The news that the alleged geniuses who run CalPERS had a poor investment record in 2011 drew a strikingly tone-deaf response from master Dem spinner Steve Maviglio, who Tweeted, “@CalPERS +1.1% in 2011. How’d your 40lk (or should I say, 201k) do (minus expenses to Wall St.)?” Boy, Steve, in an era where local govs across the state are threatened by insolvency because of pension costs, that’s really reassuring. Maviglio is playing with fire here — because the more one looks at CalPERS, the more it looks like a corrupt institution. No, I’m not talking about the fact that it’s now involved in a pay-to-play corruption scandal involving former top executives. I’m talking about how whether returns are good or bad, CalPERS showers its workers with bonuses — self-dealing of the most obvious sort. If this is legal, it shouldn’t be.
This is from an AP report in September 2010:
As its investment portfolio was losing nearly a quarter of its value, the country’s largest public pension fund doled out six-figure bonuses and substantial raises to its top employees, an analysis by The Associated Press has found. …
CalPERS’ plunging value came as stock values tumbled around the world, the state’s economy suffered its worst decline in decades and basic state services faced severe budget cuts.
Virtually all of CalPERS’ investment managers were awarded bonuses of more than $10,000 each, with several earning bonuses of more than $100,000 during the 2008-09 fiscal year. The cash awards were distributed as the fund lost $59 billion. …
Bonuses also were paid to employees who are not part of the fund’s investment team, including a public affairs officer who received bonuses of nearly $19,000 a year two years in a row and a human resources executive who received bonuses topping $16,000 both years.
The number of CalPERS executives making $200,000 a year or more rose from 13 to 15 over the two-year period. Those employees received an average salary raise of 12 percent and an average bonus of $115,705 in the 2007-08 fiscal year and $63,311 in 2008-09, according to the AP’s inquiry into CalPERS compensation.
So if the bonuses flowed when CalPERS lost $59 billion — a flack even got a $19k gift! — who knows how much CalPERS will give away when it made 1.1 percent in 2010?
Remember, the people who come up with these pay policies are those who benefit from them. This is obscene. This is CalPERS. This is California.
I’m sure Maviglio will send out indignant Tweets about this sad state of affairs.