CalPERS Ignores Rep. Banks’s Questions on CIO’s Links to China’s Thousand Talents Spying

By Mark Tapscott
Mark Tapscott
Mark Tapscott
Congressional Correspondent
HillFaith Founding Editor, Congressional Correspondent for The Epoch Times, FOIA Hall of Fame, Reaganaut, Okie/Texan.
February 21, 2020 Updated: February 23, 2020

WASHINGTON—California Public Employees Retirement System (CalPERS) officials failed to answer a congressman’s questions about its chief investment officer’s (CIO) links to a Chinese program the FBI says is a spy tool.

“CalPERS failed to answer two fundamental questions raised in my letter to Governor [Gavin] Newsom,” Rep. Jim Banks (R-Ind.) told The Epoch Times on Feb. 21.

Banks was referring to his Feb. 12 letter to Newsom concerning CalPERS CIO Yu Ben Meng’s “long cozy” relationship with the Chinese Communist Party (CCP).

“First question: Is Mr. Meng a member of the Thousand Talents Program, something the FBI called a ‘non-traditional espionage program?’

“Second question: Since Meng came back as Chief Investment Officer of CalPERS, has CalPERS invested in companies that are affiliated with the Chinese People’s Liberation Army?”

The Indiana Republican also said he wants “clarification from Mr. Meng about what he meant when he told the Chinese Communist rag People’s Daily that his ‘roots were in China,’ and why he said that if he got ‘an opportunity to serve the motherland, such responsibility and honor cannot be compared to anything.’”

Banks said CalPERS’ massive investments in China were estimated in 2018 to be $3.1 billion in at least 172 Chinese firms. He also noted that Secretary of State Mike Pompeo recently told a meeting of the nation’s governors that included Newsom that CalPERS “is invested in companies that supply the People’s Liberation Army (PLA) that put our soldiers, sailors, airmen, and Marines at risk.”

Epoch Times Photo
Rep. Jim Banks (R-Ind.) on Capitol Hill on March 27, 2019. (York Du/NTD)

Banks further said in his letter that “CalPERS holds shares of China Communications Construction Co. (CCCC), which has constructed PLA naval bases in the South China Sea, and in China Shipbuilding Industry Corp., a state-owned enterprise, and the largest manufacturer of Chinese naval ships.”

CalPERS is the largest defined-benefit public employee pension program in the United States, claiming an estimated $400 billion in assets managed on behalf of more than 2 million workers, retirees, and other beneficiaries.

As a defined benefit program, CalPERS promises pensions equal to a certain percentage of a retired California public employee’s salary. Most corporate and government pensions are based on defined contributions by the employee, with the level of benefits then determined by the return on investment of the contributions.

Marcie Frost, CalPERS’ chief executive officer, hired Meng in September 2018. She said in a Feb. 20 response to Banks that “CalPERS holds $200 billion in stocks from companies based in nearly 50 countries, including the United States. Approximately 1% of our total fund is invested in Chinese companies and passively managed through our indexed public equity portfolio.”

Firms in those portfolios are selected by index managers, not CalPERS, she noted, and she said her program doesn’t invest in any foreign companies that aren’t approved by the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC).

Frost, who called Banks’ claims “baseless accusations,” said CalPERS “has a duty to seek returns in the market sufficient to meet the pension obligations to its beneficiaries, not to promote a policy agenda of any persuasion through its investment strategy.”

A spokesman for Banks said his office has received no response from Newsom. Two members of the CalPERS 13-member governing board are appointed by Newsom, with one jointly named by the Speaker of the California Assembly and the state Senate’s rules committee.

Newsom also chooses two individuals—the director of California’s Department of Human Resources and an individual from the State Personnel Board—who are ex-officio board members.

CalPERS’ spokesmen didn’t respond to a request by The Epoch Times for comment.

The pension program has funded only 67 percent of its promised benefits, according to calculations based on public reports by Truth-in-Accounting (TIA), a Chicago-based nonprofit that advocates for greater transparency and accountability in government at all levels.

CalPERS’ managers do make some investment decisions based on political considerations. A 2017 report by the American Council on Capital Formation (ACCF) observed that CalPERS plunged from a $2.9 billion asset surplus in 2007 to a $138 billion deficit.

The report attributed the plunge to the “tendency on the part of CalPERS management to make investment decisions based on political, social, and environmental causes rather than factors that boost returns and maximize fund performance.

“The ACCF report finds that four of the nine worst-performing funds in the CalPERS portfolio as of March 31, 2017, focused on supporting Environment, Social and Governance (ESG) ventures. None of the system’s 25 top-performing funds was ESG-focused.”

CalPERS was also among signers representing $4.8 trillion in assets of a 2018 letter to gunmakers encouraging them to change their business practices according to an agreed-upon set of principles.

California’s overall state finances are also among the worst in the nation, according to TIA.

“California’s state officials have made repeated financial decisions that have left the state with a debt burden of $275 billion. That burden equates to $21,800 for every state taxpayer. California’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years,” TIA said in a recent analysis.

Contact Mark Tapscott at

Mark Tapscott
Congressional Correspondent
HillFaith Founding Editor, Congressional Correspondent for The Epoch Times, FOIA Hall of Fame, Reaganaut, Okie/Texan.