By Ed Mendel
June 6, 2016

A former CalPERS chief executive officer, Fred Buenrostro, was sentenced to 4½ years in prison last week for taking bribes, including $200,000 in cash, from a former CalPERS board member, Alfred Villalobos, who collected about $50 million in fees from private equity firms for helping them get investments from the big pension fund.

Villalobos died from a pistol shot to the head at a Reno gun range in January last year, an apparent suicide on the day before a scheduled court appearance. His inside man at CalPERS, Buenrostro, pleaded guilty on the eve of his trial in July 2014 and has been cooperating since then with state and federal prosecutors.

Assistant U.S. Attorney Timothy Lucey told a federal court in San Francisco last week that Buenrostro, after his guilty plea, went on “to assist the government in a number of ongoing investigations the court is aware of through the filings that have been made to the court, both the public filings and the sealed filings.”

Buenrostro’s attorney, William Portanova, told the court that his client “took the investigation to a level far beyond that which his own case involved” and that information in the sentencing memorandum and sealed documents “touches on some of these larger investigations.”

U.S. District Judge Charles Breyer noted that Buenrostro’s cooperation resulted in refiled charges before his guilty plea that reduced the maximum sentence from ten years to five years. He disagreed with Lucey and Portanova that cooperation since then merited an additional one-year reduction, instead cutting six months for a total of 4½ years.

Breyer, quoting Lucey, said Buenrostro committed “a spectacular breach of trust for the most venal of purposes, which is self enrichment.” Buenrostro had years to turn back but chose to “double down,” said the judge, calling it “a dagger in the heart of public trust, and without public trust our government institutions cannot function.”

Buenrostro, 66, balding head slightly bowed, shuffled into court in faded blue pajama-style prison garb, with day-glow orange footwear and his legs apparently shackled together by a short chain not visible from the back of the court room.

“Your honor, I take full responsibility and accept the consequences of the actions I took,” Buenrostro said in a firm and clear voice. “I’m humiliated, embarrassed, and deeply ashamed of my actions.”

Asking mercy, Buenrostro said he “let down” family and friends and apologized to CalPERS, the court, prosecutors, and his fellow Californians. He said he assisted the U.S. Attorney, the Securities and Exchange Commission, and the state Attorney General “in their investigation and litigation and will continue to render assistance.”

So, what’s still being investigated? There were few public clues last week.

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