California Public Employees’ Retirement System (CalPERS) board member Margaret Brown is demanding that the nation’s largest retirement system make public the results of an internal investigation examining whether board members are leaking confidential closed-door session information to the press while denying she is responsible for the disclosure of the information.

Brown issued a press release Sunday night in which she said that she “categorically denies having any role in purported disclosures that were the subject of the investigation.”

She also attacked fellow board member Theresa Taylor, saying Taylor was attempting to “damage other board members’ reputations” while “offering no supporting evidence.”

“Let the public see what Ms. Taylor considers evidence,” Brown said.

Taylor, in an interview with CIO Sunday night, said she stood by statements she made in article posted on CIO’s website on August 14. Taylor said in the article that a CalPERS internal investigation had pinpointed the fact that leaks in recent months were coming from board members but was not able to show with 100% accuracy which board members were leaking.

Brown says the publication of the investigation, along with the transcripts, will contradict Taylor’s claims. 

Brown’s press release also said that the CalPERS board “has pursued the ‘internal investigation’ in a series of secret, closed board meetings, justified publicly with phony legal rationales.”

“California statute makes it a criminal offense for board members to participate knowingly in a meeting that has been closed to the public without proper legal justification,” she said.

CalPERS board president Henry Jones was not immediately available for comment. CalPERS spokesmen Brad Pacheco and Wayne Davis did not respond by press time to emails asking for comment.

In her press release, Brown also noted what she said was “the irony” of Taylor commenting in the press “about the CalPERS internal investigation into board leaks. Brown said the information Taylor disclosed was discussed in a closed session and was supposed to be confidential.

“There is a glaring double standard at CalPERS, where board members who are part of the power faction are afforded impunity to comment publicly on closed session matters, while the rest of the board is smeared with innuendo and threatened with punishment for speaking publicly about matters that are part of the public record,” she said.

Taylor told CIO Sunday that she did not violate any closed session rules because it has been disclosed publicly by the board that there was an investigation into leaks. It’s unclear when that disclosure occurred and Taylor was not immediately able to offer specifics.

Board sources said that outside investigators hired by the CalPERS board have focused their inquiry on Brown and former board member J.J. Jelincic. They said the board voted not to release the findings because the investigation is continuing.

Both Brown, who has served on the CalPERS board for two years, and Jelincic, who served on the CalPERS board 2009-2017 and is running to rejoin the board and replace board president Jones, have been outspoken critics of the pension organization’s policies.

Before he left the CalPERS board, Jelincic was censured by his fellow board members, who said he had leaked information to the press and was required to take an ethics seminar at University of California Berkeley.

Both Brown and Jelincic have been critical of CalPERS’s plans to build a new $20 billion private equity organization. The plan would create CalPERS-owned investment entities to take long-term equity stakes in established companies as well as invest in late-stage companies in the venture capital cycle. CalPERS, however, would not have control of investment decisions; they instead would be made by general partners who would be hired by CalPERS and work independently of the CalPERS board.

They have also been critical of CalPERS’s plans to build the tallest building in Sacramento, a 30-story building on a vacant lot in the heart of the city. As the financial crisis began in 2007, CalPERS pulled the plug on plans to build twin 53-story condo and office towers and the site has been empty ever since.

Leaked real estate reports that appeared in various media reports last year showed that CalPERS’s real estate consultant and real estate brokers felt the new office tower plan has little chance of  success because of the sluggish Sacramento office market. Despite the reports, the CalPERS board approved the plan with Brown and several other board members dissenting.

The new accusations from Brown came as the CalPERS governance committee Tuesday afternoon is expected to give first reading preliminary approval to a code of conduct for board members.

Taylor has told CIO that not only is the code of conduct important, it must also include penalties for board members who violate the code, including leaking closed-door board meeting material to the press.

Brown has spoken out against the plan, saying it is too vague and could be used to discipline her and other board members who disagree with CalPERS policy.

When the code of conduct was first presented to the 13-member CalPERS board July 17, it contained a clause stating, “when action is taken by [the] committee or the full board, all board members will support the actions regardless of their individual vote on the policy.”

A new draft sent to the board July 26 did not contain the controversial provision. Brown had been the original provision’s biggest critic, saying it was aimed at keeping dissenting board members from talking to the press and not airing negative publicity about CalPERS.

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Tags: CalPERS, Governance, Margaret Brown, Pension