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Ongoing CalPERS Scandals Make It Tougher for UC

Byuclafaculty

UC’s pension plan has nothing to do with CalPERS. But CalPERS has had a series of scandals involving conflict of interest, bribery, and bad investments that tend to tar all public pensions in California including ours. CalPERS’ ongoing problems will complicate UC’s efforts to resolve its own pension unfunded liability. Continued unraveling of CalPERS scandals increases the chances that UC will be dragged into some statewide reform for all public pensions. The latest CalPERS scandal is reported today:

CalPERS investment officer linked to bribery scandal resigns

Thursday, Aug. 26, 2010, Sacramento Bee (Excerpt)

A senior CalPERS investment officer resigned today after being linked to the pension fund’s bribery scandal, The Bee has learned.

Leon Shahinian has been on paid administrative leave since May, when his name surfaced in Attorney General Jerry Brown’s lawsuit against former CalPERS board member Alfred Villalobos and former Chief Executive Fred Buenrostro. Although Shahinian isn’t a defendant, the lawsuit said Villalobos bribed Shahinian with an all-expenses-paid junket to New York in 2007.

Weeks later, without disclosing the trip, Shahinian persuaded CalPERS to invest $600 million with one of Villalobos’ clients, Apollo Global Management. The deal generated a $13 million commission for Villalobos.

Shahinian’s resignation was confirmed by Sacramento lawyer Malcolm Segal, who represented Shahinian when he testified last month in connection with Villalobos’ bankruptcy case.

The full article is at http://www.sacbee.com/2010/08/26/2985696/calpers-investment-officer-linked.html

UPDATE: More scandal at http://www.sacbee.com/2010/08/31/2994102/former-calpers-board-member-refuses.html

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