CalPERS trustee target of pay-to-play probe
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • Blackstone assets increase 6% for quarter, 8% for year
      Jeffrey Epstein and Leon Black
      Apollo Global CEO Leon Black to retire after Epstein review
      Coller Capital collects $9 billion with latest secondaries fund
      Directional signs respresenting types of traditional and alternative investments
      Setter: Alternative secondary deals drop 27.7% in 2020
    • Bill Foley
      Foley-backed SPAC agrees to $7.3 billion deal with Alight
      Jason Schwarz, chief operating officer of Wilshire,
      New owners have big plans for future of Wilshire
      Amy Hsiang
      Meketa picks new public markets manager research director
      Will Martindale
      Cardano Group chooses group head of sustainability
    • World economic growth ‘a race between a mutating virus and vaccinations’ – IMF
      Fred DeSerio
      Commentary: A new era for manager due diligence
      CalSTRS participant retirements jump in second half of 2020
      Steve Foresti
      Despite a truly frightening March, funds ended year in great shape
    • Signage outside the Blackstone Group Inc. headquarters in New York on July 13, 2019
      Blackstone to sell Alight to SPAC in $7.3 billion deal
      Jan Jacobson
      High-court ruling thwarts ERISA stock-drop lawsuits
      Joni Tibbetts
      Principal counts on advisers to get word out on PEPs
      Kenneth J. Munro III
      Empower names new national sales director
    • Indhira Arrington
      Ares Management adds chief diversity officer
      U.K. to require large plans to align climate-change reporting with task force standards
      BlackRock’s Fink urges others to join in net-zero commitment
      Global business leaders commit to stakeholder metrics
    • Ryan Tedder
      Strike up the band: KKR fund takes majority stake in Ryan Tedder catalog
      Helen Dean
      NEST’s Helen Dean earns U.K. recognition for service
      Hawk's Nest dam
      Brookfield donates golf course for firefighter training center
      Gifford Fong
      Old ties help bring local version of JOIM to mainland China
    • Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management, speaks during the Sohn Investment Conference in New York on May 6, 2019
      Citadel, Point72 back Melvin with $2.75 billion after losses
      Shanghai skyline
      Global hedge funds struggle even in a more open China market
      The Sun Hung Kai Properties Ltd. logo is displayed on the Sun Hung Kai Centre building in Hong Kong on Sept. 13, 2018
      SHK spins out East Point Asset Management
      Man holding a business card with Hedge Fund written on it
      Hedge funds chalk up decade’s best returns in 2020 – HFR
    • Blackstone assets increase 6% for quarter, 8% for year
      New Jersey discloses up to $475 million in commitments
      San Mateo fund revises asset allocation
      A case of Tootsie Roll Industries Inc. Pops Halloween candy is pictured before being distributed to stores at the Associated Wholesale Grocers distribution warehouse in Goodlettsville, Tenn., on Aug. 14, 2015
      Tootsie Roll gets the GameStop treatment
    • Technology Crossover Ventures raises $4 billion for latest fund
      The Bank underground station in the square mile financial district of the City of London
      U.K. seeks input on boosting its allure to money managers
      River and Mercantile chooses head of infrastructure
      Leon Black, chairman and chief executive officer of Apollo Global Management at the annual Milken Institute Global Conference in Beverly Hills, Calif., on April 27, 2015
      Black hangs on at Apollo as Epstein links cost him CEO role
    • New Jersey Division of Investment chooses deputy director
      San Mateo fund revises asset allocation
      Chicago Park Employees names new executive director
      Wisconsin state fund racks up 15.2% annual return
    • New Jersey Division of Investment chooses deputy director
      Chicago Park Employees names new executive director
      Credit Suisse brings on head of origination for direct lending
      Indhira Arrington
      Ares Management adds chief diversity officer
    • Pension funds continue private equity investing spree
      Big jump in private equity AUM expected over next 5 years
      Thoma Bravo takes in $22.8 billion for 3 funds
      Jason Thomas
      Data, technology become new prized possessions
    • Ingrid Jacobs
      Jones Lang LaSalle brings on head of diversity and inclusion
      EQT inks deal to buy real estate manager
      Chiang Ling Ng
      Hines hires first head of Asia-Pacific real estate investments
      Brand new apartment building on sunny day in spring with blooming trees
      Real estate returns forecast to trend lower – report
    • Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
      David Ireland
      Sponsors returning to questions about in-plan annuities
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
    • Retirement in emerging markets
      Outlook 2021
      The top 10 stories of 2020
      The best places to work in money management
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • New Jersey discloses up to $475 million in commitments
      Minnesota State Colleges seeks record keeper for 3 DC plans
      New York State Teachers assigns $375 million to 3 buyout funds
      GPIF hires Hamilton Lane for global private equity fund-of-funds allocation
    • New Jersey discloses up to $475 million in commitments
      Minnesota State Colleges seeks record keeper for 3 DC plans
      New York State Teachers assigns $375 million to 3 buyout funds
      GPIF hires Hamilton Lane for global private equity fund-of-funds allocation
    • Co-Administration, Financial Advisory, Transfer Agent, and Custodial Services
      Maryland State Retirement and Pension System
      Master Custodian and Related Services
      Transition Management Services
    • Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Infrastructure cartoon
      You must go big on infrastructure, Mr. President
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
      view gallery
      25 photos
      2020 in editorial Cartoons
      view gallery
      25 photos
      Cartoons depict a year like no other
    • GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
      Gold Outlook 2021
      Bond ETFs show maturity during Covid market mayhem
      2021 Outlook: A rousing recovery
    • Fred DeSerio
      Commentary: A new era for manager due diligence
      Charles E.F. MIllard
      Commentary: It’s time to make 401(k) plans into real pension plans
      Michael McNally
      Commentary: New ‘investment-plus’ test poses risks to private equity investors
      Adam Waterous
      Commentary: Institutions urged to act now on opportunities created by current global oil disruption
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • Sponsored Content By MassMutual
      Leveraging Data to Manage Risk
      Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
      Sponsored Content By Aberdeen Standard Investments
      Taking a passive approach to the hedge-fund universe
      Sponsored Content By World Gold Council
      Gold: the most effective commodity investment
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      1:33
      A look at hiring activity in 2020
      watch video
      1:24
      U.S. stocks were 2020’s comeback kid
      watch video
      1:23
      Outlook 2021
      watch video
      1:52
      Buy gold's pullback?
    • Getting Back to Normal: How to Creatively Manage Fixed Income Portfolios in a Rising Rate Environment
      Lessons From 2020: OCIO Model Passes Major Test of Governance
      The Institutionalization of Retail Part 3: Building a Successful Distribution Effort
      What might a Biden DOL and SEC mean for retirement plans?
    • POLL: The Biden administration’s economic plans
      POLL: Retirement issues in 2021
      POLL: Money managers' priority in Asia-Pacific region
      POLL: Retirement issues in the presidential election
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • By the Numbers for January 2021
      Riskwatch for Q4 2020
      Graphic: A look at hiring activity in 2020
      Taiwan Semiconductor’s No. 1 in the emerging markets book
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Getting Back to Normal: How to Creatively Manage Fixed Income Portfolios in a Rising Rate Environment
      Lessons From 2020: OCIO Model Passes Major Test of Governance
      The Institutionalization of Retail Part 3: Building a Successful Distribution Effort
      What might a Biden DOL and SEC mean for retirement plans?
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Print
September 07, 2009 01:00 AM

