By Anne Lowe
PUBLIC INFORMATION Documentation of a failed investment by the California Public Employees Retirement System (CalPERS) must now be released to the public, a San Francisco judge has ordered.
The First Amendment Coalition sued CalPERS in July to force the organization to release information on its relationship with Page Mill Properties, a failed low-income housing development in East Palo Alto. The Contra Costa Times reports:
The case was simply about understanding how CalPERS "made such a big and bad investment," said Peter Scheer, the coalition's executive director. He said he hoped to be able to offer the documents electronically to news organizations as soon as the California Public Employees Retirement System releases them. Olson estimated more than 600 pages will be made public.
Included in those records will be the partnership agreement between the pension fund and Page Mill, Olson said. That document, Scheer said, should help unravel how the $100 million investment was lost.
The documents should show "what kind of vetting process" went on at CalPERS in what Scheer described as an uncharacteristic risky real estate investment for the retirement fund.
Scheer and Olson said that as investment markets staggered in recent years, CalPERS has made riskier investments in order to meet its pension obligations. Taxpayers are liable to make up losses, making investment strategies a public concern, they said.
Page Mill was criticized for using East Palo Alto's rent-control ordinance to hike rents to unaffordable levels for the development's tenants and replacing them with renters who were able to pay market rates. Scheer said the tactics contradicted with CalPERS' stated policy of making socially responsible investments, another factor in pursuing disclosure.
CalPERS "claimed to have been blind-sided" by Page Mills' collapse, Scheer said. The record will help verify that, he added. Nineteen other investors — but not CalPERS — have sued the developer for fraud in Santa Clara County court.
In refusing to release all the investment records the coalition sought earlier this year, CalPERS cited a state law restricting access to details concerning public investments in hedge funds and with venture capitalists.
But Woolard ruled that the law didn't apply to a traditional real estate investment like Page Mill.
She also wrote that though Page Mill officials asked that some documents be considered private, it does not trump the public's right of access.
"Assurances of confidentiality cannot convert public records into private records," she wrote. "CalPERS cannot allow Page Mill or another party to control the release of information."
CalPERS also claimed that there was little public interest in disclosure, but Woolard rejected that claim, writing, "This is not a good case for asserting interest in nondisclosure because the investment in question is now largely defunct with CalPERS losing the amount it invested."