WASHINGTON—California Public Employees Retirement System (CalPERS) officials failed to answer a congressmans questions about its Chief Investment Officers (CIO) links to a Chinese program the FBI says is a spy tool.
“CalPERS failed to answer two fundamental questions raised in my letter to Governor [Gavin] Newsom,” Rep. Jim Banks (R-IN) told The Epoch Times Friday.
Banks was referring to his Feb. 12 letter to Newsom concerning CalPERS CIO Yu Ben Mengs “long cozy” relationship with the Chinese Communist Party (CCP).
“First question: Is Mr. Meng a member of the Thousand Talents Program, something the FBI called a non-traditional espionage program?
“Second question: Since Meng came back as Chief Investment Officer of CalPERS, has CalPERS invested in companies that are affiliated with the Chinese Peoples Liberation Army?”
The Indiana Republican also said he wants “clarification from Mr. Meng about what he meant when he told the Chinese Communist rag Peoples Daily that his roots were in China, and why he said that if he got an opportunity to serve the motherland, such responsibility and honor cannot be compared to anything.”
Banks said CalPERSs massive investments in China were estimated in 2018 to be $3.1 billion in at least 172 Chinese firms. He also noted that Secretary of State Mike Pompeo recently told a meeting of the nations governors that included Newsom that CalPERS “is invested in companies that supply the Peoples Liberation Army (PLA) that put our soldiers, sailors, airmen, and Marines at risk.”
Banks further said in his letter that “CalPERS holds shares of China Communications Construction Co. (CCCC), which has constructed PLA naval bases in the South China Sea, and in China Shipbuilding Industry Corp., a state-owned enterprise, and the largest manufacturer of Chinese naval ships.”
CalPERS is the largest defined-benefit public employee pension program in the United States, claiming an estimated $400 billion in assets managed on behalf of more than two million workers, retirees and other beneficiaries.
As a defined benefit program, CalPERS promises pensions equal to a certain percentage of a retired California public employees salary. Most corporate and government pensions are based on defined contributions by the employee, with the level of benefits then determined by the return on investment of the contributions.
Marcie Frost, CalPERSs chief executive officer, hired Meng in September 2018. She said in a Feb. 20 response to Banks that “CalPERS holds $200 billion in stocks from companies based in nearly 50 countries, including the United States. Approximately 1% of our total fund is invested in Chinese companies and passively managed through our indexed public equity portfolio.”
Firms in those portfolios are selected by index managers, not CalPERS, she noted, and she said her program does not invest in any foreign companies that are not approved by the U.S. Department of Treasurys Office of Foreign Asset Control (OFAC).
Frost, calling Banks claims “baseless accusations,” said CalPERS “has a duty to seek returns in the market sufficient to meet the pension obligations to its beneficiaries, not to promote a policy agenda of any persuasion through its investment strategy.”
A spokesman for Banks said his office has received no response from Newsom. Two members of CalPERS 13-member governing board are appointed by Newsom, with one jointly named by the Speaker of the California Assembly and the state Senates rules committee.
Newsom also chooses two individuals — the director of Californias Department of Human Resources and an individual from the State Personnel Board — who are ex-officio board members.
CalPERS spokesmen did not respond to The Epoch Times request for comment.
The pension program has only funded 67 percent of its promised benefits, according to calculations based on public reports by Truth-in-Accounting (TIA), a Chicago-based non-profit thRead More – Source