CalPERS trustee target of pay-to-play probe

Inquiry comes as state, SEC plan rules for placement agents

Arleen Jacobius
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Updated with correction

    The taint of pay to play has moved to the nation's largest pension fund.

    Charles Valdes, a longtime board member at the $194 billion California Public Employees' Retirement System, Sacramento, is under investigation by a state agency for taking campaign contributions from executives at a placement agent that works for CalPERS.

    The investigation by the Fair Political Practice Commission involves contributions made by officials at ARVCO Capital Research of Stateline, Nev., to Mr. Valdes' campaign to be re-elected to the CalPERS board in 2005.

    At the same time, a California bill that limits the use of placement agents was passed by the Senate and returned to the Assembly last week for its approval of Senate amendments. Once an agreement is reached, it will go to Gov. Arnold Schwarzenegger for his signature or veto.

    In addition, the U.S. Securities and Exchange Commission is creating a national version of placement agent regulations. Individual pension systems across the nation are also instituting their own placement rules, ranging from outright bans and stiff restrictions to disclosure requirements.

    The CalPERS investment committee at its Sept. 14 meeting will consider restricting campaign contributions and charitable contributions to system board members or individuals running for board positions, said Brad Pacheco, spokesman. The board is also expected to be asked for direction on how to respond to the SEC's proposed placement agent rules, he said. (Comments are due to the SEC by Oct. 6.)

