When former CalPERS CEO Fred Buenrostro was charged more than a year ago by both federal and state officials with fraud and obstruction of justice charges, something didn’t seem right. The allegations focused on how Buenrostro had forged documents to help placement agent pal Alfred Villalobos get paid by some of his private equity clients, but there was no mention of Buenrostro personally benefiting (beyond a $300k per year job with Villalobos upon retirement from CalPERS). Not was there any evidence that Buenrostro improperly influenced investment decisions at CalPERS.

But it seems he did both things, according to his guilty plea last Friday in a San Francisco courthouse.

Buenrostro’s attorney had previously suggested that his client was prepared to roll over on Villalobos, who continues to insist that he did nothing wrong. And roll over he did, acknowledging not only the fraud, but also:

  • The receipt of $200,000 in cash from Villalobos — stuffed into shoe boxes and paper bags over a series of three meetings – in exchange for confidential CalPERS information and influence in directing CalPERS to invest in Villalobos’ clients.
  • The receipt of a $50,000 check from Villalobos, in exchange for Buenrostro refusing to testify in an SEC investigation over placement agent corruption.
  • The receipt of a variety of first-class airline tickets and other luxury travel perks (some of which were for business travel while Buenrostro was on the job with CalPERS).
  • The receipt of casino chips, some of which also went to Buenrostro’s wife and unidentified ex-CalPERS board members.
  • In or about 2005, VILLALOBOS provided casino chips with redeemable cash
  • Villalobos paid for Buenrostro’s 2004 wedding (which, as previously reported, was held at Villalobos’ home in Lake Tahoe).

In short, Buenrostro was every bit the crook that his harshest critics accused him of being. He could face upwards of 5 years in prison and a $250,000 fine.

But even these admissions don’t answer all of the outstanding questions related to the CalPERS pay-to-play scandal. For example, the forgeries still don’t make much sense. They related to legitimate contracts approved by the CalPERS board, so why couldn’t Buenrostro and Villalobos have them go through proper channels? And then there are some new questions, such as how Buenrostro improperly influenced investment decisions, and which ones? Even though much of this activity is nearly a decade old, are there some existing CalPERS investment contracts that should be voided?

Perhaps we’ll learn more at the eventual trial of Villalobos, whose attorney said there is “no truth” to Buenrostro’s new allegations.

Below is a copy of the court docs from Friday:

  Fred Buenrostro plea