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Are These Trips Truly “Mission Critical”? Re: California Public Executives

Last September, I wrote to CalPERS’ Chief Executive Officer to express my concern about travel by CalPERS’ executives.  I noted that Governor Brown had issued Executive Order B-06-011 banning both in-state and out-of-state travel by government agencies unless it was “mission critical”.  Last month, Associated Press’ Judy Lin wrote that notwithstanding this clear directive from the Governor, CalPERS had “spent nearly $1.4 million during that two-year period on travel for 84 board members, executives, portfolio managers and investment officers.”  Thus, I was stunned to see that CalPERS’ Board of Administration recently approved  travel requests for trips to Beaulieu-Sur-Mer, France; Israel, Palestine; Aspen, Colorado; Chicago, Illinois; and New York City, New York.  The approval took 20 seconds and was given without any questions or discussion whatsoever.  Cost apparently was not an issue because the meeting materials made available to the public did not include any estimates regarding the total costs of these trips.  You can watch the Board of Administration’s perfunctory approval here (beginning at 15:28).

In my September 2012 correspondence, I noted that the Governor’s Executive Order requested agencies to conduct an analysis of the discretionary nature of their travel in order to reduce unnecessary costs and requested a copy of any analysis prepared by CalPERS pursuant to the Executive Order.  Although my request was made under the Public Records Act which requires CalPERS to make a determination regarding the request within 10 days and communicate that determination promptly, I did not receive a response until nearly a year later.  Cal. Gov’t Code § 6253.  CalPERS could find no record of having performed the analysis requested by the Governor.

CalPERS Persuades Court That Federal Receiver Is A State Employee

In 2005, U.S. District Court Judge Thelton E. Henderson established a receivership for medical care in California’s prisons.  In an unusual bit of administrative gerrymandering, the  California Judicial Council through the Administrative Office of the Courts (AOC) appointed the current receiver as a “Federal Court Consultant” and then “loaned” the receiver to the California Prison Health Care Receivership Corporation.  The alleged purpose of all these machinations was to maintain the receiver’s eligibility with CalPERS.  In 2011, an individual filed a petition for a writ of mandate.  Last week, Sacramento Superior Court Judge Michael P. Kenny ruled that the petitioner had not shown that CalPERS’ determination that the receiver was an employee was invalid or that payments by AOC to the receiver amount to gifts of public funds.

The petitioner wasn’t the only person to question the receiver’s status.  In 2009, San Diego Superior Court Judge Runston Maino in his individual capacity initiated this inquiry as to who was paying the receiver, as evidenced by this filed in the Sacramento proceeding.

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...