    The investigation into Mr. Valdes' contributions was launched as a result of an audit of campaign finances for his December 2005 re-election, confirmed Roman Porter, executive director of the Fair Political Practice Commission.

    Mr. Valdes' re-election campaign accepted $38,600 in donations from ARVCO employees and Capital Formation Partners LLC, according to Mr. Valdes' campaign records obtained by Pensions & Investments. Alfred Villalobos, a former CalPERS board member, is chairman and senior managing director of both companies.

    Mr. Valdes could not be reached for comment. Mr. Villalobos did not return repeated phone calls by deadline. Billy Joe Hughes, Mr. Valdes' campaign manager, declined to comment.

    Neither Mr. Villalobos nor his firms has been charged with wrongdoing in any transaction.

    (Mr. Valdes' term expires in January and he is not seeking re-election, Mr. Pacheco said.)

    Among the donors listed in the campaign records are Carrissa Villalobos, ARVCO's general counsel and chief of real estate, and daughter of Mr. Villalobos; Dustin Fox, analyst at ARVCO; and Brian S. David, vice president at ARVCO. Mr. Villalobos did not contribute.

    ARVCO successfully secured $3.4 billion in commitments from the giant pension fund from 2006 through 2008; it could not be learned how much the firm was paid.

    Coincides with tenure

    The commitments to funds marketed by Mr. Villalobos and others at ARVCO coincide with Mr. Valdes' tenure as chairman of CalPERS' investment committee.

    ARVCO was the placement agent representing Apollo Global Management LLC in 2007 when CalPERS purchased a 10% stake in Apollo Global Management. Steven Anreder, Apollo spokesman, could not be reached by deadline.

    During the same three-year period, CalPERS committed $2.45 billion to three Apollo funds marketed by Mr. Villalobos' company: $1 billion to Apollo Investment Fund VII LP; $800 million to Apollo Special Opportunities Managed Account; and $650 million to Apollo Investment Fund VI.

    ARVCO also successfully placed $400 million in the Aurora Resurgence Fund with CalPERS.

    The state's Fair Political Practice Commission is required by law to audit the campaign accounts of board members and other politicians who raise more than $1,000 and are involved in a run-off election. Mr. Valdes, a CalPERS board member since 1984, was subject to the audit when he was in a runoff before winning re-election in 2005.

    Mr. Villalobos also figured in earlier placements with CalPERS. He marketed an investment in then-startup real estate firm CIM Group LLC in 2000. On Mr. Valdes' motion, the board approved a $125 million commitment to the firm's first fund, CIM California Urban Real Estate Fund, rejecting a staff proposal that the pension fund establish a $50 million separate account (P&I, Oct. 2, 2000).

    The board approved the commitment, 7-3, after Mr. Valdes had accused CalPERS staff of trying to block any investment with CIM, P&I reported. (Earlier in 2000, the board had rejected a motion by then-board member William Rosenberg to invest $250 million with CIM; the staff had not made a recommendation at that time.)

    One critic of the board says that part of the problem is the tenure of CalPERS trustees.

    CalPERS board members stay on the board for decades, said James McRitchie, publisher of corporate governance and PERSWatch, a CalPERS watchdog, websites. Mr. McRitchie unsuccessfully challenged Mr. Valdes to his board seat in the last election.

    “There is not much of a revolving door for (board members at CalPERS). Once they're on, it's a lifetime appointment,” Mr. McRitchie said.

    Incumbents can travel around the massive state at CalPERS' expense to tell constituents what the pension system is doing, but there is no forum for challengers, he said. The forum was held at the Dante Club in Sacramento.


    “I think they (board members) are usually conscientious. ... I just think people may get in with good intentions, but just like corporate boards, after 30 years you can no longer consider someone independent,” said Mr. McRitchie.

    Related Articles
    Charles Valdes, former CalPERS trustee, dead at 74
    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    Gender diversity is improving on FTSE 350 boards
    Gender diversity is improving on FTSE 350 boards
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Research for Institutional Money Management
    Sponsored Content: Research for Institutional Money Management
    sponsored
    Events
     
     
    Sponsored
    White Papers
    GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
    Gold Outlook 2021
    Bond ETFs show maturity during Covid market mayhem
    Global gold-backed ETFs: A popular gateway to the gold market
    2021 Outlook: A rousing recovery
    Climate change and emerging markets after Covid-19
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center