How Sacramento Bee Reporter Adam Ashton’s Hit Piece on CalPERS Board Member Shows He’s in the Business of Flacking, Not Reporting

Long-standing readers may recall that we’ve sometimes made projects of soi disant journalists who are actually are in the business of carrying water for powerful interests. The objects of our attention have included Andrew Ross Sorkin, Ezra Klein, and Adam Davidson. We’ve analyzed their pieces in detail not simply to demonstrate how biased their accounts were, but also to educate readers as to how to recognize planted media stories and identify the tricks writers use to make distorted reporting appear evenhanded.

Why It Has Become Necessary to Make Adam Ashton a Project

Today, we’ll look at the latest piece by Adam Ashton of the Sacramento Bee. He writes the Bee’s popular State Worker feature. Ashton holds himself out as being a reporter by virtue of hewing to the convention of balance by his appearance of presenting both sides when there are opposing interests.

However, when covering CalPERS, which is one of the main focuses of his beat, Ashton consistently runs accounts that are obviously, heavily slanted in favor of CalPERS.¹ This is a disservice to his readers in two respects, First, many are CalPERS beneficiaries and all are California taxpayers, and so they have a dog in this fight. They deserve to know what is really going on.

Second and more important, given that the CalPERS board has made clear that it regards its job as cheerleading staff rather than supervising them, CalPERS effectively has a $300 billion pot of money accountable to no one. The only body that could intervene (aside from Federal prosecutors, who put former CEO Fred Buenrostro in prison) is the California legislature. The Sacramento Bee is widely acknowledged to be the most influential media organ at the state level. Ashton writes about CalPERS far more frequently than anyone else at the Sacramento Bee. Having Ashton keep up a steady stream of CalPERS-friendly stories that don’t just minimize controversies but as we will discuss below, are fundamentally misleading, is a key weapon in CalPERS staff’s concerted efforts to thwart good governance.

CalPERS is deeply underfunded and poorly governed. It is thus no accident that new board member Margaret Brown, who is pro-worker, pro-transparency, and pro-accountability, has had staff and the board actively working to thwart her even on mundane matters. An illustration of the pettiness: Brown requested financial publications, such as the Wall Street Journal, in December. She has yet to get any. Los Angeles Times reporter Mike Hiltzik correctly called out this sort of behavior as childish.

Yet Ashton, in running his second anti-Brown piece in less than a month, misleadingly focuses on personalities when there are serious governance issues at stake and Brown is being forced to engage in a pitched battle merely to do her job. Ashton has refused to take up the fact that board president Priya Mathur denied Brown access to past closed session transcripts save as highly cherry-picked and overseen by staff. Mathur reversed herself only after Brown hired an attorney.² It is critical to understand that Mathur’s effort to hide documents from a fellow board member is a massive danger sign. A board member should be able to see any document generated by the organization they oversee.

Ashton has also failed to inform his readers that Mathur created rules, denied Brown access to past closed session transcripts (and still continues to restrict access) and administered punishments when she has no authority to do so. If Ashton were actually reporting, he could have easily verified that in CalPERS’ own published board governance policies. Apparently all he’s willing to do is take what CaLPERS feeds him rather than work up a sweat by using his mouse and keyboard.

In other words, CalPERS through its mouthpiece Ashton has been working overtime to demonize Brown rather than address the basic questions that she and her predecessor reform-minded board member JJ Jelincic asked. The fact that staff and Mathur go on full attack because a board member is unwilling to sit pat and rubber-stamp staff demands is proof in and of itself of diseased governance.

That means, as South Carolina state Treasurer Curt Loftis writes in a companion post today, Brown can expect even more ferocious attacks as she makes progress. That is because, as we’ve already seen, there is no way to reconcile standing for transparency, accountability, and taking the difficult measures needed to improve funding levels with blind loyalty to the present underperforming, self-serving senior staff members.

Ashton is thus doing his readers another disservice in his latest story, which we’ll dissect in detail, through making his main message that Brown and Mathur need to kiss and make up for the good of CalPERS. Notice that this framing has the effect of diverting reader attention from the fact that their conflict results from Mathur’s range war against Brown’s efforts to get the sort of basic information that any prudent trustee needs to perform their fiduciary duty. In other words, this battle is all about Brown insisting on doing her job as an elected official, and that alone being treated as some sort of existential threat to the CalPERS board. The intensity and lawlessness of the pushback against Brown is the real story, and one that should alarm every California taxpayer. But Ashton and presumably CalPERS want the public to see it as a mere catfight.

