writ of mandate aurora advisors v. calpers

8/12/2019 Writ of Mandate Aurora Advisors v. CalPERS

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mailto:[email protected]:[email protected]


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funds in which CalPERS is an investor. Previously

information was provided by CalPERS to the author

publicly-available academic article (the article

systematically delayed disclosing any records wha

Petitioner. When CalPERS finally did disclose rec

data pertaining to 2012 and 2013 only. CalPERS p

that the data it disclosed is consistent with Pet

request. Petitioner strenuously disagrees. CalPER

undermines article I, section 3(b) of the Califor

Constitution, which opens government records to p

scrutiny. Petitioner seeks to shed light on wheth

has been a responsible steward of public employee

funds.

FACTS AND PROCEDURAL HISTORY

2. Petitioner Aurora Advisors Incorporated (Aurora

York corporation. Based in New York City, Aurora

management consulting firm. Its areas of expertis

financial services and corporate finance advisory

publishes Naked Capitalism, a blog edited by Susa

(Ms. Webber), Auroras President. The blog has

page views a month and has over 250,000 monthly u

viewers. Ms. Webber is a respected journalist, wr

the pen name, Yves Smith. Her blog ranks at or ne

various analyses of financial and economic blog i

no small part due to the fact that she has an act

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readership among financial regulators and members

Forinstance, her site was the only blog mentioneFDIC chairman Sheila Bair's book, BULL BY THE HORNS

been instrumental in a regulatory battle. During

2010, Ms. Webber was part of a a small group of o

influential economics bloggers who met with Treas

Timothy Geithner. Ms. Webber also has many years

working in finance at an elite level. As a former

Sachs investment banker, McKinsey consultant, and

mergers & acquisitions of Sumitomo Bank, she is p

qualified to analyze and comment on practices in

privateequity industry, and intends to use the din an ongoing series of publications on private e

3. On or about 29 September 2013, Ms. Webber contact

via a webpage form to request certain private equ

data provided by CalPERS to researchers Jenkinson

4. On 16 October 2013, receiving no response, Ms. We

contacted CalPERS via the website form, tracking

(See Exhibit A). Ms. Webber had examined a public

PRA log of all requests received in September 20

found a record of her request. She sought confirm

CalPERS had 1) received her original 29 September

and 2) an explanation of why the request did not

PRA log for September.

5. Within 24 hours, Barbara Galli, Public Records A

Coordinator, replied on behalf of the CalPERS Off

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she would follow up with the Information Technolo

to see if there were any glitches. In the meant

requested that Ms. Webber email her with the requ

Ms. Galli wrote that she would then begin the pr

fulfilling [Auroras] request.

6. On 12 November 2013, after realizing that a long

passed since her inquiry, Ms. Webber searched for

reply and found it in her spam filter. Nonetheles

replied to Ms. Galli. (See Exhibit C). Ms. Webber

requested a copy of the data that was provided by

the authors of the aforementioned article. Additi

indicated that if CalPERS chose to deny her reque

data, then she also requested all of the corresp

between CalPERS and the study authors that relate

or their request for it. Ms. Webber explained th

use the data to attempt to replicate the authors

and publish the findings on her blog, Naked Capit

also requested copies of any executed confidentia

agreements that restricted the authors use of th

7. On 5 December 2013, having no reply from CalPERS

again contacted Ms. Galli via email. (See Exhibit

time Ms. Webber also left a voicemail message for

8. On 12 December 2013, CalPERS published its list o

PRA requests, and Auroras was not listed. (See E

Upon discovering that her request was not listed

placed a call to Ms. Gallis phone number, obtain

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9. On or about 2 January 2014, Ms. Webber received

CalPERS, dated 18 December 2013. The letter indic

CalPERs was working on the request and would prov

documents to her by 27 December 2013. Specificall

claimed that its staff continued to gather[] and

responsive information for disclosure... (See Ex

Roughly 2 months had elapsed since her initial re

10. On 16 January 2014, Ms. Webber had still received

from CalPERS. She sent an email to Ms. Galli yet

requesting an update. (See Exhibit G). Ms. Webber

again called Ms. Gallis office, and receiving no

a voice mail.

