(July 20, 2010) — A nonprofit public interest organization has sued the California Public Employees’ Retirement System (CalPERS) for documents related to a failed $100 million investment.

The suit targets the pension fund’s controversial residential property firm investment in Page Mill Properties, a real estate fund that defaulted on a $50 million payment last year. The First Amendment Coalition (FAC), based in San Rafael, CA, filed the suit in San Francisco Superior Court claiming CalPERS’ investment in the now-bankrupt Page Mill Properties faced allegations by community groups that the real estate investment fund’s management tried to drive out low-rent tenants to finance its growing debts. The nonprofit firm demanded under the Public Records Act that CalPERS reveal the details and events leading up to its failed property investment in 2006 to the Page Mill Properties II project.

“At a time when CalPERS is under close scrutiny because of inflated payments to “placement agents” who steered CalPERS money to disastrous investments, CalPERS has taken the position that it will not disclose records related to this investment,” states the lawsuit filed Friday by the First Amendment Coalition. “CalPERS’ investment of $100 million in a project that has yielded nothing raises significant questions.”

According to the FAC, CalPERS was a major investor in other real estate developments that involved the displacement of low-rent tenants, including the $5.4 billion Peter Cooper Village and Stuyvesant Town apartment complex in lower Manhattan. CalPERS invested $500 million into that venture.

“The public has an overriding interest in learning how CalPERS could have determined that Page Mill, despite the ouster of poor tenants, the high debt levels and other risks, was an appropriate investment for CalPERS’ assets,” said FAC executive director Peter Scheer in a statement. “Only by understanding how the investment was made can the public be confident that CalPERS has made sufficient changes to prevent this from happening again.”

Karl Olson, the lawyer representing FAC in the CalPERS case, added: “Socially responsible investors aim to do good and to do well. In its disastrous Page Mill investment, CalPERS did bad–by funding the ouster of poor tenants from rent-regulated apartments–and did very badly.”