October 13, 2011
Anne Stausboll, the CEO of the embattled California Public Employees’ Retirement System (CalPERS), delivered the annual Witkin Schaber Lecture on Oct. 11, 2011, at the Sutter Club in downtown Sacramento.
The Gordon D. Schaber Lecture Series is sponsored by the Witkin Legal Institute, the McGeorge Capital Center for Law & Policy, and the Sacramento County Bar Association. The lecture is named for the late Dean Schaber, who transformed McGeorge from a one-room night school to an internationally known law school during his 1957-1991 tenure. He was a close friend of B.E. Witkin whose legal scholarship had an enormous impact on California law.
Stausboll took over leadership of CalPERS in January 2009 after a scandal rocked that executive branch agency, which manages pension and health benefits for more than 1.6 million California public employees, retirees and their families. She is the eighth CEO and first woman to head the country’s largest public pension fund that boasts $220 billion in assets.
The previous year, a series of revelations surrounding pension fund investment methods and possible kickbacks to high-ranking CalPERS officials buffeted the agency and severely harmed its public image.
Stausboll gave an overview of the scandal to the audience of attorneys and law students, and outlined her organization’s methodical approach to put strategies in place to prevent any future ethical breakdowns.
“Our story emphasizes the need for the highest ethical standards and procedures when you are dealing with money and power,” she said. “We engaged outside counsel, who in turn engaged a forensic firm to get to the bottom of our past arrangements with placement agents for financial firms that wanted to help run CalPERS’ money.”
One such agent, a former board member and friend of the CEO who preceded Stausboll, reportedly earned $47 million in fees. The California Attorney General has filed a lawsuit against the two men, accusing them of securities fraud and seeking $95 million in civil penalties.
“I can’t comment on pending litigation,” Stausboll said, “but I want to assure you, that thanks to the independent review we commissioned, we have taken swift action to increase accountability and transparency, strengthen ethics guidelines, and implement all needed reforms.”