11. On or about 27 January 2014, CalPERS sent a lette

Webber regarding the outstanding records request

H). CalPERS position at that time was that the

provided to the authors of the article was not pr

CalPERS staff. CalPERS claimed to have nothing t

and considered the matter closed. This was in dir

contradiction to the 18 December 2013 letter quot

paragraph 9 of the instant Petition. The statemen

the category of technically true, but misleading

course, it leaves open the strong likelihood that

generated was provided by agents of CalPERS.12. CalPERS' response was evasive because it avoided

datathat is owned by CalPERS andgenerated by ordirection of CalPERS and/or its agents. It is wel

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even if the data were provided by agents of CalPE

still be disclosable under the PRA.

13. On 1 February 2014, Auroras attorney, Timothy Y

a letter to CalPERS, protesting the closure of Pe

Public Record Act request. (See Exhibit I). Mr. F

that the 27 January 2014 letter contradicted CalP

letter of 14 December 2014. He again requested th

release the data previously provided to the autho

article.

14. On 4 February 2014, CalPERS counsel, Robert Carl

Mr. Fong via telephone. In response to Mr. Fongs

February 2014, Mr. Carlin, explained that CalPERS

records of contact with the authors of the articl

that if Ms. Webber could put together specific p

that she was interested in, then CalPERS would p

records.

15. On 8 February 2014, Mr. Fong responded to Mr. Car

letter. (See Exhibit J). Mr. Fongs letter noted

request was for private equity data that was pro

authors and researchers in [the article] located

papers.ssrn.com/sol3/papers.cfm?abstract_id=22295

"How Fair are the Valuation of Private Equity Fun

from the article, Fong detailed the specific data

flow, valuation and performance data for the enti

and historical portfolio of 761 private equity fu

in by Calpers [sic]... The article authors recei

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547


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16. Additionally, since Mr. Carlin had extended his

assistance, in the same letter of 25 February 20

also requested all 2012 data and all available 20

(presumably at least through 30 September 2013 an

quarter and fourth quarter end data if available

specifically excluded any real estate funds from

17. On 20 February 2014, Mr. Fong received a letter

dated 12 February 2014. The letter was signed by

Evans, Manager, Strategic Events & Outreach, Offi

Stakeholder relations. Accompanying the letter wa

Exhibit K).CalPERS did not provide the data dati

1990. Instead, it ignored Auroras repeated reque

private equity data that was provided to the auth

article. (See Exhibit J). Instead, CalPERS only p

for 2012 and available 2013 data. CalPERS did pro

cash flows on specific dates, data that has not b

available on its website.

18. Aurora had requested the 2012 and 2013 data in ad

data from 1990 through 31 March 2012. CalPERS did

said data, and provided no objections. Rather, it

failed to disclose it at all.

19. CalPERS indicated that it considered the matter c

However, it is inconceivable after repeated writt

that CalPERS could misconstrue Auroras request.

20. As of 12 February 2014, almost 5 months had passe

Webbers first request. CalPERS has failed to com

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Public Records Act request within 24 days. CalPER

Webbers 29 September 2014 request. CalPERS in fa

over a month to reply to Ms. Webbers 12 November

21. CalPERS may claim that it misunderstood Mr. Fong

2014 letter to be solely a request for 2012 and 2

However, CalPERS is barred from that assertion, b

published a PRA Summary Report for January 2014.

L). In that log, Auroras request of 27 January 2

described as [a] copy of the data that was provi

CalPERS to the authors of the article at this lin

papers.ssrn.com/sol3/papers.cfm?abstract_id=22295

is the basis for that article. The data is a set

equity returns over time for funds in which CalPE

investor. Clearly, CalPERS understood exactly w

Petitioner sought, and continues to seek.

22. Despite Auroras repeated requests for the record

September 2013, CalPERS has stonewalled at every

way, even when it appears to comply.

23. The public has a fundamental and necessary intere

learning the returns that CalPERS has received on

investments, and in whether calculations of same

and repeatable. This is because CalPERS is invest

of millions of California public employees, and s

therefore be accountable to the public.

24. Ms. Webber seeks to replicate the findings and a

article authors. The public has a compelling inte

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2229547


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REASONS FOR GRANTING WRIT

25. Petitioner applies for the writ of mandate under

California Public Records Act, Government Code se

and 6259, which is the PRAs enforcement mechanis

has no plain, speedy and adequate remedy in the o

course of law to secure release of the records so

than the instant Petition.

26. The subject records sought in the instant Petitio

to shed light on the conduct of the peoples busi

Government Code 6250 and article I section 3(b

California Constitution, both of which grant Peti

right of access to the records.

