Calpers probes ex-director

The California pension fund is reviewing fees it paid to an advisory firm run by Al Villalobos, who had served on the Calpers board from 1993 to 1995. From the press release:

The review was sparked by the recent receipt of information provided to Calpers by investment funds that reported their payment of more than $50 million in fees over a five-year period to Arvco Financial Ventures LLC, a placement agent firm headed by former Calpers board member.

WSJ reports that Arvco recommended some of Calpers's poorly performing investments; last year the pension fund lost nearly a quarter of its value and more than $50 billion. Last month came word of the state Fair Political Practice Commission looking into campaign contributions that Arvco made to longtime Calpers member Charles Valdes, who was running for reelection to the Calpers board in 2005. Here's that story from Pensions & Investments and here's more background from the Journal:

The general concern among regulators and funds is that choices about who should invest public employees' retirement money is influenced by factors like money and politics rather than an investment manager's merits.