Updated with correction.
A state watchdog launched an investigation into two complaints filed against former CalPERS CIO Yu "Ben" Meng claiming he failed to properly disclose certain personal investments and sales of stocks and other holdings.
In a letter released Monday to Mr. Meng's attorney, Jennie Unger Skelton, partner at law firm Politicom Law, the enforcement division of California's Fair Political Practices Commission said it will investigate the allegations made in the complaints. The firm represents placement agents on state registration and reporting requirements for marketing investments to the $411.4 billion California Public Employees Retirement System, Sacramento, and the $246 billion California State Teachers Retirement System, West Sacramento.
“We are committed to strong compliance protocols,” said Marcie Frost, CalPERS CEO, in a written statement.“ At next month’s meeting (Sept. 16), we will bring to the board specific policy options for their considerations.”
The investigation is the first hurdle in the process in which the enforcement division decides whether to open an investigation or dismiss the complaints. The average case takes about 105 days, FPPC spokesman Jay Wierenga said.
Neither Mr. Meng nor Ms. Skelton could be immediately reached for comment.
The FPPC enforcement division's Aug. 11 letter came to light on the same day that CalPERS held an emergency meeting following Mr. Meng's sudden Aug. 5 departure.
During a brief open session, California Controller and CalPERS board member Betty T. Yee noted that the meeting, the bulk of which was to be in closed session, did not address her concerns. The day after Mr. Meng quit, Ms. Yee had asked for an emergency meeting to discuss the situation, review its conflict of interest policies, "the CEO's (Marcie Frost) oversight and implementation of these policies, and any additional safeguards necessary to ensure this does not happen again."
She asked that the board schedule a meeting to discuss the matter "hopefully, sooner rather than later," and to get legal counsel's advice on whether the board can have a special hearing to discuss those topics.
In response, board President Henry Jones thanked Ms. Yee for her comments and went into closed session.
Also during the brief open session, Mr. Jones denied board member Margaret Brown's request that the board take public comment during the open session portion of the meeting. Mr. Jones followed the advice of Matthew G. Jacobs, CalPERS general counsel, that the board did not have to take public comments because the meeting was to be in closed session.
