California’s political watchdog agency has opened an investigation into gifts to state pension officials from private equity fund managers.
The state’s Fair Political Practices Commission is conducting the investigation, made public Monday, that focuses on executives at the California Public Employees’ Retirement System.
Last week CalPERS Chief Executive Anne Stausboll told administrators at the pension fund that some senior executives may have failed to report gifts properly on annual statements of economic interest filed with the state.
The list of 49 CalPERS officials and former officials being investigated includes four of the fund’s 13 board members: President Rob Feckner, Vice President George Diehr, Louis F. Moret and J.J. Jelincic.
Also on the list are Chief Investment Officer Joseph Dear, former Chief Executive Fred Buenrostro, senior investment officers Curtis Ishii and Forouk Majeed, and former senior investment officers Christy Wood and Joncarlo Mark.
Gifts, including gourmet meals, private jet travel and bottles of wine, were commonplace before allegations of influence peddling and corruption emerged during a scandal that gripped the $237-billion CalPERS beginning in fall 2009.
Since then, the fund adopted regulations that provide for full reporting of economic interests and a ban on gifts to staff. The fund also backed proposed legislation that would prohibit all gifts to public officials, including CalPERS board members.
The investigation was first reported Sunday by Private Equity Hub, a financial news blog.
Gift reporting infractions could result in punishments ranging from warning letters to fines of $5,000 per incident. By law, state government employees must report all gifts from a single source worth more than a combined $50. Gifts with a total value of $420 from one source cannot be accepted.
One of those being investigated, Buenrostro, is the defendant in fraud lawsuit filed by the California attorney general’s office that alleges that he took a number of gifts, including a Lake Tahoe condominium and a round-the-world trip, from a co-defendant, former board member Alfred J.R. Villalobos.
Villalobos allegedly used his influence with the CalPERS board to receive more than $40 million in fees for helping put together investment deals between the fund and private equity managers.