The directive from Anne Stausboll at the nation’s largest public pension fund, follows a Los Angeles Times news account of court testimony from a senior portfolio manager that CalPERS had formerly allowed its top investment staff to accept paid trips from financial services firms with whom they were doing business without proper disclosures.
In a statement issued late Thursday, Stausboll said the new record review she had ordered included a mandate to immediately remedy any problems discovered with travel or gifts accepted from CalPERS business partners.
Stausboll pointed out that CalPERS changed its travel policy for investment staff in April 2008 to require that no outside investment manager may arrange for CalPERS staff trips when staff travel is related to investments. Under the 2008 policy, CalPERS must arrange hotel and transportation and then bill the external manager for expense repayment.
A year later, Stausboll put in place a second mandate that bans staff who fall under the California Fair Political Practices Commission requirements from accepting gifts from contractors or prospective contractors.
“As CEO, my expectations of ethics, transparency and accountability are very clear,” Stausboll said in the statement. “As an organization we will take all the necessary steps to correct any improprieties, so that we are always acting in the best interests of our members and employers.”
According to the Los Angeles Times report, senior portfolio manager Joncarlo Mark testified in U.S. Bankruptcy Court proceedings in connection with efforts by former CalPERS board member Alfred Villalobos to overturn an asset freeze put in place by the state Attorney General’s office. Prosecutors alleged Villalobos committed fraud by illegally earning millions of dollars from his connections while at the pension system.
The Times said Villalobos’s lawyers cited Mark’s deposition to support their argument that the fraud charges are a sham because CalPERS did not have any rules restricting outside commission payments or the receipt of gifts.
Mark testified that he had taken 10 or 12 private jet trips paid for by firms doing business with CalPERS to locations including Shanghai, Mumbai and New York. Financial firms paid for dozens more such trips for him on commercial airlines, he said, often in first or business class, the Times reported.