27. The subject records are not exempt from disclosu

Government Code 6254.5. The rule is that when a

discloses a public record which is otherwise exe

any member of the public it waives its ability t

records. The provision applies not only to employ

agency, but also to agents. In the instant case,

records have already been disclosed to Jenkins, e

authors of a publicly-available article, as discu

paragraph 1 of the instant writ.2

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WHEREFORE, Petitioner prays as follows:

1. That CalPERS be ordered to release the records so

Exhibits C, I, and J.

2. Alternatively, that the court order CalPERS to sh

the records should not be released, and thereafte

records released.

3. For an aware of attorneys fees and costs pursuan

Government Code 6259(d); and

4. For such other and further relief as the court m

and proper.

Dated: ________

______

T

Attorneys

Aurora Advisor

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EXHIBIT A


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EXHIBIT B


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EXHIBIT C


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EXHIBIT D


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From:Susan Webber Date:December 5, 2013 8:16:04 PM ESTTo:

Barbara Galli Subject:Fwd: Public Records Access Request SubmissionMs. Galli,

I sent this request more than three weeks ago. My understanding is that under California lawrequired to reply in ten days. I have checked my inbox and do not see any response.

I would appreciate you getting back to me on this outstanding matter.

Cheers,

Susan
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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EXHIBIT E


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EXHIBIT F


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EXHIBIT G


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From:Susan Webber Date:January 16, 2014 7:20:18 AM ESTTo:Barbara Galli Subject:Seeking update on private equity data request #1385Dear Ms. Galli,

I received your letter dated December 18, 2013, stating you expected me to receive the inforequested by December 27, 2013.

As of January 15, 2014, I have not received anything from your office, which suggests your tchanged.

Have you sent the information? if so, when was it mailed? And if not, when do you expect to

Thanks for your help,

Susan
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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EXHIBIT H


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EXHIBIT I


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Data held by agents of CalPERS is still disclosable. The rule in California is

burden is on a public agency to demonstrate the need for nondisclosure.ACSuperior Court, 202 Cal. App. 4th 55 (2011). In that case, the court held thattest was whether the public interest served by withholding records clearly opublic interest in disclosure. Id. at 66. InACLU, the plaintiff sought records death penalty drug companies. The California Department of Corrections an

Rehabilitation (CDCR) argued that disclosure of the identities of the compawhich it obtained execution drugs put companies at physical risk, due to the controversial nature of the death penalty. However, the court found that CDC

submitted no evidence of the risks, which the court characterized as unspeccourt therefore ruled that public interest in disclosure outweighed CDCRs ob

In the instant case, there is an overwhelming public interest in the subject daCalPERS has no legitimate interest in hiding data that has already been theanalysis published by respected academics. Their main conclusion regarding

was that it indicated systematic overstatement of returns by private equity fcourse of marketing of their funds to CalPERS. The data appear to suggest

CalPERS beneficiaries have been victimized by such fraud on dozens, if notof occasions, negatively impacting the value of their pension fund. Release opresents zero risks of personal harm; at the very least, far less than the exe

records inACLU v. Superior Court.

There is certainly no public interest in CalPERS hiding the systematic victimretired public employees by private equity fund sponsors. CalPERS may verperceive that its institutional interest is best served by hiding the fraud, since

may blame the agency for allowing itself to be victimized so repeatedly. The the same thing, and in this case, diverge sharply. I have every confidence tpublic, which includes my client's many thousands of daily readers,California lawmakers, and the courts, are capable of recognizing this distinct

It is also clear that in the instant case, Govt. Code Section 6254.26 exemptidisclosure do not apply. You have tacitly conceded this reality by resisting dimisleading statements, rather than claiming the Section 6254.26 private equ

exemptions. As described in the paper based on the data, the data consistscash flow and NAV information that is specifically disclosable pursuant to 62through 6254.26(a)(5). Moreover, by providing the information to researcheunderstanding that they would publish research based on the data, it has cle"already been publicly released. Per Section 6254.26(a), that would void thof any exemption from disclosure that might otherwise be available


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EXHIBIT J


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EXHIBIT K


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EXHIBIT L


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2.A3'6H46232

'-.%/0%-*)#'12

Date

Received

g

12/6/2013

11/19/2013

11/11/2013

1/10/2014

6/28/2013

10/7/2013

1/2/2014

f

10/8/2013

1/8/2014

10/15/2013


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writ of mandate aurora advisors v. calpers

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