The good of CalPERS does not depend on cozy working relationships at its top level, yet both Mathur and CEO Marcie Frost appear to give that priority over investment performance, staff competence, and even performance of fiduciary duty. As long as they are going to continue to stymie Brown in her efforts to protect pension-holders, the pitched battles will and should continue.

However, despite the too-obvious efforts in Ashton’s piece to dirty up board member Brown, it’s clear she’s already established herself as a force to be reckoned with. She is presented as a combatant against board president Mathur, which is by implication an equal position. Moreover, Mathur looks isolated. The expected quotes backing her are absent; Ashton even admits her fellow board members were loath to speak up. Brown despite being the new and suspect kid on the block, has exposed Mathur overreaching her authority and engaging in abuses like opening and reading all board members’ mail and reserving the right to answer it on their behalf. (Par for the tone of the piece. Ashton buries this bombshell and tries to depict it as a nothingburger).

Having now dealt with what Ashton failed to address and why that matters, we’ll now turn to how he repeatedly and consistently skewed his article against Brown.

How Ashton’s Article on Brown is Biased from Top to Bottom

The dirty tricks in Ashton’s piece start at the very outset.

In-Your-Face Misrepresentations. Ashton takes up the CalPERS party line, that Margaret Brown was mischaracterizing a punishment that violated CalPERS board policies as an “illegal lockout” and was somehow being unfair by making that public. Ashton made an issue of the fact that Brown released a video showing that the illegal lockout was continuing. He astonishingly wrote that her being locked out was somehow “her assumption.”

Ashton curiously deprives his readers of the timeline, which calls his characterization into doubt. As Ashton well knows, since he wrote about it in March, Brown has been denied access to the board’s quarters by Mathur. On a Monday morning, the first day of the April board meetings, Brown missed an important part of the closed session because her badge, which also works as an access card, did not open the door to the relevant board room. She had to go the long way around, through a security clearance and the auditorium, to get to a door that she had to pound on in order to be admitted late.

She took the video the following afternoon, showing she was still unable to get into her office.

It is an insult to his readers’ intelligence for Ashton to depict Brown’s badge not allowing her access for two days running to the board areas as “an assumption”. Key cards do not automagically preprogram themselves. ³ Ashton is openly prostituting himself by running a CalPERS Big Lie.

Former board member JJ Jelincic (himself a former union shop steward) confirmed that the punishment imposed by Mathur was a “lockout” and also amounted to denying a public official the ability to perform their duties of office. But notice how Ashton spends more pixels discrediting Jelincic than quoting him. Ashton also put this quote at near the end of the piece, well away from his “Lockout? What lockout?” positioning at the top:

Brown’s conflict with Mathur echoes former CalPERS board member J.J. Jelincic’s complaints about board policies. Jelincic was reprimanded last year by Feckner for leaking information to news outlets. Jelincic argued that the board disciplinary process lacked transparency.

“Board members have offices in the back of the auditorium. To lock a member out of their own office is to interfere with an elected state official doing their job,”…

And this section contains another smear. Ashton’s link shows that his own article acknowledges that whether Jelincic engaged in misconduct was disputed. So where it the obligatory “alleged”?

On top of that, Ashton in fact acknowledged in his previous hit piece on Browm that he had received the e-mail Brown sent to members of the press on March 19, which we’ve embedded at the end of this post. As Ashton himself reported, Brown has been prohibited access to certain parts the CalPERS used by the board, including her office and a finance reference library. She described why it was an illegal lockout then, making extensive citations of CalPERS board governance policies. We published a letter from her attorney James Moody, in which he concurred with her reading and said he had told her to disregard the restrictions on access.

Ashton again misleads his readers with this paragraph, which is central to Brown’s efforts to contest one of Mathur’s abuses:

She changed one CalPERS board policy in January that now is relevant to her conflicts with Brown. Mathur restricted access to confidential documents in such a way that members can only read the material at CalPERS headquarters.

