[Marxism] Pension Fund Fraud: The Wall Street Journal vs. Unions

michael perelman michael at ecst.csuchico.edu
Sat Oct 17 21:58:27 MDT 2009

The Wall Street Journal posted a story about Orange County's pension 
fund, gloating that it outperformed the supposedly union dominated 
California state pension fund: CALPERS.

Jim Carlton and Tamara Audi. 2009. "Orange County Dodged Bullet by a 
Avoiding Calpers: Southern California Locale Decided to Stick with Its 
Small Pension Fund in 2006." (16 October): p. A 4.

"Orange County had a chance three years ago to join the California 
Public Employees' Retirement System. Instead, county leaders stayed with 
a small Orange County pension fund, and now they feel vindicated for 
their stay-local strategy. While Calpers's investments went on to lose 
almost 30% of their value during the crash of financial markets last 
year, the Orange County Employees Retirement System, or Ocers, lost only 

"Now that Calpers has revealed that a former board member allegedly 
reaped $50 million in fees for arranging investments that could saddle 
state taxpayers with hundreds of millions of dollars in losses, those in 
Orange County who once lobbied to ditch Ocers are even happier their 
side lost the debate."

"Calpers, whose board is dominated by union ties, has invested much more 
aggressively in equities."

In fact CALPERS lost big by investing in real estate and hedge funds. 
Also, Orange County had a curious investment history, when in 1994, its 
treasurer, Robert Citron, lost heavily investing in derivatives, which 
he did not understand.  The county went bankrupt.

Of course, treasurers were expected to make big bucks as a way to keep 
taxes down.  This sort of pressure still continues.

Read more at:


Michael Perelman
Economics Department
California State University
Chico, CA

530 898 5321
fax 530 898 5901

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