“California politicians and their cronies at CalPERS are just as bad as Bernie Madoff in violating their fiduciary responsibility – and now retirees and taxpayers face billions in financial losses.” – CA Asm. Carl DeMaio
CA State Assemblymember Carl DeMaio is slamming the board of the California Public Employees’ Retirement System (CalPERS) for “gross violations of their fiduciary responsibility” by investing pension funds in risky and dubious investments reflecting the far-Left “Green New Deal” ideology rather than what is best for retirees and taxpayers.
DeMaio is not just calling CalPERS out publicly – he has sent a letter to the US Department of Justice asking for an investigation into the fund’s mismanagement, including how the losses were reported, how investment decisions were made, and whether political considerations played a role.
DeMaio says CalPERS is hiding the true extent of losses from Green New Deal investments he labels as “scams.”
DeMaio points to CalPERS’ recent admission that it lost 71% of a $468 million investment made in 2007 through its “Clean Energy and Technology Fund.” CalPERS misleadingly claims a loss of more than $330 million of its initial capital investment – but fails to account for the actuarial losses associated with the decline in the investment value.
DeMaio says the true loss in this investment is now more than $3 billion!
“If CalPERS had simply invested this money in a basic S&P 500 index fund—with dividends reinvested —it would be worth more than $3.3 billion today,” DeMaio notes. Now taxpayers are on the hook to pay for all of that debt.
DeMaio also slammed CalPERS for paying investment managers more than $22 million in fees on the investment – fees paid even as the fund’s value plummeted.
CalPERS has repeatedly denied public records requests made by members of the media on the matter. State politicians passed a law exempting CalPERS from the state’s transparency laws on records.
DeMaio blasted CalPERS leadership for refusing to release full records, saying it raises serious concerns about political influence, conflicts of interest, and the lack of transparency within California’s pension system.
“If CalPERS were a private entity, people would be going to jail over this outrageous violation of fiduciary responsibility – but California politicians have passed laws allowing CalPERS leadership to get a pass,” DeMaio said.
“CalPERS can spin it however they want—the numbers don’t lie,” DeMaio said. “Taxpayers and public employees deserve to know how this happened, who’s responsible, and how much more of their money is at risk.”
“CalPERS’ job is to safeguard retirement funds—not gamble them away to score political points,” DeMaio concluded. “This is financial malpractice and a betrayal of public trust—and the public deserves to know exactly who made these reckless decisions.”