Calpers Board Member Settles Contribution Dispute

(Reuters) – A board member of Calpers, the California Public Employees’ Retirement System, has agreed to pay $12,500 to settle a campaign contribution dispute related to placement agents, an official with California’s political watchdog agency said on Monday.

The California Fair Political Practices Commission’s executive director, Roman Porter, said his agency has tentatively agreed to accept the payment by Charles Valdes, whose 2005 reelection campaign to the board of the biggest U.S. public pension fund, had exceeded political contribution limits.

The matter may be fully settled on Dec. 10 when the agency’s commissioners meet.

“He has agreed to pay that amount and we agreed to accept, pending approval of the commission,” Porter said.

Valdes was not immediately available for comment on the campaign contributions at issue.

They included backing by associates of former Calpers board member Alfred Villalobos, who has come under intense scrutiny for operating placement agency firms that have reaped more than $50 million in fees from investment companies for helping sell investments at the pension fund for California’s public-sector workers.

Valdes has served on the Calpers board since the mid-1980s. He was chairman of the fund’s investment committee at the time of the contributions from associates of Villalobos, who served on the Calpers board in the 1990s.

EYES ON PLACEMENT AGENTS

Villalobos has also raised eyebrows for hiring former Calpers Chief Executive Fred Buenrostro, who left the fund last year, and has helped to fuel a controversy at Calpers this year over placement agents.

In response, the fund’s board has supported new rules and legislation to better police the middlemen.

Calpers board President Rob Feckner is seeking to win support for additional measures to require the agents to be subject to rules for lobbyists.

Calpers is also surveying its external investment managers to learn to what extent they use placement agents and how much the middlemen earn in fees.

Some have called for a complete ban on placement agents, subjects of a lengthy pay-to-play probe at New York’s pension fund by New York Attorney General Andrew Cuomo.

In May, Cuomo won a guilty plea to securities fraud from a former associate of prominent Los Angeles placement agent firm Wetherly Capital Group that raised interest in deals it had helped sell at Calpers.

At the time, Cuomo said he was on the trail of a wide-ranging scandal: “This investigation has uncovered a matrix of corruption — which grows more expansive and interconnected by the day.”

Former Calpers board member Sean Harrigan became a casualty of the westward drift of Cuomo’s probe and the U.S. Securities and Exchange Commission was also delving into the business of placement agents.

Harrigan in May resigned as president of the board of the Los Angeles Fire and Police Pensions fund, citing the SEC looking into his having been a consultant for Wetherly, which was founded by Dan Weinstein, a prominent figure in Democratic politics in Los Angeles.

A spokesman for Wetherly has told Reuters the firm is cooperating with authorities, including California Attorney General Jerry Brown’s office. It also is looking into placement agents but will not discuss details.