CalPERS CEO: “The Companies We Invest In Have to Be Sustainable”


CalPERS CEO Anne Stausboll sat down with the Financial Times for an extensive interview last week.

She talked about her push to make CalPERS an agent of change on social and environmental issues, including the use of shareholder power to engage with companies about sustainable business practices.

Here’s that excerpt, from the Financial Times:

Where Ms Stausboll is most passionate about the power of Calpers to make a difference is in the social and environmental sphere. A vegetarian on moral grounds since her university days, she began her career as a lawyer fighting for equal pay for female workers. On her way to the top she has moved back and forth between Calpers and Californian government, working as deputy to the state treasurer, Phil Angelides, at the turn of the century, when he was pushing for US public pension funds to use their power as shareholders to encourage greener business practices.

Today, Calpers is urging corporations to assess the risks that climate change pose to their businesses; it will be putting motions to shareholder meetings demanding as much. The idea is these shareholder resolutions will be a not-so-subtle nudge to executives to push for more environmentally friendly practices, not just at oil and gas companies but in the insurance sector, in agriculture and across corporate America.

“Our portfolio has to be sustainable for decades and generations, and . . . to make the portfolio sustainable, the companies we invest in have to be sustainable,” she says.

The interview also covers CalPERS’ push for corporate board diversity, the fund’s corruption scandal and its quest to reduce investment expenses.

Read the full interview here.


Photo by  rocor via Flickr CC License

CalPERS Board President Feckner Re-Elected to 11th Term

board room chair

The president of CalPERS’ board of administration, Rob Feckner, has been reelected to his 11th term. The term is one year long.

The board held the vote on Tuesday.

Feckner has sat on the board since 1999.

More from the LA Times:

During his long tenure, Feckner has steered CalPERS away from sometimes strident, anti-corporate activism; backed a campaign that successfully defeated a 2005 initiative that would have reduced some pension benefits; and helped the nearly $300-billion fund recover billions of dollars in losses from the recession of 2008-09 and its aftermath.

He also worked to clean house and overhaul policies in the wake of a 2009 bribery and corruption scandal that resulted in federal criminal charges being filed against two former CalPERS officials, a board member and chief executive.

“In the past few years, we have many accomplishments to be proud of,” Feckner said in a statement released by CalPERS, “but there’s still much more to do to ensure we provide secure retirement and health benefits to California’s hard-working public employees.”

Among those challenges is a potential 2016 proposed ballot measure that would allow cities and local governments to cut pension benefits for current employees. The board is expected to oppose such a measure.

Another development from Tuesday’s meeting: the board elected Henry Jones to the vice president position. He is replacing Priya Mathur, who was stripped of that position after repeated violations of financial reporting laws.

Detroit Pension Fund Fires Top Lawyer


Detroit’s Police and Fire pension fund fired its general counsel, Joseph Turner, on Thursday.

Reports had surfaced weeks ago that trustees were uncomfortable with having Turner on staff because he was with the fund when it was embroiled in corruption scandals.

Trustees reportedly wanted a clean break from the pension fund’s past mismanagement.

From Detroit News:

The 9-7 vote to fire general counsel Joseph Turner and his law firm, Clark Hill, comes three weeks after The News exclusively reported that some members of the pension fund had lost confidence in Turner. His continued involvement in the pension board raised questions about the city’s ability to move past a history of corruption, mismanagement and bad investments that helped push Detroit into bankruptcy, critics said.

“I respect their decision,” Turner said after the meeting. “I don’t agree with it, but I respect it.”

Clark Hill will continue to represent the pension fund in matters related to the city’s bankruptcy case, and some ongoing lawsuits, pension fund spokesman Bruce Babiarz said.

The board will seek a replacement in coming months.

Turner admitted in court that years ago, he gave previous trustees large amounts of cash as “birthday presents”. Those same trustees later voted to give Turner a raise.


Photo credit: “DavidStottsitsamongDetroittowers” by Mikerussell – Own work. Licensed under Creative Commons Attribution-Share Alike 3.0 via Wikimedia Commons

Probe of Petrobras Turns to Pension Fund


An investigation into corruption at Petrobras, Brazil’s state-run oil company, has taken a new turn: investigators are now looking into the company’s pension fund, although details are unknown.

From Reuters:

Brazil’s state-run oil company Petrobras on Monday said a growing corruption scandal may implicate its employee pension fund and has led to a freeze on payments to 23 contractors allegedly involved in the scheme.

Petros, the 66 billion real ($24 billion) employee-pension fund of Petroleo Brasileiro SA, as Petrobras is formally known, was singled out by an internal investigation, Petrobras said in a statement.

The law firms that are conducting the internal investigation “have found possible links to the facts that have been investigated” regarding the pension fund, according to the statement.

