STUMP » Articles » Around the Pension-o-Sphere: FBI, California, Kentucky, and New Jersey » 16 March 2018, 07:17

Where Stu & MP spout off about everything.

Around the Pension-o-Sphere: FBI, California, Kentucky, and New Jersey  


16 March 2018, 07:17

Before I start, two of my news feeds failed to send me updates yesterday.



Ok, maybe not. Every so often, I don’t get an update because of a system reset/maintenance. I’m annoyed, though.


I really don’t want to get into the details why FBI guy Andrew McCabe is likely to get fired… the question now is when, and that question needs to be resolved rapidly.

Sessions may fire top FBI official Andrew McCabe before pension eligibility

WASHINGTON — The FBI’s Office of Professional Responsibility has recommended the firing of former FBI Deputy Director Andrew McCabe, who remains on the payroll — a move that could put his pension at risk, according to officials familiar with the process.

It is now up to Attorney General Jeff Sessions whether to reverse that recommendation or to accept it.

The OPR recommendation that McCabe be thrown off the payroll follows an internal report from the DOJ inspector general that concluded he was not fully forthcoming in answers about whether he talked to a reporter concerning the FBI’s investigation into the Clinton Foundation. The IG report has not been made public, but may be released soon.

McCabe, who has been with the FBI since 1996, is a civil service employee who can’t be fired without evidence of wrongdoing.

When it became public in January the McCabe had decided to step aside, FBI Director Chris Wray made it clear in a message to all bureau employees at that time that his departure was tied to the inspector general report.

I guess we’ll find out later today.

More on the issue:


First, from Yves Smith: What Is CalPERS Trying to Hide? Plans to Eliminate Transcription of Board Meetings, A Giant Step Backwards in Transparency and Accountability

CalPERS staff seems to relish poking its beneficiaries and the public in the eye. As an image at the end of this post shows, CalPERS is making a great pretense of being a supporter of Sunshine Week, “A week dedicated to promoting transparent and open government.”

Yet as always, CalPERS actions make clear what its real priorities are.

This very same “Sunshine” week, CalPERS published two board agenda items that show the giant pension fund is going hard in reverse on transparency and accountability.

We have embedded the two relevant documents at the end of this post. One is a plan to get rid of transcription of board meetings, including closed session transcripts. We’ve embedded text of the agenda item at the end of the post; you can also view it here. The second is to implement a timed agenda for conducting board meetings.

Let us stress that there is no good reason for CalPERS to be adopting either measure.

Message of Getting Rid of Transcripts: CalPERS Has Something to Hide

Let us stress there is no good reason for CalPERS to end its decades-long policy of having its board meetings transcribed by court reporters. That was one of many practices that gave CalPERS credibility around the world as a well-managed institution and was a powerful card in its corporate activism efforts (yes, it is now very hard to believe that CalPERS was once esteemed as a model of good governance).

As David Snyder of the First Amendment Coalition stressed, the $80,000 to $85,000 cost is inconsequential for an institution the size of CalPERS, with an operating budget of $1,675,851,000 for the current fiscal year and even more so in light of its importance as a governance mechanism.

And even though the board agenda item claims that CalPERS needs to engage in belt-tightening, internal sources tell me that there has been no move to crack down on abuses, like the widespread use of business class travel,1 or the failure to challenge the necessity of going to conferences, particularly ones that look like junkets by virtue of being overseas yet having little or no unique content.

Yeah, the cost aspect of transcription is bullshit.

Here are some of the bad reasons for CalPERS to be eliminating transcripts:

Damages CalPERS’ credibility in its Environmental, Social Responsibility, and Governance initiatives. CalPERS is trying to bolster its flagging reputation by being a prominent player in ESG. For instance, at Monday’s Investment Committee meeting, Treasurer and gubernatorial candidate John Chiang has organized a presentation by students calling for investors to divest their holdings in retailers that sell guns and other participants in the supply chain (CalPERS has already divested from gun manufacturers)

It is hard to take CalPERS’ efforts to exhort companies to do better seriously when it is visibly renouncing good governance practices. This looks like rank hypocrisy.

Weakens board oversight. CalPERS already has too little in the way of adult supervision. This move would take CalPERS further in that bad direction.

General counsel Matt Jacobs claims in his agenda item that the transcripts were, according to him, not used much by staff and board members. That is contrary to the observation of former CalPERS insiders, who say that staff used closed session transcripts in preparing for meetings.

