Scathing report faults CalPERS, former chief executive on Villalobos payments
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.
The report, prepared for the California Public Employees' Retirement System by the Washington law firm Steptoe & Johnson, comes amid widening attacks on public employee pension funds in California, Wisconsin, Iowa and other states for providing overly generous benefits that cash-strapped governments can no longer afford.
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.
“Fixing California's pension problem is difficult enough without the stench of corruption and collusion that saps public confidence and gives taxpayers a reason to withhold support,” said Dan Pellissier, president of Californians for Pension Reform, a group that is pushing a ballot initiative that would diminish state employee pension benefits.
Shimada, Buenrostro, Valdes and Villalobos either declined to comment or did not return calls.
Read the full Times story here.
Read the full report here.
-- Marc Lifsher and Stuart Pfeifer