The State Worker

Chronicling civil-service life for California state workers

October 7, 2011
Jerry Brown signs one CalPERS bill, vetoes another

Thumbnail image for 080811 Jerry Brown.JPGGov. Jerry Brown has signed a bill that sets new restrictions on how long former public pension fund officials must wait to lobby the funds for business, aiming to close the kind of "revolving door" access by former executives and board members that has scandalized CalPERS.

Brown also vetoed overwhelmingly popular legislation that would have lowered the annual limit on gifts that CalPERS and CalSTRS board members and executives could accept.

Controller John Chiang, who sits on both the CalPERS and CalSTRS boards, sponsored both bills and had publicly urged Brown to sign them.

The governor signed Assembly Bill 873, which extends how long former CalSTRS and CalPERS board members and high-level employees must wait to lobby the state for business. The toughest provision puts a 10-year moratorium on former board members and designated fund staff accepting compensation as so-called "placement agents" in connection with CalPERS or CalSTRS business.

Placement agents act as well-connected middlemen who earn hefty fees by putting pension funds in touch with businesses seeking investments. Chiang backed the bill as way to shut the revolving door that exposed CalPERS to an embrassing influence-peddling scandal involving former board member acting as a placement agent.

Brown was the state's attorney general when the scandal broke, and he launched litigation that has continued under his successor, Kamala Harris.

Opponents of the measure, mostly fund staff and CalPERS board member J.J. Jelincic, saw the legislation as an unfair career impediment and a political overreaction to the scandal.

"While I have signed this bill, I note that what's good for the goose, should be good for the gander," Brown wrote in his signing message, a thinly-veiled reference to the one-year limit on former legislators before they can lobby.

Brown vetoed Senate Bill 439, which would have prohibited board members and executives at the pension funds from accepting gifts in excess of $50 per year from anyone doing business with CalPERS or CalSTRS. The law sets the limit at $420 per year, although CalPERS has banned its employees from taking any gifts.

Lawmakers in the state Senate and Assembly passed SB 439 by a combined 118-0 vote.

But Brown's veto message says that the measure would "create a special set of rules that will apply exclusively to CalPERS and CalSTRS" and further complicate an already complex state reporting system without advancing government transparency very much.

PHOTO: Gov. Jerry Brown (Hector Amezcua / Sacramento Bee, 2011)

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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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