CalPERS Mum on Investor Deals
In a move that could avert embarrassing disclosures about its influential board members, California’s state pension fund is invoking a recent law that allows it to keep most of its dealings with venture capital firms secret.
Officials of the California Public Employees’ Retirement System are citing the law in refusing to disclose several documents related to International Technology University. ITU’s principals and several start-up companies it fostered made contributions to the failed gubernatorial campaign of state Controller Steve Westly, a CalPERS board member.
The California pension fund earlier this year committed -- and later revoked -- almost $24 million to ITU, to be used as seed money for new companies. At least two documents being withheld, obtained by The Times from another state, refer to campaign contributions.
CalPERS is the nation’s largest public pension fund, with more than $207 billion in assets. But officials say that if they release such documents, other venture capital firms, accustomed to operating outside the public’s view, might decline to do business with California.
“In order to get the very best investments ... public pension funds are required to retain as confidential materials that the [firms] believe are critical to their business,” said CalPERS spokeswoman Pat Macht.
The author of the 2004 law, state Sen. Joe Simitian (D-Palo Alto), says it was never supposed to be used in such a way.
“I’m disappointed,” said Simitian, who explained that his measure (SB 439) was intended to protect venture capitalists doing business with the state from having to disclose trade secrets and other sensitive information to competitors.
“It was not designed to give [pension funds] carte blanche to withhold documents that might be embarrassing,” he said.
CalPERS has cited the Simitian statute in denying other recent Times’ requests for information related to venture capital firms and others doing business with the state agency.
Locking information away from the taxpaying public encourages trouble, especially in an era when venture capitalists get business with the help of politicians who solicit campaign cash from them, said Donald B. Trone, president of the nonprofit Foundation for Fiduciary Studies in Pittsburgh.
“It was never a good idea to pass these laws in the first place,” Trone said.
A law similar to California’s was passed in Colorado, another state where ITU did business with the public pension fund. Colorado officials also refused to disclose documents.
Former Colorado state Sen. Norma Anderson, whose 2004 legislation created her state’s law, said it was never intended to keep the public in the dark about potential misuse of state money.
“For them to hide information about political contributions -- I don’t think that’s allowed,” she said.
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dan.morain@latimes.com
