The State Worker

Chronicling civil-service life for California state workers

May 4, 2011
What CalPERS' Jelincic would have said about gift bill

Thumbnail image for 110503 Jelincic.JPGAs we mentioned in our profile on Sundayof CalPERS' board member J.J. Jelincic, the former garbage man with a master's degree doesn't like Senate Bill 439. The measure, officially supported by the fund's board, cuts the value of gifts that fund employees can receive from the current $420 annually to $50.

Jelincic abstained when every other board member voted in support of the bill. He says he opposes it -- at least in its current form -- because it would force fund employees traveling on business to open their own wallets to pay for meals, since the state per diem isn't enough to cover breakfasts, lunches or dinners in, say, New York.

He took vacation time Tuesday, intending to testify before the Senate Elections and Constitutional Amendments Committee, but the measure was put on the consent calendar and no testimony was taken.

The State Worker asked Jelincic what he would have said. In response, he e-mailed his prepared remarks. With his permission we're posting them here, unedited:

I'm J.J. Jelincic. I am an investment officer at CalPERS and a member of the CalPERS Board of Administration. I also feel a little like Don Quixote standing in front of a "good government" train.

I am opposed to this bill (SB 439) because I believe the unintended consequences will do serious long term damage to CalPERS. In fairness to the committee, I will point out that the official position of the Board of Administration is to support the bill. I will also point out that none of the recent problems identified with gifts were related to gifts within the current FPPC limits.

I do not object to the bill being applied to the Board members. We chose to run for office or accept appointment to the Board. We have or can have either campaign or officeholder accounts that we can tap. We chose what meals and meeting we attend. It will lead to a less well informed Board. People are attacking the Board for not being informed enough but that is a risk the fund has chosen to run.

I do have problems with applying this bill to our staff. I have no problems telling staff that we do not want them to accept a crystal vase or a sleeve of golf balls. The problem comes because we define business and conference meals as gifts.

Staff should not have to reach into their pockets to do the jobs we ask them to do. If we do not want allow venders to pick up a meal then we must provide reasonable reimbursement to the employee. The current rates of $6 dollars for breakfast, $11 for lunch and $18 for dinner does not cut it in Manhattan, Boston, Chicago or San Francisco, to list just a few examples. If I'm going to give someone a hundred million dollars to invest for me I want to get to know that person. You do not get to know them sitting across a desk.

We frequently send staff to trainings and conference. At these events meals are often a part of the event. Speakers at meals are common. If the meal is "sponsored" by someone it is a gift. As you are all aware, the reportable value is not just the cost of the food. It is also hall rental, speaker fees, AV equipment etc.

The Department of Personnel Administration has indicated a willingness to negotiate more reasonable allowances for rank-and-file. Which I acknowledge is an improvement from DPA's position for the last 15 years. Why SEIU Local 1000 has not yet started those negotiations I don't know.

However, DPA has said it is unwilling to make any changes for management because "They make too much." I don't care what we pay them, we should not be asking employees to subsidize the necessary functions of the Retirement System.

Let me give some specific examples. Last month I went to the Council of Institutional Investors. At the conference Ceres, a coalition of companies, investors and environmentalists committed to sustainable investing, held a breakfast panel on sustainable fixed income investing. Ceres is an organization that CalPERS supports, in fact, Anne Stausbol, our chief executive officer is co-chair. This is an event we would encourage employees to attend.

It was a typical breakfast buffet: scrambled eggs, bacon, sausage, toast, pastries, oatmeal, cold cereal, coffee and juice. You have had hundreds of those meals over the years. Because it was held at a hotel, because people who had signed up did not attend and because Ceres ordered extra food in case more people showed up the cost per person was $79. If I had gone in my role as a staff person, I could have not attended, but remember this was an event we would want our employees to attend or I could have been written Ceres a check for $79, claim my $6 reimbursement and absorb the other $73. At the same CII meeting I attend a meeting sponsored by the AFL-CIO and Change to Win. The box lunch was a sandwich, an apple, a bag of chips, a brownie and a soda - 41 bucks.

Each year Principal Financial Group holds an event that reviews the prior year and the expectations for the coming year. It invites investors from across its various platforms. The meals are part of the event and have speakers. The meals were the typical breakfast buffet, a chicken lunch and a steak dinner. The cost was $75, $90 and $145. I could either go and write a check, collect my $35 and be out the other $275 or not go.

Last year Retired Public Employees Association hosted an annual reception for the CalPERS Board and senior staff. Very few staff attended because the crackers, cheese and fruit were not worth the $40 it would cost them.

This year we did not hold the annual United Way golf tournament because the prizes and meals and corporate sponsorships would have been gifts.

Unless we provide a means to reimburse our employees the actual costs of meals, the unintended consequence will be reduced training, reduced knowledge and less due diligence. The future costs will far exceed benefit of the appearance of "good government."

I have asked the sponsor to amend the bill to deal with reimbursements. To date he has declined. I therefore must urge you to reject this well intended bill.

I also acknowledge that it is easier for me to ask then it will be for you to vote agains,t and explain that vote against, a good government bill.

Thank you.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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