CSUN University News Clippings

Audit says CalPERS board member took excessive donations

(September 9, 2009)

By Andrew McIntosh

A prominent CalPERS board member with a history of personal financial troubles accepted campaign contributions from people and companies in the pension fund industry that exceeded legal limits, the state’s political watchdog agency said Monday.

Charles Valdes had just been re-elected in December 2005 when he took $38,600 in campaign donations from companies and individuals doing business with the state’s giant public employee pension fund. Valdes’ campaign was over and he had no political expenses or debts at the time.

Now, following a review of the contributions, auditors at the state’s Fair Political Practices Commission found that all six donations to Valdes between $5,000 and $5,600 each exceeded the state’s legal limit of $3,300 for a California Public Employees’ Retirement System board election.

That means Valdes’ campaign took in $18,800 more in contributions than it legally could accept. The two-page FPPC audit was obtained under the Public Records Act.

The donors were employees and people associated with Arvco, a Nevada-based pension investment consulting firm whose clients sought and later received more than $3 billion worth of CalPERS investments while Valdes chaired the fund’s investment committee.

FPPC Executive Director Roman Porter declined to comment, saying the audit has been forwarded to the commission’s enforcement arm. FPPC attorneys may issue a warning letter or impose a fine. The watchdog’s next public meeting is in October.

Valdes, who was being sued for unpaid credit card bills at the time, has declined to comment on the campaign contributions or the FPPC audit. So has CalPERS.

However, Valdes’ campaign treasurer, Billy J. Hughes of Sacramento, told an FPPC auditor that Valdes accepted donations too large by mistake, the audit states.

“Mr. Hughes stated that, at the time the contributions were received, the committee believed that the statewide elective office limit applied to PERS board candidates,” the audit states. “When they discovered that the lower elective state office limit applied, the contributions had already been deposited to the campaign bank account. None of the contributions were used,” the audit said.

Hughes told The Bee this summer that some of the Valdes campaign money was used – he wouldn’t say how much – for retirement festivities for another CalPERS board member, Robert Carlson, in 2007. Carlson said he had no knowledge of that.

Publication: Sacramento Bee