Influential CalPERS Beneficiaries Charge Sacramento Bee With Biased Coverage

Those of you who have taken interest in the seemingly never-ending saga of CalPERS’ diseased governance and incompetence, and now the determined efforts of its executives and the majority of the board to thwart efforts to clean the institution up may have noticed how the Sacramento Bee, the newspaper CalPERS cares most about, has reliably run what looks like official PR in lieu of reporting. The fact that CalPERS can rely on the Bee to cover its back has helped institutionalize incompetence and bad conduct. Why bother shaping up if you can keep up an alternative reality in Sacramento?

For instance, the Bee failed to take note of the scandal over then CFO Charles Asubonten’s resume fabrications even after Pulitzer Prize winning reporter Mike Hiltzik of the Los Angeles Times wrote a long, critical story. Its first report was to break a story CalPERS had fed it, that CalPERS was launching an investigation. Admittedly, the reporter then covering CalPERS finally wrote a critical piece, well after the scandal was over. The Bee was also largely missing in action during the scandal over CEO Marcie Frost misrepresenting her education before and after she was hired, when that story got attentive national and even international coverage.

In keeping, the Bee manages to find the time to give extensive coverage to far less consequential controversies involving pro-reform board members, JJ Jelincic, who was off the board last year but is running for the retiree seat now held by Henry Jones, and Margaret Brown. And these stories are visibly far from even-handed. See our shred of one example: How Sacramento Bee Reporter Adam Ashton’s Hit Piece on CalPERS Board Member Shows He’s in the Business of Flacking, Not Reporting.

Tellingly, instead of doing bona fide reporting on CalPERS, the Bee also started on a hit piece on us, which came out blunted due to the fact that I had to alert the the executive editor, Lauren Gustus, more than once that the line of questioning that Adam Ashton was taking was consistent with an intent to defame. It nevertheless, as we described, contained significant errors and smears.

In a further sign of decay at the Bee, it has run a series of hit pieces on JJ Jelincic, to the degree that influential retirees have taken issue with the Bee’s motives and fairness. We received a copy of an e-mail sent by former county prosecutor David Soares, who is an officer at the Retired Public Employees’ Association. This evening, Tony Butka, who was the Presiding Conciliator for the California State Mediation & Conciliation Service, published a new column criticizing the Bee’s coverage of CalPERS. Soares and Butka confirmed that each wrote independently and at their own instigation.

It is also noteworthy that Lauren Gustus failed even to reply to the August 8 e-mail below (emphasis original):

Ms. Gustus,

I’m a retired Santa Clara County prosecutor of 32 years experience who also served for 12 elected terms as a labor representative for Santa Clara County’s prosecutors and public defenders (we wisely shared the same bargaining unit and compensation codes). I am still a licensed attorney, a member of the Legislative Committee of the California Retired Public Employees Association, and a current CalPERS beneficiary. I was very disappointed to read Marcos Breton’s one-sided August 8th hit-piece on CalPERS board candidate JJ Jelincic, which fails to seriously address the question asked by the headline: “So how is this CalPERS candidate a favorite to win?”

The short answer is that Jelincic has the endorsement of every major organization representing state and local CalPERS retirees.

The longer answer is that by any objective measure, the current CalPERS Board of Administration under Henry Jones is seriously deficient in the exercise of their constitutionally-mandated fiduciary oversight of the trust fund. Not only is the 2002-2008 CEO of CalPERS still in federal prison for a fraud in which he accepted piles of cash from a placement agent who blew his brains out rather than have to face trial, but CalPERS is still in bed with the source of those piles of cash, the private equity firm Apollo. Apollo’s CEO Leon Black is sadly in the news again, as a prominent associate of “fixer” Jeffrey Epstein.

The current CEO of CalPERS turns out to be a high school educated clerk-typist from the State of Washington who misrepresented herself as having completed the coursework for a Masters in Public Administration — when she had not only never formally enrolled in a college degree program, but the academic institution she claimed to have attended never offered the claimed dual degree. It did turn out that the CEO had supervised a clerical function of the Washington pension system, but the investment and actuarial functions are performed by separate agencies (I guess because Republicans love small government). Former Treasurer John Chaing called for an investigation, but Henry Jones and the CalPERS board simply ignored him.

