline — but it has attached some very tight strings: It's making the deal contingent upon terminating the pilots' pension plan and contract. Yet the federal Pension Benefit Guaranty Corp. says the pension plan is not the problem; the airline can readily afford it. Pilots responded with a strike. (Just to round things out, the two major shareholders in the airline, Hawaii's Ching and Ing families, give overwhelmingly to Democrats.)
Meanwhile, the workers whose pensions have been invested in Yucaipa are getting a terrible deal. According to CALSTARS, California teachers have already committed $61.9 million of the $150 million that they promised Yucaipa. As of last March 31, three years after the venture started, they'd seen a grand total of $837 come back to them. Overall, the rate of return since the funds launched have been a loss of 12.1 percent.
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Calpers failed to disclose:
(1) the state budget was on the hook for shortfalls should actual investment returns fall short of assumed investment returns,
(2) those assumed investment returns implicitly projected the Dow Jones would reach roughly 25,000 by 2009 and 28,000,000 by 2099, unrealistic to say the least
(3) shortfalls could turn out to be hundreds of billions of dollars,
(4) Calpers's own employees would benefit from the pension increases, and,
(5) members of Calpers's board had received contributions from the public employee unions who would benefit from the legislation.
Had such a flagrant case of non-disclosure occurred in the private sector, even a sleepy SEC and US Attorney would have noticed. You said just what I was going to say. Sure, Calpers "did not disclose." But 99% of the California legislature sat on their hands and were willing participants in this fraud.
If a huge bill, with a huge price tag, with a huge financial obligation that extends way into the future, gets passed without more than one legislator raising one question about it, what in Hell's Bells are these people being paid to do?
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