The CalPERS board president cannot set policy. All board policies are set via a formal process, including the publication of the policy, allowing members of the public to comment on it, and having it formally approved first by the Board Governance committee, and if it passes, then by the entire board. For Ashton, who has been covering CalPERS for two years, to say something so obviously false is embarrassing.

The reality is that as Mathur set a new rule, illegally, and has been able get away with it because CalPERS staff are enforcing her impermissible rule-making. This also implicates CalPERS CEO Marcie Frost, who has chosen to back Mathur despite her acting as if having the first-among-equals role of board President has suddenly endowed her with dictatorial powers.

Oh, and indicative of the accuracy of Ashton’s reporting: Mathur made up her new “rule” in February, not January, as Ashton stated.

Undermining a source’s own words. This is astonishing:

James McRitchie, a longtime CalPERS watcher and one-time candidate for the board, said he was inclined to back Brown because she’s requesting information she should have as an elected board member.

Yet he stopped short of giving her his full support. “I’m happy to do so, but I also want to make sure she makes every effort she can to work things out with Priya without further escalation. Both of them seem to be hard-headed.”

Ashton’s introduction to McRitchie’s quote is another Big Lie. McRitchie says that he gave Brown his support. Stating a preference that Brown work things out with Mathur is not tantamount to qualified support. McRitchie confirmed that in an e-mail to me:

She [Brown] is fighting for openness and transparency… worthy goals. Priya is in circling the wagon mode, unworthy.

Gratuitous smears. Ashton goes out of his way to present unsupported allegations against Brown, such as:

Brown cast herself as a watchdog for retirees and Bilbrey as an uncritical board member; Bilbrey’s campaign drew attention to four settlements one of Brown’s previous employers paid to resolve workplace retaliation claims that initially named her.

If you understand litigation, which sadly most of Ashton’s readers probably don’t, the “initially named her” is tantamount to an admission that Brown was removed from the case because she never should have been included in the first place. So Ashton is knowingly recycling a bogus charge.

On top of that, Ashton had to go back to 2006 to find some contested dirty laundry on Brown. Nowhere does he mention the more recent and far more relevant violations by Mathur of her duties as a state official. By 2010, she had been fined three times for failing to file required financial disclosure forms on time. In 2012 and 2013, she again refused to file required forms, this time campaign financial statements. That led the normally toothless Fair Political Practices Commission’s board to vote unanimously in 2014 to impose much larger fines than recommended by the enforcement staff due to Mathur’s repeated violations. CalPERS then stripped her of all committee leadership positions.

The article also uses pre-crime as a justification for restricting Brown and other board members’ access to records, with the immediate bone of contention being past closed session transcripts. Mathur goes on about the risk that the documents might leak out (quelle horreur!) and move markets.

This is pathetic as well as silly.

First, Mathur failed to mention, and Ashton curiously failed to consider, that board members hold confidential meetings every month! If there was any market-moving information, it would be current information, not material that is months old.

On top of that, the board already has access to current closed session materials on their iPads.

Moreover, the idea that the CalPERS board would have get confidential information that could move markets is institutional delusion. The limited information that the CalPERS board receives about investment funds has zero relevance for traded instruments. CalPERS is a pretty large investor in public stocks, but it runs an in-house index fund, so the board does not get involved in stock picking, nor does it weigh in on the selections made by its in-house bond investment team. The only possible information that could have the slightest market implication is if CalPERS were to launch a suit against a deemed corporate governance miscreant. CalPERS isn’t enough of an activist for investors to take a CalPERS suit like that seriously (this is a change from CalPERS’ heyday in governance activism in the 1990s, where CalPERS scored some wins).

In addition, Brown has an absolute right as a fiduciary to see any document that CalPERS has on demand. The fact that Mathur went from barely giving Brown any access to transcripts, and then only cherry-picked section with a CalPERS prison guard minder in the same room, to giving her substantially all of what she wanted as the result of a single letter from an attorney is an admission of how legally unsound her position was.

Even more telling is this effort to tarnish Brown:

Terry Brennand, a senior lobbyist for Service Employees International Union California, opposed Brown’s campaign and argued that her choices so far burned bridges with her new colleagues on the board.

