Category: San Diego
SD Pension Says Alec Gores Carries Headline Risk
Updated to note pension’s conclusion that publicity has not affected returns.
Alec Gores
The board of the $7.3 billion San Diego County pension fund is slated to vote Thursday on a $50 million investment in billionaire Alec Gores’ latest private equity fund, Gores Capital Partners III.
In a memo to the board, SCDERA notes that Alec Gores carries some “headline risk” as he and his relatives have “attracted some media attention, possibly because of Mr. Gores’ being a successful businessman based in the Beverly Hills area.”
That’s a weak way of saying that Gores and his equally wealthy brother were involved in a love triangle that became embarrassingly public.
Even so, SDCERA found no evidence that media publicity affected investment performance of Gores’ funds.
Alec Gores is the older brother of Tom Gores, who owns the San Diego Union-Tribune through his separate private equity fund, Platinum Equity.
Tom Gores
In December 2000, Alec Gores grew suspicious that his then wife, Lisa, was having an affair with brother Tom and hired Los Angeles detective Anthony Pellicano to find out.
The detective staked out a tryst at the Beverly Hills Hotel and wiretapped a nervous phone call between the two lovers, which was played for jurors at Pellicano’s 2008 trial. Here’s Allison Hope Weiner’s Huffington Post coverage of the trial.
Gores reports no known investments with major operations in San Diego County. That’s true, in so far it goes. Gores sold off his holdings in Aonix, a San Diego software firm, a few years ago.
But kudos to the fund for making this information public ahead of time. A refreshing change.
Bersin: I shouldn't have lawyered it
Now it’s clear why even the Democratic controlled U.S. Senate had problems with the nomination of Alan Bersin, President Obama’s commissioner of Customs and Border Protection:
They caught him in a lie and he wriggled a fish to get out of it.
Bersin failed to file paperwork for household employees. That alone is excusable. It’s the rare American who fills out an I-9 form for every babysitter, nanny, gardener, or maid who works for them.
What’s inexcusable is that Bersin said that he didn’t know he was required to do so.
Preposterous. Bersin is a Harvard-educated Rhodes scholar as well as a former U.S. Attorney in San Diego and his wife under Clinton. Immigration was his signature issue: he served as “border czar” in two administrations.
If that wasn’t enough his wife, Lisa Foster, is a California judge.
Bersin employed 10 household employees since 1993 — the year he became U.S. attorney in San Diego — and didn’t fill out I-9 forms for any of them. A Senate memo wryly notes that Bersin “knew of the existence of the Form I-9” as it “came up” in his tenure as U.S. attorney.
Bersin tried to explain his screwup with Clintonian hair-splitting over the difference between employers and independent contractors.
The Senate Finance Committee, which received Bersin’s nomination in September, was clearly troubled by his explanation, or lack thereof. It seems that it dawned on Bersin that his nomination was in jeopardy in January when he began feverishly filling out his missing paperwork.
On March 19, Bersin and his wife, Judge Foster, met with committee staff. This meeting was described as a “due diligence” meeting, but “come to Jesus meeting” is more apt.
With much hand-wringing and kow-towing, Bersin apologized and fessed up.
Asked whether his legal hair-splitting was a rationalization for his failure to file the proper paperwork, Bersin responded “That could be.” He also said that he “should not have lawyered it.”
A week later, Obama used his executive power to install Bersin in office.
The president made it seem like Republicans were stalling his nominations to score political points.
In the case of Bersin, however, the Senate was merely doing its job.
Ray Lucia Defamation Threat
For more visit: A Professional’s View of Ray Lucia’s Non-Traded REITs
Investor and local radio talk show host Ray “Buckets of Money” Lucia has threatened to sue me for $300,000 for defamation over a blog post I wrote last month.
Robert K. Butterfield, a San Diego attorney, is outraged that I dared to besmirch the good name of Raymond J. Lucia, who dispenses financial wisdom on a daily radio show in several big media markets. This is after all the same man actor Ben Stein recently described in an opinion piece in The New York Times as a “stock guru.”
Attorney Butterfield insists that I must stop pointing out Lucia’s relationship to San Diego-based First Allied Securities, which recently agreed to pay nearly $2 million to settle U.S. Securities and Exchange Commission charges that it failed to supervise one of its employees.
He also demands that I never again repeat the blasphemy that fees for Lucia account run as high as 2 percent, paid quarterly in advance. (Lucia Defamation Threat Letter)
Your statement that Mr. Lucia’s company has never charged a management fee of 2% is completely false and another intentional malicious act. His company has never charged a management fee of over 1% even though they have the ability to charge up to 2% — but you did not bother to check this — did you?
Even though Lucia’s own SEC disclosure plainly states “The standard annual managed fees for RJL [Raymond J. Lucia] Adviser Directed accounts are 2 percent,” Attorney Butterfield has a point. Fees for one “wealth management” program pushed by Lucia actually run as high as 2.9 percent
That is an eye-popping number. It’s about half of the compound rate of return of the Dow Jones Industrial Average for the past 50 years. That fee is assessed on the entire value of whatever you invest with Lucia, even if he loses money. It makes me wonder whose wealth is really being “managed” here.
SD Co. pension responds to my story
Lee Partridge, the investment consultant for the $7.2 billion San Diego County retirement fund, responded at yesterday’s board meeting to my story that appeared April 4 in the Voice of San Diego about the fund’s $2.5 billion bet on leveraged Treasuries.
Lee and I spoke this morning and he sent along the written response that he presented to the board, which appears below. You can also watch his presentation at yesterday’s board meeting by clicking here.
Ex-UT Veteran Edits A Second Pulitzer Story
If they gave out Pulitzers for editing, Susan White, who left The San Diego Union-Tribune in 2007, would have collected her second yesterday.
Susan White
White is now in New York at ProPublica, the online investigative site, where she edited Sheri Fink’s story that claimed a Pulitzer for investigative reporting. This is the first time an online site has won journalism’s top honor.
Trump / Russia 