It did not give details of any possible links.

The investigation was launched after Brazilian prosecutors alleged that Petrobras executives conspired with construction companies to inflate the cost of contracts and then kick back proceeds to executives, politicians and political parties as bribes and campaign contributions.

Last month, Petrobras was fined by Brazil’s security regulator for violating rules regarding the election of board members of Brazilian companies in which the pension fund is invested.

Detroit Pension Chair Calls for Firing of Lawyer Employed During Bribery Scandal


The Chairman of the Detroit Police & Fire pension fund is calling for the termination of the fund’s general counsel. That’s because the lawyer was employed at the fund during the bribery and pay-to-play scandal that cost the fund millions.

The general counsel, Joseph Turner, was not charged with any crimes. But the trustees have said publicly that they don’t trust him and want a clean break from the years of bribery that have plagued the fund.

From the Detroit News:

A powerful lawyer who factored into the Detroit pension fund bribery scandal and continues to wield influence over the Police & Fire retirement system could soon be out of a job.

Critics of the retirement system’s general counsel, Joseph Turner, say his continued involvement in the pension board raises questions about the city’s ability to move past a history of corruption, mismanagement and bad investments that helped push Detroit into bankruptcy.

Detroit Police & Fire pension fund Chairman Mark Diaz said he is prepared to ask board members to fire Turner and his law firm Clark Hill PLC, now that a corruption trial has ended in six convictions and Detroit has emerged from bankruptcy.

The pension board’s next meeting is Thursday.

Here’s what trustees have said of Turner, from Detroit News:

“Very simply: we don’t have confidence in him,” [Chairman] Diaz told The News Wednesday. “This is a multi-billion-dollar corporation and we cannot have the air of impropriety whatsoever.”

Fellow Trustee Georze Orzech was blunt when asked about Turner.

“He’s got to go,” Orzech said. “I don’t trust him.”

According to Detroit News, in 2007 Turner gave thousands of dollars of “birthday money” to various trustees. Soon after, the trustees voted to raise Turner’s pay from $225 to $300 an hour.


Photo credit: “DavidStottsitsamongDetroittowers” by Mikerussell – Own work. Licensed under Creative Commons Attribution-Share Alike 3.0 via Wikimedia Commons

Auditor Asks Questions About $200 Million of Missing Money From UN Pension Fund For Afghanistan Police

United Nations

According to U.S. auditors, more than $200 million is “missing” from the United Nations’ Afghanistan Law and Order Trust Fund (LOFTA), a fund used to pay the salaries and pensions of the Afghanistan police force.

The Special Inspector General for Afghanistan Reconstruction authored a letter, released Monday, questioning whether the fund’s money was the subject of widespread “fraud”. From the Fiscal Times:

U.S. auditors are once again sounding the alarm on the UN Development Program for not being able to account for more than $200 million from the Afghanistan Law and Order Trust Fund known as LOFTA.

In a new letter released Monday, Special Inspector General for Afghanistan Reconstruction John Sopko warns Pentagon officials of the growing concerns of fraud and abuse within the program.

Sopko’s letter paints a disturbing picture of hundreds of millions of dollars going out the door—paying for inflated police salaries, potential “ghost employees” and questionable “deductions” to the Afghan Ministry of Interior.

The IG said he had requested the UN agency describe “how it has accounted for up to $200 million in “deductions” that the Afghan Ministry of Interior may have taken from the salaries” of police employees who are paid with the LOFTA funds.

The agency, however, could not answer Sopko’s question.

In another instance, a previous probe identified more than 4,579 improper payroll payments from the fund made between December of 2012 and 2013—totaling approximately $40 million.

Last year, the Defense Department’s Inspector General found that the Afghan Ministry of Interior “could not account for $17.4 million in pension withholdings and $9.9 million in cooperative fund withholdings” according to SIGAR.

The U.S. is particularly concerned because it contributed much of the money that is disappearing. From MSNBC:

The U.S. and other nations have donated more than $3 billion to the Law and Order Trust Fund for Afghanistan, the fund that pays the nation’s police force. Helen Clark, the UNDP administrator, has argued that it is not the agency’s job to conduct oversight of some of the programs administered through the trust fund.

The ANP has struggled to battle corruption in its ranks, and for several months last winter, officers were not paid due to what Afghan officials told The New York Times was simply an administrative issue.

The latest move by the Inspector General to get information about how reconstruction money is being spent shows again how much money has disappeared over the 13 years of war and attempts at reconstruction. Last month, another SIGAR inquiry looked at $6.5 million wasted on constructing communications towers despite ample evidence that the towers were a bad idea.

Click here to read the entire letter from the Special Inspector General.