Alleged CalPERS Corruption

John Seiler:

How much more of this are Californians going to take? Will another tax increase be needed?

The L.A. Times reports:

In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms.

A 17-month investigation also found that Federico Buenrostro Jr. — along with former pension fund board members Charles Valdes and Kurato Shimada — strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro.

The report, prepared for the California Public Employees’ Retirement System by Washington law firm Steptoe & Johnson, comes amid widening attacks on public employee pension funds in California, Wisconsin, Iowa and other states for providing lavish benefits that cash-strapped governments can no longer afford.

California taxpayers, of course, are on the hook for any losses at CalPERS that drop its value below that of its ability to pay government-employee retirees.

CalPERS already lost more than $10 billion in bum real-estate investments.

So, here’s how the system works if you’re a taxpayer:

* Your 401(k) drops in value. So your retirement will be much reduced. Social Security also has problems, so that probably will be cut as well.

* Your taxes also will be raised to make sure government employees continue to receive luxurious retirements.

The system is unfair and obviously needs to be reformed in two ways:

1. All current government employees should be put on 401(k)-type systems.

2. The retirement pay of existing retirees should be cut to meet the value of the actual investments of CalPERS, CalSTRS and other systems. No more raids on the general fund, which are paid for by taxpayers.

March 15, 2011