The Sacramento Bee’s Dale Kalser:

CalPERS today severed its ties with Pacific Corporate Group, a longstanding investment advisor that had close ties to the man accused of bribing CalPERS officials.

The big pension fund said Pacific Corporate Group, based in La Jolla, would no longer manage more than $1 billion worth of money for the California Public Employees’ Retirement System. Pacific Corporate Group has been working for CalPERS since 1990.

Pacific Corporate is being replaced by two firms, Aviva Capital LLC and Capital Dynamics.

Earlier this year, Pacific Corporate lost its job advising CalPERS on investments proposed by others. But until today the La Jolla firm was still managing several CalPERS portfolios, including one dedicated to clean-tech.

The pension fund wouldn’t explain its decision to fire Pacific Corporate. But the firm had close ties to Alfred Villalobos, the Nevada businessman accused in a lawsuit of bribing three former CalPERS officials in an effort to steer investments to his clients.

CalPERS is saying goodbye to PCG’s founder, Christopher Bower, but the giant California pension fund is sticking with PCG Corporate Partners, now known as KMCP Advisors, which was headed by Timothy Kelleher and Douglas Meltzer and ran private equity funds for PCG. Kelleher and Meltzer recently sued their boss, Christopher Bower, for withholding more than $2 million in pay:

Bower Kelleher Meltzer Action 2010