CalPERS Looks to Restrict Gifts to Trustees

October 18, 2006 ( - Trustees of the California Public Employees' Retirement System (CalPERS) said they will work on a proposal to place restrictions on gifts and campaign contributions from money managers.

The Sacramento Bee reports that the board plans to look at regulations proposed this month by the California State Teachers’ Retirement System (CalSTRS), and possibly mimic some of CalSTRS’ rules. The CalSTRS board proposed regulations to limit campaign contributions to $250 and gifts to $50 for trustees, the governor and gubernatorial candidates. It also wants to develop reporting standards and sanctions on firms that violate the rules, according to the Bee.

Concerns of pay-to-play practices and controversy the two systems have faced for receiving campaign donations from money managers or firms pursuing contracts with the pension systems led to earlier efforts to place restrictions on gifts. However, courts have shied away from enforcing restrictions, concerned over political free speech rights, the Bee said.

CalPERS banned gifts and contributions in 1998 after former state Treasurer Matt Fong and former Controller Kathleen Connell received more than $500,000 in contributions from pension fund money managers. The treasurer and controller are trustees at CalPERS and CalSTRS. Connell challenged the ban in court and won.

CalPERS had planned to look to regulations proposed by the Securities and Exchange Commission in 1999, but the regulations faced fierce opposition and were never adopted. Campaign contributions and gifts to members of the CalPERS board are now governed by the state campaign finance laws.

The CalPERS board has no specific timeline for drawing up the ethics and conflict-of-interest standards proposal.