CalPERS CEO Marcie Frost has been waging a concerted battle to keep her job after we documented multiple misrepresentations she made during and after she was hired at CalPERS, as well as misrepresentations made in her own handwriting on a 2013 form filed under penalty of perjury in the state of Washington. As Los Angeles Times reporter Mike Hiltzik stressed last week, .
In another sign of questionable leadership, Frost has been reactive when her own professional survival is at stake. As we’ll discuss below, Frost has been personally soliciting letters of support from organizations that are close to CalPERS. The fact that I am hearing about it at my considerable remove says people see this behavior as crass. In addition, a union leader issued a letter of support for Frost on behalf of other unions, when at least one was not consulted and not happy about that.
But first matters first, which is the desperate-looking enlistment of professional help.
Panicked hiring of a PR firm. We received this message from a CalPERS insider last Thursday:
Today, CalPERS was trying to hire a PR firm to do damage control against the media – i.e., you. They raced around this afternoon getting signatures for approval so they could hastily get someone in place. Not sure of any other facts yet – but Kim Malm was doing the running around to make it happen.
First, as we have repeatedly said, CalPERS senior management and its board appear determined to double down on poor governance, weak controls, repeated instances of failure to act in accordance with their fiduciary duty, and casual lying. Rather than tackle deep-seated problems, CalPERS has convinced itself that more liberal applications of porcine maquillage will suffice.
But second, it’s sheer ineptitude to be bringing in a professional flack now. The bad news horse has left the barn and is now in the next county.1 Specifically:
– How can CalPERS not have a PR firm capable of doing damage control on retainer already? And if they aren’t up to this task, why weren’t they replaced long ago?
_ CalPERS has made so many mistakes and created so many additional bad facts that it is hard to see how a media fixer could clean things up. CalPERS’ communications staffer Wayne Davis was first telling reporters that I was “crazy,” which only served to tell the press that CalPERS could not dispute anything I had published. The next line was for Board President Priya Mathur and Vice President Rob Feckner to depict us as “spiteful” while CalPERS confirmed our reporting by admitting that Frost had not taken any classes at The Evergreen State College since 2010, and later, that she’d only attended for two quarters.
Then CalPERS’ Davis tried lying for Frost, saying he was the source of the misrepresentations in CalPERS’ press release and on its website, which still failed to explain the misrepresentations on the Heidrick & Struggles resume and on the 2013 form in Washington. The Financial Times shredded Davis’ claims, showing among other things that Frost was actively involved in the rollout of her hiring announcement.
Just last week, awfully late in the game, Frost has now tried claiming that Heidrick & Struggles wildly misconstrued her statement of a fond wish to eventually get a degree. Good luck with that. CalPERS is now way ahead of the Bush Administration’s rate of generating pretexts for the war in Iraq.
Shorter: It’s hard to see how a PR firm can counter the hash CalPERS has already made of things.
– If they are instead hiring an online “reputation defender” firm, good luck with that. Even small businesses have found they do as well on their own implementing strategies to try to crowd out negative information online as they could by hiring consultants. Reputation defense is, at its core, a war of attrition. So if CalPERS with its large, in-house communications team isn’t able to accomplish this task, it is questionable how much difference an outside firm could make.
Frost’s personal muscling of members of the CalPERS network for supportive press releases and letters. Frost has been trying to orchestrate a show of support to offset the deserved negative press she has been receiving. Someone with knowledge of her efforts compared it to a high school teacher who is up for dismissal by the school board because he leaked the questions to a statewide exam to his students in advance getting his students to lobby their parents to tell the board how much the kids like him and what a great teacher he is.
But what Frost is doing is even worse, since in many if not all cases, she is using CalPERS’ assets, namely, its reach and its resources, for her personal benefit.
Frost called both the head and the lobbyist of one influential group which has CalPERS staff participate at some of its events to ask the organization to issue a press release expressing support for her as CEO. At a second group, Frost has dangled the possibility of hiring its lobbyist to work for CalPERS, even though the unions would be sure to bar his appointment. Not surprisingly, his organization has issued a statement backing Frost.
Issuance of Labor Coalition letter of support by David Low without the backing of members. On September 5, the Executive Director of the California School Employees Association David Low sent a letter to CalPERS board president Priya Mathur on the letterhead of the Labor Coalition. The Labor Coalition is a longstanding, influential group of California labor lobbyists….even though the organization does not have a website or an office, and may not even have a formal organization.
When I received a copy of the letter on September 6, I knew it was intended for use by Adam Ashton of the Sacramento Bee, so I was not surprised to see it serve as the centerpiece of a September 14 article, which was originally titled, , but the current title is
The wee problem is that some, and perhaps many, of the 28 members of this organization did not consent to Low’s issuance of this letter.
We published the post that Low takes issue with and quote in his letter on the Tuesday before the Labor Day weekend. Low could not have begun drafting his missive until he had read my post, yet his letter went to CalPERS on the Wednesday after Labor Day. Given the intercession of the long holiday weekend, it is hard to see how Low could have circulated the letter to all the 27 members in addition to his union and gotten their consent in such a short time.
So it should come as no surprise that I received this e-mail from a board member of a reasonably large union in the Labor Coalition roster:
When the Dave Low letter was orchestrated and released, I immediately pointed it out to my board – we found out about it by receiving it days after its inception. Not one board member knew anything about Low’s letter.
I have asked some of our board members to send a letter to Low to find out what the heck is going on. That discussion has been postponed because some of our board members do not want to be perceived as negative against CalPERS. Under the table though, there is talk about the way in which Low is pushing his agenda.
Finally, I’m unaware of others in the coalition that are supporting Low.
And from a later e-mail:
I’ve asked around my s in CSEA and in my own union – no one is even aware of this letter that Low created to support Marcie. My lobbyist said he did not receive an individual request to write a letter in support of Frost.
We think that the effort to support Frost’s image is coming from Low and the lobbyist CHSWC member . Possibly SEIU also. They are the folks that work closely with running their favors through Priya and Rob Feckner.
There is no comrade collaborative approach to support Marcie in my organization.
It is hard to prove a negative, but one important union being kept completely out of the loop is significant in and of itself.2
Moreover, the power implications of Low presenting himself as the labor’s savior of Frost, if she survives the resume controversy, are not pretty. As one former California state official put it. “Dave Low will own Marcie.” It’s one thing for a significant and legitimate interest group like the labor unions with CalPERS members to have a seat at the table. It’s quite another for the leader of one union to be calling the shots.
The implication is that with Frost orchestrating this display of support, the exercise is now tainted. There’s no way for the CalPERS board to know how much of this is genuine, versus cynical efforts to get leverage over Frost in an hour of weakness or compliance by people who are afraid of the consequences of not having backed her if she survives. How many people will Frost owe big favors if she manages to get through the next few months? And how can it possibly be good for beneficiaries and California taxpayers to have them demand repayment from CalPERS?
.1 Unless CalPERS is expecting more negative exposure.
2 I ed Low with questions about whether he had issued the September 5 letter in a personal capacity, and if so, why the letter had not made it clear, and if not, why had he not consulted all the members of the Labor Coalition before sending his letter. I did not receive a response by the time I launched this post. I will update it to incorporate any information and/or comment by Low.