Budget Reform
Our current budget process in the State of California is both outdated and outmoded. My experience balancing budgets in the corporate world as well as my 18 years balancing budgets on the San Ramon Unified School District Board, taught me that benchmarks, review and accountability are key to effective management of limited financial resources.
Join me in supporting reform that will reduce cost and improve outcomes.
Principal Co-Author Buchanan Says Placement Agent Activities Don’t Pass ‘the Smell Test’
SACRAMENTO—Legislation that limits the clout of placement agents at California’s public pension funds today passed the State Assembly with bi-partisan support.
Assembly Bill (AB) 1743 stops placement agents from receiving contingency fees and requires them to register as lobbyists before lobbying CalPERS and/or CalSTRS for investment business for clients.
“These transactions do not pass the smell test for ethical business conduct,” said Assemblymember Joan Buchanan (D-Alamo) who is a principal co-author of the measure. “The lack of transparency with the transactions of many placement agents undermines the fiscal integrity of our pension fund systems.”
A flurry of recent news stories has examined the practice of former pension officials who have been accused of accepting gifts from placement agents in exchange for business. Two former CalPERS officials were sued by California’s Attorney General for allegedly paying kickbacks to ensure outside firms won a piece of the fund’s investment portfolio.
“This bill further protects our public pension funds along with the millions of Californians who expect our public retirement systems’ investment decisions to be made in an impartial, transparent manner, free from any potential bias caused by gifts, campaign contributions or the financial interests of placement agents,” stated Buchanan.
At least five states (New York, New Jersey, Illinois, Connecticut and New Mexico) have established or are in the process of creating placement agent statutes in order to shield investment decisions from actual or perceived unwarranted business influences.
This legislation is sponsored by the California State Treasurer, the California State Controller and the CalPERS Board of Administration.
Excerpted from www.asmdc.org.
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