Sean Harrigan was effectively ousted today as president of the CalPERS Board of Administration. The California State Personnel Board voted 3-2 to replace Mr. Harrigan as its representative on the board of the $177.8 billion California Public Employees' Retirement System, Sacramento. Succeeding Mr. Harrigan, a labor leader with the United Food & Commercial Workers International Union, will be Ron Alvarado, a Republican who has served on the 13-member CalPERS board. His term on the board will start Jan. 1.
In a press briefing following the vote, Mr. Harrigan said Gov. Arnold Schwarzenegger, the state Republican Party and the U.S. Chamber of Commerce have been critical of his corporate governance efforts. "The governor has had influence on this process," he said. However, removing one person will not change CalPERS' efforts in reforming capital markets and the state's health-care system, Mr. Harrigan said.
Mr. Alvarado praised Mr. Harrigan's efforts but said his own agenda is solely to fulfill his fiduciary duty. "I have no agenda for labor or for management, but a commitment to balancing all valued interests towards the strong value of the CalPERS fund," he said.
Richard Holober, executive of the Consumer Federation of California, Millbrae, said Mr. Harrigan's removal is a victory for corporations and Wall Street. "We have a corporate crime wave under way in this country," he said.
David Hirschmann, senior vice president at the U.S. Chamber of Commerce, Washington, praised Mr. Harrigan's ouster. "Under Harrigan's chairmanship, CalPERS has been a glaring example of the way organized labor hijacks public pension boards to advance its own agenda at the expense of shareholders," he said.
Chamber officials charged the CalPERS portfolio has suffered because of "irresponsible investment decisions and inflated estimates on future returns by the CalPERS board itself."
"This is a good first step toward ensuring that California taxpayers will no longer be forced to pay the tab resulting from faulty investment and management decisions of their public pension fund," Mr. Hirschmann added.