“There’s information that my board members can’t share with me. She seems to not be bound by any of the confidentiality restrictions. I don’t know how you can do business with board members when they don’t trust you,” he said.

“My board members“? Insiders know well that union bosses Brennand and David Low, the Executive Director and Director of Governmental Relations of the California School Employees Association are kingmakers at CalPERS and are believed to have direct access to the CalPERS CEO. Here, Brennand depicts certain board members as his personal property, which sadly sounds about right.

As important, Brennand, with no factual basis whatsoever, accused Brown of violating confidentiality. It might behoove him to bone up on what Brown’s obligations are. She’s required to keep closed session discussions, attorney-client privileged material, and any documents where CalPERS has signed confidentiality agreements (and the documents are still confidential) secret. Given how CalPERS censured Jelincic over an unproven claim that he had leaked confidential material, you can be sure the board would be all over Brown if she had done anything improper.

The fact is that Brennand is opposed to Brown’s commitment to transparency and accountability, and is apparently offended by her exposing bad conduct by, for instance, publishing the e-mails that showed that Mathur is opening, reading, and even answering board members’ mail, and to make matters worse, not even giving an accounting of what she’s been up to.

In other words, Brennand is keen to shoot a messenger who threatens to expose “his” board members’ misdeeds. His efforts would be better directed to having them clean up their misconduct instead.

Ashton also engages in drive-by cheap shots. He writes that Brown “declined an interview request” yet immediately after that, provides a statement she made via e-mail. There’s no reasons, since Brown was clearly answering questions via e-mail, to bring up her not being willing to speak with him save for trying to depict her as uncooperative. Generally speaking, people who are press savvy don’t speak to reporters. They refuse to comment, issue only written remarks, or rely on a paid professional. Brown is demonstrating that she’s a quick study.

And at the end of the piece, Ashton says that Brown cancelled a meeting with Mathur. Given the way he’s tried to spin the piece as being a personal dispute, as opposed to a struggle over a series of policy issues, it can easily be misread as pique. In fact, Brown made clear that the reason she could not do the proposed meeting is that her daughter is having a difficult pregnancy and her mother is also infirm, and both are placing large time demands on Brown. Moreover, other board members are refusing to take up Mathur’s request to meet between board sessions.

Omitting or underplaying essential-for-understanding but unflattering information about Mathur and CalPERS. We already mentioned Ashton trying to taint Brown by bringing up an old irrelevant lawsuit yet not mentioning Mathur’s numerous violations of two different types of required financial filings.

Readers have to get to paragraph 21 before they stumble over this bombshell:

Brown in April also learned that CalPERS has a custom of allowing the board president to open mail addressed to other board members and determine how to reply to the correspondence.

And that’s all Ashton has to say about it. He couldn’t be bothered to spend five minutes Googling (or reading my posts) to ascertain that according to Postal Service rules, if anyone in an organization has the authority to open mail delivered to a particular address, it’s the Chief Executive. On top of that, opening mail addressed to a mere employee runs the risk of common law violations, such as of the right to privacy and larceny.

Even worse, Ashton tacitly acknowledges that he knows this practice isn’t kosher by calling it a “custom,” which means among other things that no one at CalPERS is trying to pretend it has official standing. Ashton also appears to have failed to inquire as to whether this “custom” predated Mathur’s term in office. But worst of all, his weasel-wording acknowledges that Mathur may well be only intercepting some board members’ mail, namely Brown’s and not that of other board members.⁴

Ashton also chooses to look past the history and significance of Browns’ requests to read past closed session transcripts. Mathur engaged in repeated, impermissible measures to keep Brown from seeing them, but first demanding that Brown ‘splain herself, by maintaining falsely that Brown could see past records only on a “need to know” basis, insisting on a briefing that was first delayed and in the end never happened (the staffer John Cole said there was nothing for Brown to be told, making clear the “briefing” pretense was sham), and offering only very narrow time window for Brown to have access. Even then, Brown was allowed to read only about 50 pages, some of them redacted, with a minder working for Mathur watching Brown the entire time.

