CalPERS’ $11 million legal payment scrutinized
June 28, 2011
An $11 million bill for legal fees associated with an internal review of the California Public Employee’s Retirement System (CalPERS) is drawing criticism. LATIMES
CalPERS, the nation’s largest public pension fund which oversees $232 billion, paid a Washington, D.C. law firm and its advisors the $11 million sum following a legal review which uncovered evidence to support allegations of corruption and bribery involving alleged insider dealings, according to the Los Angeles Times which made CalPERS disclose the payment.
CalPERS says the findings from the 18-month review by Steptoe & Johnson allowed them to negotiate $215 million in fee reductions from private equity investment managers who handle much of its assets.
While CalPERS chief investment officer told the LA Times the fees were worth every penny, some of the fund’s own directors are scrutinizing the payment including state Controller John Chiang and state Treasurer Bill Lockyer who are calling for a full accounting of every dollar spent and a change in how CalPERS approves contracts where spending is in excess of $1 million.
Some critics argue CalPERS should have elicited the help of the state attorney general’s office rather than an East Coast law firm to conduct the internal review.