Calpensions

(UPDATE: J.J. Jelincic and Cathy Hackett will be in a runoff for an open CalPERS board seat, according to unofficial results posted by Jelincic. Ballots mailed Nov. 4 will be due back Dec. 4. The unofficial results: Jelincic 71,197, Hackett 54,934, Dan Villella 34,628, Dennis Yates 25,203 and Muriel Strand 7,651.)

If Cathy Hackett defeats J.J. Jelincic, a large and aggressive labor union, the SEIU, will have backed the winner in the last three well-financed races for CalPERS board seats.

The ascendancy of the SEIU may have more to do with infighting in the labor movement than the creation of a faction or voting bloc on the 13-member California Public Employees Retirement System board.

But the Service Employees International Union, which split from the AFL-CIO four years ago over the long-term decline in the union movement, often takes a confrontational stance and has clashed with several California unions.

The SEIU is interested in retirement issues. The powerful union is a major part of a new organization, Retirement USA, that will hold a conference in Washington, D.C., on Oct. 21 to consider proposals to supplement Social Security.

What impact, if any, the SEIU’s backing of yet another winner would have on the CalPERS board is not clear. The board’s public discussion and votes have tended toward consensus this year, with few outward signs of ongoing factional splits.

But if a candidate with Jelincic’s record of labor leadership and strong backing from other labor groups is defeated, the SEIU may cement its position as one of the most powerful forces in future board races, if not a kingmaker.

The CalPERS board, among other things, has the sweeping power to set annual payments that the state and 2,500 local government agencies must make to the retirement funds for their employees.

The board also sets “ESG” investment policy (environmental, social and corporate governance) that can help shape the nation’s future. The CalPERS investment fund, plunging to $160 billion after the market crash, had rebounded to $200 billion by last week.

Hackett and Jelincic are the two major candidates for a four-year term in a seat being vacated by Charles Valdes after 25 years. It’s one of two “at large” seats where all active and retired CalPERS members are eligible to vote, about 1.3 million persons.

Getting a campaign message to an electorate of that size is a big problem for candidates. Voter turnout has been about 20 percent or less in recent elections in the at-large seats.

Eligible voters receive a “candidate statement” submitted by each candidate and distributed by CalPERS. But a key to campaigns are endorsements from labor unions, which can reach voters through their newsletters, meetings, websites and phone banks.

Hackett’s backers include the biggest state worker union, SEIU, Local 1000, representing about 70,000 state workers, and the California School Employees Association, the non-teaching school workers who are a third of CalPERS members.

Jelincic’s endorsements include two major retiree groups, California State Employees Association retirees and Retired Public Employees Association, and a number of smaller state unions representing firefighters, supervisors, scientists and engineers.

At the end of August, Hackett reported campaign contributions totaling $56,704, about $40,000 from more than a half dozen SEIU units. Jelincic reported a total of $41,724, most from various union groups.

Additionally, an independent committee supporting Jelincic sponsored by the American Federation of State, County and Municipal Employees reported contributions totaling $74,812.

Hackett rejected a suggestion that she might be facing an anti-SIEU coalition that may outspend her campaign. She said her supporters, more groups than just the SEIU, are adequately backing her candidacy through their publications and other means.

At a candidate forum in early September sponsored by James McRitchie’s PERSWatch.net and the Sacramento Bee, said to be a first for CalPERS board candidates, Hackett did not appear.

“I had already made a commitment on that particular date (Sept. 2),” said Hackett, who said she was on the campaign trail in Redding. “I have been going around to a lot of different work sites.”

The apparent frontrunner in the race for the other at-large CalPERS seat, current board member Kurato Shimada, also did not attend the forum. He is endorsed by the SEIU and the California School Employees Association.

Jelincic appeared at the forum, knowledgeably answering questions in detail and picking up at least one supporter.

“I’m glad I’m not running against J.J.,” Shimada’s opponent, Inderjit Singh Kallirai, said at the end of the forum. “I have a lot to learn from him. His financial experience makes me happy I’m not running against him.”

Hackett and Jelincic both responded to ten questions posed earlier this year by PERSWatch. (To see responses, click here.)

Hackett is a budget analyst for Caltrans. But for the last decade she has been on leave while serving as full-time vice chairwoman of the largest bargaining unit in SEIU, Local 1000, about 44,000 members.

Jelincic is a 23-year employee of CalPERS, an investment officer currently working on real estate. If he is elected to the CalPERS board, he would have to discuss his working arrangement with management.

The two candidates are long-time acquaintances. In 2003, Hackett helped Jelincic win election as president of the California State Employees Association. Then in 2007 Hackett helped defeat Jelincic when he ran for re-election.

“If you look at our education, it clearly is different,” Jelincic said last week when asked how he differs from his fellow labor activist. “My education really is in finance. I have the CFA (Chartered Financial Analyst).”

Hackett‘s response to the same question: “I think my history has shown me to be a person that understands you have to have a basis of support to do anything. He (Jelincic) is more individualistic.”

Jelincic is endorsed by two current board members, Valdes and Priya Mathur. Hackett is endorsed by three current board members: Shimada, Henry Jones and George Diehr.

Jones was elected two years ago with SEIU support in a seat representing CalPERS retirees. He won a narrow victory, 52 percent of the vote, in a runoff with Perry Kenny, backed by the CSEA.

Diehr was re-elected in 2006 with SEIU support in a seat representing active CalPERS members. He received 51 percent of the vote, narrowly avoiding a runoff with Howard Schwartz, a CalPERS attorney backed by seven unions.

Six of the 13 board members are elected by CalPERS members. Two members are appointed by the governor, one by legislative leaders and the others are the treasurer, controller, the personnel administration director and a personnel board designee.

Ballots for the two at-large seats were mailed to eligible CalPERS members on Sept. 4. The ballots must be returned by Friday (Oct. 2).

In addition to Hackett and Jelincic, three candidates with no endorsements are running for the open seat: Muriel Strand, Dan Villella and Dennis Yates. If no one gets a majority, ballots for a runoff between the top two candidates will be mailed Nov. 9, due back Dec. 4.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at https://calpensions.com/ Posted 28 Sep 09

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