February 28, 2014 [Board Member] Board of Administration CalPERS Lincoln Plaza North 400 Q Street Sacramento, CA 95811

Dear [Board Member]: In light of your duty for the management and control of CalPERS, I wanted to call to your attention repeated and troubling violations of CalPERS policies and state law in the handling of a California Public Records Act request that I first filed last September. By way of background, I publish the widely-read finance and economics website, Naked Capitalism (www.nakedcapitalism.com). Naked Capitalism receives roughly 1.5 million page view a month and has been ranked at or near the top among financial blogs in terms of its traffic and influence. In particular, this website has a strong following among financial regulators and on the Hill. We are in the midst of an original series on the private equity industry. As you may know, once an agency has given out a record to one member of the public, it has forever waived the right to claim any exemption from disclosing the records to others. I have requested CalPERS private equity fund data which was the basis for an article written by three academics at Oxford University: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547. The article stresses that the researchers obtained the entire performance history of all of CalPERS 761 investments in private equity since it began committing funds to it in 1990, including actual cash flow data, and that much of the information has not previously been accessible to researchers. My efforts to obtain this data have been met with delays, obfuscation, and flat out falsehoods. I made my first FOIA request on September 29, 2013 and received a tracking number, 1385. However, in early October, I checked the CalPERS log and did not see my request included with the September requests (https://www.calpers.ca.gov/eipdocs/about/committee-meetings/agendas/full/201310/item11-attach-2.pdf). I used the FOIA form on October 15, 2013 to ask why my request was not listed and what had become of it. Barbara Galli, a CalPERS public records act coordinator, e-mailed to say she had no record of the request and asked me to resubmit it via e-mail. Because her e-mail reply was misidentified by my computer as spam, I did not respond until November 12, 2013. My request was again not listed on the roster in November (http://www.calpers.ca.gov/eip-docs/about/committeemeetings/agendas/full/201312/item11-attachment-2.pdf). Mind you, at this point, my request has been outstanding for two months, yet the CalPERS PRA staff was withholding that information from the board and the public.

I made calls and sent e-mails to Ms. Galli in December as to why my record continued to be missing and got not reply. However, she did send a letter dated December 18, 2013, which stated: Staff continues to gather and review responsive information for disclosure under the Public Records Act. We estimate having the information to you by December 27, 2013. However, I did not receive any information or other communication by December 27 or by early January. So again, the board continued not to be informed as to the existence of a PRA that was supposedly on the verge of completion. In January, I made further calls and sent additional e-mails to find out what had happened to the information I had been promised. Note that the letter I had been sent encouraged me to call, yet despite leaving voicemails, I got no reply. On January 30, 2014, my attorney, Timothy Fong, sent a letter to Deputy General Counsel Gina Ratto. It recited this history in more detail, with supporting documents, and indicated that if the information was not forthcoming, I was prepared to petition for a writ of mandamus and seek an award of attorney fees and costs. In reply, Ms. Galli e-mailed a letter dated January 27 signed by Linda Evans which had been sent certified mail. It stated: The information provided to the authors of the article you referenced was not provided by CalPERS staff. After an extensive search, staff has determined we do not have anything to produce in response to your request. This response is patently false. I have e-mailed the lead author of the article, Timothy Jenkinson, who has stated in two separate e-mails that the data came directly from CalPERS, and that CalPERS dealt directly with him and one other named author of the article, Ruediger Stucke. Thus, either the search was not extensive or if it was, CalPERS chose to misrepresent what it unearthed. Moreover, the response is deliberately evasive and misleading. My request was for data provided by CalPERS, not data provided by CalPERS staff. It may be that the data was transmitted from LP Capital or another data repository at the direction of CalPERS employees, rather than being retrieved from a data warehouse to CalPERS staffers and then sent on to Jenkinson and Stucke. Nevertheless, it is well-settled California law that actions taken by agents within the scope of their agency are imputed to the principal. Thus, even if as a matter of form, the data was provided directly by LP Capital or another CalPERS data repository to Jenkinson and Stucke, it would still be disclosable under the PRA. And the board and the public were again misled. My PRA was finally included in the January 2014 log (http://www.calpers.ca.gov/eip-docs/about/committeemeetings/agendas/full/201402/item10-attachment-2.pdf) and listed as the last item, as closed. In fact, my attorney wrote a to Barbara Gatto on February 1, 2014, strenuously objecting to the claim that PRA was closed. He then received a call from one Robert Carlin

indicating that CalPERS would comply with the request, provided we identify more specifically what records we wanted. Carlin wrote in an e-mail on February 13, 2014 that the records he was sending were too large to be sent as an e-mail attachment, so they were going out that afternoon via CD. In fact, the records were a mere 3 MB, which could easily have been sent via e-mail, so it appears that sending the information by mail, which took nine days to arrive, was yet another delaying tactic. Most important, the CD contained none of the records we had originally requested (the data provided to Jenkinson and Stucke) but some additional data we had asked for (on the premise that it was updating the Jenkinson/Stucke data from the period covered in their paper, 1990 to March 31, 2012, to the present; if the sort of data that Jenkinson and Stucke received was disclosable, we could request the updated information via a separate FOIA). We did, however, get some non-public information (actual date of receipt of cash flows from various private equity funds, information that is not published in CalPERS quarterly updates). Now perhaps my assumption is incorrect and the board supports this sort of misrepresentation to the public in order to defend CalPERS relationships with private equity funds and limit the scrutiny of its history of investing in private equity. However, the interests of CalPERS staff are not at all the same as the interest of CalPERS as an institution. CalPERS duty above all is to the members whose funds it invests. It should recognize that the interests of vendors like private equity funds are often adverse to their aims. As far as the public record is concerned, CalPERS staff pronounced my FOIA to be closed on January 27,2014, the date of the misleading the "we don't have anything to give you" letter. One can only surmise that the intention of failing to publish the existence of my FOIA until it had been incorrectly deemed closed (I have filed suit against CalPERS today as discussed longer form on my website (http://www.nakedcapitalism.com/2014/02/sue-calpersdenial-private-equity-public-records-act-request.html), so I trust your February log will mention the litigation) was to stymie other requests for public equity return data. Should anyone in the future ask for the records that they gave me, CalPERS staff can supply January 27, 2014 letter and say, "This was our official response," which would lead that future requester to think that nothing was provided. If as in my case, the original requester continues to press the matter, CalPERS staff can later slip the records to them without entering it into their official log so that future requesters can't readily find out that the requested records were in fact provided. Is standard operating procedure to generate denials or "we don't have a record" letters for requests staff does not want to comply with? Has the board been notified of this practice? If so, by what basis under law can you justify misleading the public as to the status and resolution of PRA requests? Ostensibly, this log exists as a report to the board so that it can engage in oversight to verify that CalPERS is being responsive to public record requests. However, my experience shows that in practice, it is being used as a vehicle to mislead the public and presumably the board as well. Sincerely,

Susan Webber