Questions Circulate Over Destruction of Evidence at CalPERS

CalPERS is facing scrutiny over its email deletion policy, with critics arguing that at government agencies, emails are considered public records.

(June 12, 2011) — The California Public Employees’ Retirement System (CalPERS) is being scrutinized for automatically deleting emails older than 60 days.

While the fund faces accusations that it could be destroying important evidence of wrongdoing, CalPERS has been spearheading the push for heightened transparency.

Worries about lack of disclosure in the pension fund community exploded last year when a pension-fund scandal in New York exposed the role of placement agents in bribery and corruption charges. In May 2010, California’s attorney general filed a civil lawsuit alleging CalPERS officials Federico Buenrostro Jr. and Alfred R. Villalobos participated in a scheme to obtain business for investment firms, providing pension officials with luxury trips and other gifts.”Gathering information is not enough,” said Anne Stausboll, CalPERS chief executive officer, to the LA Times early last year. “We remain firmly committed to pursuing a full and fair examination that the special review will provide, and to backing legislation that would remove contingent fee arrangements and require placement agents to comply with the same rules as lobbyists.”

“California’s public pension systems are the largest in the country and should be held to a higher standard,” Senator Gloria Negrete McLeod, chair of the Senate Public Employment and Retirement Committee, said in a statement following California Controller John Chiang’s February decision to tighten lobbying restrictions.

The timing of CalPERS’ email deletion policy is now raising concerns, largely due to the fund being the focus of investigations by state and federal authorities. While the email deletion policy was instituted last year, it was disclosed only recently in response to a Public Records Act request from the Los Angeles Times. In response, CalPERS defended itself, arguing that its email retention policy was aimed at “removing obsolete and/or extraneous records” from its email system.

The fund has issued a statement on its website, citing the LA Times report:

“The report also implies that the policy was instituted during our special review of placement agents and that CalPERS could be ‘destroying evidence of misdeeds.’ This could not be farther from the truth.The policy has been in effect since November 2000 and was provided to the Times in a Public Records Request. It clearly states that management is responsible for identifying to their staff the kind of email messages which need to be retained for CalPERS business purposes, and for ensuring that their staff understands and complies with this practice. CalPERS staff are required to determine if their email messages need to be retained for CalPERS business purposes. If emails are needed for litigation purposes or other business reasons, a hold is placed on all records for preservation. This is consistent with methods used to retain all business records irrespective of their form and is a similar policy used by other state agencies.”



To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

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