CalPERS board member should be fined, watchdog agency says
A longtime board member at the California Public Employees’ Retirement System, Charles Valdes, should be fined $12,500 for receiving five campaign contributions in excess of state limits, the state’s political watchdog agency recommended Monday.
The proposed fine is expected to be ratified next week by the five-member board of the Fair Political Practices Commission, which learned of the contributions almost three years ago but did not take action until recently.
Valdes was reelected by CalPERS members in 2005 to be an at-large board member.
Most of the $38,600 that Valdes received came from associates of Alfred J.R. Villalobos, including his daughter, Carrissa Villalobos. The controversial middleman and former CalPERS board member is under scrutiny for his role in helping investment managers win business from the country’s largest government pension fund.
According to CalPERS documents, Villalobos and his companies, Arvco Capital Research and Arvco Financial Ventures of Stateline, Nev., were paid more than $70 million in fees for brokering deals between CalPERS and the California State Teachers’ Retirement System with private equity and real estate investment managers.
Those outside mangers included Apollo Management of New York and CIM Group Inc. of Los Angeles.
Valdes, a retired Caltrans attorney who is stepping down from the CalPERS board in January after 25 years, did not return a call seeking comment. His former campaign treasurer, Billy J. Hughes of Sacramento, declined to comment.
Valdes won the Dec. 12, 2005, runoff election to represent CalPERS’ 1.6 million members as an at-large board member. However, Fair Political Practices Commission records show that none of the contributions were spent on reelection activities.
The commission learned of the excessive Valdes contributions from a February 2007 mandatory audit of campaign financial statements, commission Director Roman Porter said.
The subsequent investigation ended in October, when Valdes agreed to a settlement and the $12,500 fine, he said.
The case was slow in being resolved because of a backlog of continuing investigations, Porter said.
Valdes’ problem with campaign contributions is only one potential ethical lapse at CalPERS. He also was criticized for allowing Alfred Villalobos to pay for Valdes’ luxury trip to London, Dubai and Hong Kong in November 2006. Valdes did not report the trip as a gift on his 2006 government disclosure form, and CalPERS travel policy prohibits the acceptance of free travel.
Last month, Valdes produced a facsimile of a canceled check dated Dec. 1, 2006, and made out to Villalobos’ company for $23,630.90. The memo field on the check said “Reimbursement Dubai London.”
