Highlights:
Ted Siedle, a former SEC attorney who has made a lucrative career exploiting the SEC’s whistleblower program, is at it again. This time, the frequently maligned pseudo-analyst is targeting CalPERS, a public pension fund that manages over $556 billion in assets for more than 2 million members. His latest report, which was funded by a small group of politically-motivated activists within the Retired Public Employees Association of California, makes a series of sensational claims that are based on cherry-picked data, hypotheticals, recycled language, and incomplete information.
For Siedle, this report mirrors a previous effort he made in Ohio. In 2021, Siedel published a report for the Ohio Retired Teachers Association (ORTA) that made multiple erroneous accusations against Ohio STRS. Siedle’s claims were refuted by the Ohio STRS and Ohio Auditor of State, the latter of which stated that it “found no evidence of fraud, illegal acts or data manipulation.” Further, ORTA and its allies that hired Siedle are embroiled in a lawsuit filed by Attorney General Ned Yost, who is accusing them of corruption and bribery.
Cherry Picking Arguments
Among the most glaring claims in Siedle’s report is the assertion that CalPERS lost “a staggering $241 billion … over 20 years by choosing private equity over a passive public-equity alternative.” Siedle, however, does not specify which years underlie that figure, a critical omission given that the choice of measurement window can dramatically alter any long-term investment comparison. It is not the first time he has been called out for precisely this kind of disingenuous calculation.
In February 2023, Siedle wrote a column on Ohio STRS, claiming that a “key finding” that was “hidden” in a special audit done by the Ohio State Auditor of STRS said that if STRS had invested in the S&P 500 rather than alternative investments, it would have “provided the pension with $90 billion more” than it did. But context matters. The special audit examined STRS’ growth across two distinct periods: 1999-2021 and 2009-2021. STRS had published a table that started with 1999 and as a result, included years in which it beat the S&P 500 (it did not do so after 2009, which was Siedle’s point of comparison).
The special report itself defended STRS’ methodology, finding it “accurate for STRS to present their return data across as many years as possible” and noting that it is “important to look at different time periods when assessing the past success or failure of investment strategy.”
Recycling His Own Language
Siedle’s CalPERS is more accurately described as a greatest hits compilation of his past writings, rather than a legitimate forensic investigation. Just take a look at the comparison between this report versus a 2021 report on Ohio STRS. Notably, Siedle was criticized by the North Carolina Treasurer’s office in 2014 for plagiarizing himself by using “similar or identical language” to a previous report.
| New CalPERS Report | 2021 Siedle Ohio STRS Report |
| Finally, we note that in Pennsylvania and South Carolina, unlike California, there has been recognition that the public deserves to see the entire CEM report, not just select passages. | We note that in Pennsylvania and South Carolina, unlike Ohio, there is recognition that the public deserves to see the entire CEM report, not just select passages. |
| U. S. Supreme Court Justice Brandeis once famously said, “Sunshine is the best disinfectant.” In other words, transparency ensures that public officials act visibly and understandably, and report on their activities to the populace. | U. S. Supreme Court Justice Brandeis once famously said, “Sunshine is the best disinfectant.” In other words, transparency ensures that public officials act visibly and understandably, and report on their activities to the populace. |
| More than half of about 400 private-equity firms SEC staff examined charged unjustified fees and expenses without notifying investors. | More than half of about 400 private-equity firms that SEC staff examined charged unjustified fees and expenses without notifying investors. |
| Paying fees on committed, uninvested capital results in exponentially greater fees on assets under management on a percentage basis. | Paying fees on committed, uninvested capital results in exponentially greater fees on assets under management on a percentage basis. |
Relying On Incomplete Data
In his report, Siedle dubiously claims multiple times that CalPERS refused to cooperate with his investigation, and that “most of [his] requests for key documents were denied in whole or in part.” It was only after his report had been published that Siedle admitted that CalPERS, in fact, had sent him a link to more than 20,000 documents but that he “could not access it.” CalPERS then accommodated for his technical deficiency by mailing him a DVD of the documents, which Siedle further admitted that he hadn’t bothered yet to review.
Genuine pension oversight is important work, but it requires intellectual honesty, original analysis, and a willingness to follow the evidence wherever it leads. Ted Siedle’s report fails on all three counts.
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