This unqualified CEO subsequently hired a CFO for nine months who had also fabricated his resume. Even though the CEO tried to publicly defend him, the CFO was fired by the board after Mike Hiltzik ran a scathing exposé in the L.A. Times. The only investment plan yet put forward by the new CEO has been to try to spin $20 Billion in investments off to a private, unaccountable, and completely opaque pair of interlinked firms proposed by tech attorney Larry Sonsini — at an annual fee of $100 Million EACH, plus 20 percent of any profit. Meanwhile, CalPERS can only claim to be 71 percent funded, missing its investment targets by a wide margin.

I’ve personally looked into JJ Jelincic’s past, because I was a member of the Executive Board of the Santa Clara County Government Attorneys Association at the time of the original allegations — and JJ’s father happened to be the public school teacher who had taught my mother to drive back in 1969, when I was 12 years old. Due to my particular interest, at that time I even obtained access to documents and transcripts.

What I found came as no surprise to me as a former labor representative. Let’s just say that in the State of California, an outspoken critic of management and the status quo often runs the risk of being accused of making people “uncomfortable.” That is all that was ever sustained against Jelincic, not gender bias. It did not appear to have been coincidental that these allegations were only made after he asserted strong oversight over CalPERS staff as a board member. Jelincic was re-elected to the CalPERS Board and as president of his union local in the aftermath, which ought to tell you what the rank-and-file thought at the time.

I am extremely disappointed by some people joining what amounts to a campaign of slander against a person who is highly qualified and who I sincerely believe to be unbiased. CalPERS management are orchestrating this campaign, which one of their aides made very clear to me at their off-site in July. Jelincic running against a person who only seems interested in preserving his $44,000 in annual travel reimbursements

As a former prosecutor, I have always been concerned about how unintentional bias may creep in to our decision-making. Could Opinion Editor Gil Duran be suffering from unintended bias when it comes CalPERS? His former employer Jerry Brown failed to take strong action against the former CEO during Mr. Duran’s tenure as his press secretary, and instead we faced the sad spectacle of a federal prosecution. I hope that this is not the case.

David Soares

Thursday evening, LA Citywatch published Tony Butka’s latest article, Is the Sacramento Bee a Newspaper or a Front for the CalPERS Staff? I urge you to read it in full. The opening part:

On August 30, ballots go out for an important election for Retiree Member of CalPERS Board of Directors.

On the one hand, there is the incumbent establishment Icon, Henry Jones, and on the other, is former Board member J.J. Jelincic, a man who actually understands what fiduciary responsibility means.

So why is the Sacramento Bee newspaper running a series of hit pieces against challenger J.J. Jellincic? As far as I know, nobody on The Bee’s staff is an actual CalPERS beneficiary, so what’s in it for them?

One of the stories that Butka dissects contains claims made about a State Personnel Board discipline against Jelincic in 2011. I suspect unlike just about everyone who has hyperventilated about it, I got the SPB filing many years ago and read it. It involved three employees when Jelincic was a manager. There was one allegation per employee. One said Jelincic said she had nice shoes. One said Jelincic complimented her on her dress. The third claimed he looked her up and down “with bedroom eyes”. Given that Jelincic wears glasses and the lenses look thick, I have trouble seeing how anyone could determine that.

Jelincic was found to have been “discourteous”. Not the “s” word or the “h” word. But they somehow got into the press years ago. No wonder Jelincic’s disputes that characterization.

It isn’t just sad to see the Bee in such decline. Its journalistic dereliction of duty is also a tremendous disservice to CalPERS beneficiaries and CalPERS taxpayers. And the Bee does not have to toady to CalPERS to get access; CalPERS needs the Bee more than the Bee needs CalPERS. Accordingly, the writer responsible for the widely read State Worker column a few years ago, Jon Ortiz, was far more evenhanded in his CalPERS coverage than either of his successors.

How can you trust a paper that acts like a paid attack dog? The Bee will eventually find out that it can run on brand fumes only for so long.

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