Tagged: pension
LA’s Elliott Broidy to be served justice for the rich
LA financier Elliott Broidy, who pleaded guilty to paying $1 million in bribes to get New York State’s giant pension funds to invest in his Markstone Fund, is going to get off with a slap on the wrist.
The New York Daily News reported that prosecutors are expected to ask that Broidy’s sentence be reduced to a misdemeanor and no jail time because he’s been such a good such a yeled tov (good boy).
Broidy had been facing four years in prison but he cooperated with investigators and helped put former Comptroller Alan Hevesi in jail.
Sentencing has been delayed to Sept 28 to give the corpulent cretin enough time to pay the $18 million in restitution he owes the state.
Update: During this whole affair, Broidy has retained all his posts on boards and trusteeships, although it’s unclear how he can be trusted with anything. He’s on the board of the Republican Jewish Coalition. He’s also on the Board of Advisors for the USC Marshall School of Business’ Center for Investment Studies; the Simon Weisenthal Center’s Board of Trustees.
Gerald Parksy Deposed today in Villalobos Case
подаръциикона за подарък
Not Having a Good Day
CalPERS tried to forestall this airing of its dirty laundry, but a federal judge blocked the pension’s request to stop the deposition from taking place.
Villalobos was paid more than $47 million in commissions by private equity and real estate investment managers to help them win CalPERS contracts to manage about $4.8 billion worth of the fund’s securities from 2005 to 2009, according to a lawsuit filed by the California Attorney General’s office.
One of those private equity firms was Aurora Capital Group of Los Angeles, which hired Villalobos in 2008. Parsky is Aurora’s chairman. He’s also a former assistant Treasury secretary, a UC regent and was George W. Bush’s major doom in California.
So politically connected is Parsky that ARVCO allegedly intervened with CalPERS staff to obtain investment money for Aurora, pointing out the political juice that Parsky brought with him, according to an independent law firm investigation of the matter. CalPERS coughed up $400 million for Aurora Resurgence in 2008, earning Villalobos and his firm, ARVCO, a $4 million fee. Another $150 million CalPERS investment in a different Aurora fund, netted nearly $2 million for ARVCO.
Today, Parsky is being deposed in Los Angeles. Tomorrow, Aurora’s general counsel, Timothy Hart, will get his turn.
San Diego County Pension Lowers Rate of Return
San Diego County’s pension fund just handed the county bill for more than $30 million a year yet no one seems to have noticed.
Every three years, San Diego County’s pension fund looks into its crystal ball and decides what it expects investments returns will be over the next 50 years.
It’s arguably the most important and difficult decision the board has to make. Even a small change can force the county to cough up millions of dollars each year.
Yesterday, the board of the San Diego County Employee Retirement Association lowered its assumed net rate of return from 8.25 percent to 8 percent effective July 1, 2011. (Watch the meeting online here.)
A quarter percent may not sound like much, but it’s a change that will force the county to pay 3 percent of payroll each year. Using last year’s payroll numbers, that works out to roughly $33.88 million.
The 8 percent assumed rate of return represents the pension’s best guess about how the fund will do in the future, so that the county can set aside money to ensure the plan is well funded.
The shift to an 8 percent assumed rate of return moves San Diego County’s pension more in line with other big state pension funds. CalPERS, the $200 billion retirement system, is reviewing its assumed 7.75 percent rate of return and will make a recommendation to the board whether to lower it later this year.
Three years ago, the pension’s actuarial consultant, Segal Group, recommended an assumed rate of return but the then chief investment officer, David Deutsch, promised that he could generate the additional 8.25 percent with his Alpha Engine.
Deutsch resigned under pressure shortly before the pension reported losses of $2.4 billion for the 2008-2009 fiscal year.
The assumed rate of return is perhaps the most important variable in calculating a key barometer of a pension’s health known as the funding ratio — the ratio of assets to liabilities. SDCERA’s funding ratio stands officially at 91.5 percent, but that’s only because of an accounting practice that defers losses over several years.
If last year’s $2.1 billion loss were to be recognized right away, San Diego County’s pension fund would only be 65 percent funded, according to a report by an independent consultant. That’s well below the 80 percent that pension experts regard as healthy.
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.