CalPERS “Bribery Lawyer” Sued for Defamation

(March 15, 2013) — The lawyer who led the investigation into “pay-to-play” scandal at the California Public Employees Retirement System (CalPERS) has been sued by a private equity company that was fingered in his report.

Philip Khinda and his law firm, Steptoe & Johnson, have been sued for defamation by Pacific Corporate Group of Coronado and its principal, Christopher Bower, the Sacremento Bee reported this morning.

The suit was filed in the District Court of Los Angeles on Monday and also points a finger at Navigant Consulting, based in Chicago, which worked on the CalPERS investigation.

The report from Khinda, which can be found here, criticised the actions of some former CalPERS board members and named Bower at Pacific Corporate specifically.

“During the review, we also considered whether CalPERS’ investment consultants and external managers had acted in a manner consistent with the best interests of the institution and its beneficiaries. Some apparently strayed from this high standard, and CalPERS either terminated its relationships with them or limited their relationships in other ways. Among them were Christopher Bower and his firm, PCG.”

The report said that payments made to placement agents were commonplace in the private equity industry, but it was a practice that should be frowned upon.

“Almost two million people…rely on CalPERS in one way or another for retirement income or health benefit security. Many of them are rightfully disappointed and, like us, will find the apparent conduct of certain of their former public officials disgraceful,” the report said.

In the suit, the plaintiff alleges that the investigation was based on ‘unfounded hearsay’.

In a statement, Steptoe & Johnson said: “Among other deficiencies, the claims in Mr. Bower’s filing are baseless. We anticipate a rapid and successful dismissal of this lawsuit, including the recovery of our attorneys’ fees and costs. California law is clear – you cannot squelch free speech on issues in the public interest with retaliatory lawsuits.”

Navigant in London could not be reached.

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