To: NWebman@crain.com, BBurr@crain.com
From: James McRitchie <jm@corpgov.net>
Subject: letter to the editor
Cc: SHemmeri@crain.com
Steve Hemmerick's "Gag Rule: CalPERS disallows thorny questions," failed to note that State Controller (not Treasurer) Kathleen Connell's campaign committee is suing CalPERS over their policy which prohibits the treasurer and controller from accepting campaign contributions from those doing business with the system. The policy does not apply to Ms. Connell's challengers in the current election, or to the governor or legislative leaders who appoint additional members to the board.
When William Crist, president of the CalPERS board, asked Charles Valdes, chairman of the investment committee, to rule State Controller Kathleen Connell's representative out of order for questioning money management executives about political contributions, he continued enforcement of a double standard with no legal standing.
The irony is that CalPERS is viewed an effective leader in the area of corporate governance... seeking independent boards with high moral standards. Yet, the ethical policies it chose to adopt for its own board consisted largely of unenforceable window dressing in violation of several laws.
Had the policies gone through the legally required rulemaking process, CalPERS would likely have adopted more modest conflict of interest regulations with regard to political contributions and stronger regulations with regard to the gifts which P&I has editorialized against. As it is, the court will likely throw out the rules regarding political campaign contributions but will probably leave the weaker gift policy standing, since Connell's campaign committee did not ask the court to address that issue.
Sincerely,
James McRitchie, Editor
Corporate Governance
URL: http://www.corpgov.net
e-mail: jm@corpgov.net
Contact: 
jm@perswatch.net