Finally, the agenda item makes it seem as if the only aspect worth considering is the impact of ending transcription of open board meetings . It finesses the fact that the transcripts of closed session will also be scrapped. These are even more important than open session records in terms of enabling board members to hold staff accountable, since the most sensitive issues are relegated to closed session.

The fact that staff now actively impedes board member access to closed session records should serve as a huge red flag, as well as proof that the real motivation for this change is to stymie board oversight. New board member Margaret Brown realized in her first closed session meeting that there was so much back story to a critical pending decision, that of outsourcing private equity, that she asked to read closed session transcripts for the last year. She ran into numerous obstacles, including:

Being told she needed to be briefed by CalPERS staff members before being allowed to see the transcripts (that briefing never happened, suggesting it was a delaying tactic)

Being allowed to read only a paper copy that was redacted to show only the discussion directly related to the private equity initiative. The fact that she was not immediately given an electronic copy so she could read it when it was convenient for her, as well as search it, makes it abundantly clear that staff thinks it is in charge and can bully board members. The staff is supposed to report to the board, not the other way around. Moreover, Brown said she wanted to read the entire past year of board closed session transcripts to get up to speed on other topics, but the response to this request makes clear that CalPERS is determined to keep board members as much in the dark as possible.

Being treated like a child or a criminal by being required to read the limited records only in a staff member’s office with the staff member in the room supervising her

I am told that Brown is not the only current board member who has been given a hard time about getting closed session transcripts.
Impedes journalists and activists. CalPERS is already receiving largely negative coverage in the press, even from the typically friendly trade press. This move is going to further alienate journalists. Even if they never made use of CalPERS transcripts, they would want to have that option. And they are sensitive enough to institutional behavior

Anyway, again, any cost excuse is bullshit.

I’ve run into this sort of shenanigans before in other orgs…such as, oh, actuarial orgs. But that’s for another time. Maybe.

More California pension stories:

About that court case on the “California Rule”: I’ve been watching whatever goes by, but as Ed Mandel reports, it’s not going all that rapidly.

California shouldn’t expect the courts to save them, though.


Yes, I gave Kentucky its very own post only a couple days ago. I’ve got more crap.

Let’s kick it off with this: Governor Bevin says protesting teachers are “throwing a temper tantrum”


Seriously? I assume he just wants to torpedo his bill, then.

Governor Bevin didn’t hold anything back while speaking about teachers protesting Senate Bill 1.

Bevin was on Campbellsville radio station WVLC Wednesday afternoon, where he said teachers protesting the controversial pension reform was “bizarre,” and compared their protests to protesting food rations during World War II.

“It would be like people having mass demonstrations about, ‘no I want my butter, I want my sugar, I’m going to keep all my steel and my rubber and my copper, and to heck with the rest of you people, you better keep giving me mine.’ That’s what it is, it’s the most remarkable commentary about who we are in modern times,” he said.

The governor went on to say teachers in Kentucky are the only workers who receive pay raises after they retire. Bevin was referring to the Cost of Living Adjustments that teachers receive as part of their pension benefits. Currently, teachers receive a 1.5 percent COLA increase each year, Senate Bill 1 would have cut that to 1 percent until the Teachers’ Retirement System was 90 percent funded. Bevin told WVLC teachers in Kentucky are paid higher than surrounding states.

“It’s about straight up just wanting more than your fair share,” he said. “You hear constantly about how underpaid people are, the average teacher in Kentucky makes more than the average teacher in Tennessee, makes more money than the average teachers in Virginia, makes more money than the average teacher in West Virginia, makes more money than the average teacher in Missouri, makes more money than the average teacher in Indiana, pick another state we border. The reality is this is a group of people that are throwing a temper tantrum.”



Bevin, you are a disgrace.

I really don’t see anything passing this time, just like last time. They never fixed the problems of the last bill, and they definitely didn’t get political buy-in.

It’s not even a good try. Thhhhbt.


Hey, they gotta be best at something. I guess.

From John Bury:
Murphy on NJ Pensions

Taking over the governorship of the state with the worst-funded pension system in the nation Phil Murphy invested almost a full minute-and-a-half on the issue in his first budget address:

[video at link]

Where can we expect the New Jersey Retirement System to end up with this policy of benign neglect?

Puerto Rico.

Bury links to this item on PR pensions. They’re pay-as-they-go, btw.

Yeah, I’ve had it. See you later.


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