Criminal probe needed in Calif. kickback scheme, Eastman says
SACRAMENTO, Calif. (Legal Newsline) - California Attorney General-hopeful John Eastman recently said current AG Jerry Brown had a questionable reason for stopping short of criminal charges against the former CEO of the state's public pension fund.
Brown filed a civil lawsuit against former California Public Employees Retirement System board member Alfred Villalobos, his company ARVCO Capital and former CalPERS CEO Federico "Fred" Buenrostro, charging them with fraud, earlier this month.
Eastman, the former dean of the Chapman University School of Law who is seeking the Republican nomination, told radio show host Chris Reed that a criminal investigation might expose other wrongdoing at CalPERS.
Eastman noted a 1999 law that gave billions of dollars in retroactive pension boosts for state employees.
"What prompted this indefensible giveaway of taxpayer billions?" Reed wrote.
"A preposterous CalPERS study forecasting that the Internet stock market boom would never end and that the much-higher benefits would cost taxpayers little if anything...
"Eastman smells a rat and suspects a criminal effort to orchestrate a dishonest actuarial evaluation of SB 400's costs -- not rank incompetence on CalPERS' part."
Brown's complaint says Villalobos influenced CalPERS officials by taking them on expensive trips. It also says he gave Buenrostro a $300,000 job and a condo when he left CalPERS.
"Working as a placement agent for ARVCO, Villalobos spent tens of thousands of dollars to lavishly entertain key senior executives at CalPERS, who then influenced the board to authorize investments that generated over $40 million in commissions to Villalobos," Brown said.
"None of these actions were disclosed as required by law, as state pension holders and taxpayers have every right to expect."
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.