To: public_affairs@calpers.ca.gov
From: Jim McRitchie <jm@perswatch.net>
Subject: sif-l: Petition under GC, section 11340.6
Cc: Kayla_Gillan@calpers.ca.gov
Please forward to Jim Burton, CEO
Dear Mr. Burton:
This is a petition under the provisions of Government Code, section 11340.6.
WHEREAS, (1) section 19990(f) of the Government Code prohibits board members and staff from accepting any gift from anyone doing or seeking to do business with state agencies, such as CalPERS, under circumstances from which it reasonably could be substantiated that the gift was intended to influence official actions, and
WHEREAS, (2) an Alcohol and Beverage Control employee was dismissed for accepting a free drink from a bar he was reviewing, and
WHEREAS, (3) the Los Angeles Times (2/2/98, 2/4/98, 2/5/98) documented a series of much greater abuses by board members at CalPERS centering on conflicts of interest, including the acceptance of entertainment, meals and other gifts from those doing business with CalPERS, and
WHEREAS, (4) Government Code, section 11340.5(a) provides that no state agency shall issue, or attempt to enforce any policy, except one that relates only to internal management, unless the rule has been adopted as a regulation and filed with the Secretary of State pursuant to specified provisions requiring public notice, necessity, nonduplicaiton, authority and reference, clarity and other conditions, and
WHEREAS, (5) CalPERS policy (BD-98-03) and its associated implementing procedures (4/1/98), which do not prohibit gifts but merely require they be reported by CalPERS fiduciaries and by those doing or seeking to do business with the system, are in clear violation of Government Code, section 11340.5(a), and the probable intent of section 19990(f), now therefore be it
RESOLVED, that CalPERS use its authority under the provisions of section 20120 of the California Public Employees' Retirement Law to promulgate regulations which:
* prohibit its board members from soliciting or accepting gifts from anyone doing or seeking to do business with the system,
* prohibit those doing or seeking to do business with the system from offering or giving such gifts
* severely penalize any violations.
Specifically, I propose adding the following section to California Code of Regulations, Title 2:
559 Gifts
(a) Board members. No Board member shall accept, directly or indirectly, any gift, including money, or any service, gratuity, favor, entertainment, hospitality, loan, or any other thing of value from anyone who is doing or is seeking to do business with the California Public Employees' Retirement System.
(b) Contractors. No party engaged in business for gain or seeking to do business for gain with CalPERS shall offer, directly or indirectly, any gift, including money, or any service, gratuity, favor, entertainment, hospitality, loan, or any other thing with a value over $10 to board members of the California Public Employees' Retirement System.
(c) Violations; fines; limitations.
(1) Any person who knowingly or willfully violates any provision of this section is guilty of a misdemeanor.
(2) In addition to other penalties provided by law, a fine of up to the greater of ten thousand ($10,000) or three times the amount the person unlawfully gave or received may be imposed upon conviction of each violation.
(3) Prosecution for violation of this section must be commenced within four years after the date on which the violation occurred.
If you have any questions regarding this petition, please contact me at (916) 452-5338 or via e-mail at jm@perswatch.net
cc: interested organizations, officials and the press
Sincerely,
Jim McRitchie
CalPERS Member
e-mail: jm@PersWatch.net
internet: http://PersWatch.net
The petition was denied on September 3, 1998 because existing provisions of law and CalPERS policies already provide for adequate disclosure of gifts.
Disclosing gifts is not the same as banning them. Disclosure still leaves open the question of motive and I believe most gifts are given to Board members in an attempt to improperly influence their decisions.
Contact: 
jm@perswatch.net