Mind you, this is a flagrant violation of fiduciary duty. Mathur is actively and aggressively interfering with Brown performing her official duties, and in particular, with her desire to become sufficiently well informed so as to make good decisions. By actively undermining Brown, Mathur is sabotaging the board as a whole, both directly through her damage to Brown, and by sending a forceful message that board members who do not submit to the mushroom treatment by staff will be abused and harassed in a similar manner.

The implication is that Mathur is unfit for office and needs to resign. This is a vastly more important story than the one Ashton has chosen to tell.

Violation of journalistic standards. Ashton insinuated that there was something improper in Brown’s use of attorney Jim Moody:

Brown disclosed those practices to the blog Naked Capitalism and hired an attorney who has represented Naked Capitalism to protest the restrictions on her access to information.

Experts in journalistic standards have confirmed that Ashton behaved improperly. He had contacted me seeking comment and then refused to include the comment I gave him. He either needed not to try to denigrate Brown with his remarks about the attorney or include my comment. But he apparently was too wedded to dirtying her up to operate properly.

Here is our exchange:

From: “Ashton, Adam”
Subject: SacBee
Date: April 19, 2018 at 3:12:48 PM EDT
To: webber@auroraadvisors.com

Hi Susan,

I’m inclined to write a story on the governance issues that surfaced at CalPERS this week. I’m planning to credit the stories you brought to light. I am also going to note that the attorney representing member Brown has also represented Naked Capitalism.

Would you like to comment or let your writing speak for itself?

After giving him a quote that said CFO Charles Asubonten’s resume misrepresentations were the bigger story, he eventually came back with:

From: “Ashton, Adam”
Subject: Re: SacBee
Date: April 23, 2018 at 2:03:58 PM EDT
To: Susan Webber

Susan,

Would you like to talk by phone? I am asking about the attorney because it is uncommon for a politician to share legal representation with a media organization that covers the politician.

Adam

My reply:

From: Susan Webber
Subject: Re: SacBee
Date: April 24, 2018 at 2:15:15 PM EDT
To: “Ashton, Adam”

Adam,

With all due respect, you have your facts wrong.

Moody represented me with the Washington Post and Kentucky Retirement Systems and Brown with CalPERS. It is false to depict this as “share[d] legal representation.”

In addition, under your very nose, Karl Olson, who represents the Sacramento Bee, the Los Angeles Times, Reuters, and the California Newspaper Publishers Association, also represented JJ Jelincic against CalPERS on his discipline last year. More generally, I am confident I could come up with many other examples of a lawyer or law firm representing a politician and a media organization on different matters. The defamation and First Amendment bar is small and has media organizations and public figures as its major clients. It’s utterly unremarkable for a defamation/First Amendment lawyer to have both media and political clients.

Susan

It should now be indisputable that Ashton’s reporting on the subject of CalPERS cannot be trusted. At best, his articles should be viewed as a CalPERS gossip sheet. The only good news is the bias is his reporting had become so obvious that even casual readers are likely to spot it.

_____

¹ Mind you, some, perhaps many, are aware of Ashton’s bias. I’ve had CalPERS members tell me that Ashton is known for, as one put it, “running CalPERS press releases.”

² The Sacramento Bee editors appear to have tried to compensate for Ashton’s reporting oversight via the article headline (headlines are almost without exception written at the editorial level). The original headline for the Ashton article was CalPERS leaders Mathur, Brown at odds. It is now ‘Seemingly dysfunctional’ CalPERS leaders spar over documents, access. However, you have to get more than half-way into the story before Ashton even mentions the word “transcripts,” nor does he show the slightest interest as to why CalPERS might want to deny Brown access to records to which she indisputably has a right to see as a fiduciary.

³ If you believe this, I have a bridge I’d like to sell you:

Mathur said Brown was not intentionally locked out of her office at this month’s board meeting, when Brown filmed the YouTube video. Rather, Mathur said, it was a technical glitch that CalPERS corrected when it learned Brown could not use her office.

⁴ In fact, it is just about certain that Mathur is playing favorites. The State Treasurer and Controller both sit on the CalPERS board. No doubt they receive most of their mail, including some CalPERS-related mail, at their main office; I’ve encouraged readers to send letters there rather than via CalPERS. But these officials are so influential that it is difficult to imagine a CalPERS board president would cross them by snooping on their correspondence.

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