September 14, 2000

The Honorable Elaine Alquist
Higher Education Committee
California State Assembly
1020 N Street, Room 152
Sacramento, CA 95814

Dear Madam:

The Society of Professional Scientists and Engineers (SPSE) is an independent organization of employees at the Lawrence Livermore National Laboratory (LLNL). For twenty-seven years it has represented the interests of professionals at the Laboratory.

The Regents of the University of California which manages the Laboratory have recently made significant changes to the management of the pension fund. We recognize that overseeing the pension fund is one of the duties of the Regents. However, we are deeply concerned over the process by which these changes were enacted.

Foremost among our concerns is the secrecy that surrounded the process. For example, the UC Retirement System Advisory Board, was not consulted at any time. We are also disturbed that the well-respected and successful Treasurer, Patricia Small, was forced to resign. In addition, there are unanswered questions regarding the extension of the contract with the consulting firm Wilshire Associates. Was the competitive bid process deliberately ignored when the extension was accepted? Did Regent Gerald Parsky, a fund-raiser for George W. Bush's California campaign, hire Wilshire because of their political contributions, as the media implied?

On July 18, 2000, we communicated our concerns to UC President Atkinson and the Regents in the enclosed letter. A month later, we received the enclosed response from Regent Judith Hopkinson who is Chair of the Regents' Committee on Investments. Ms. Hopkinson failed to explain the need for such secrecy.

It appears that a major overhaul of the UC pension fund management has been orchestrated without any "checks and balances." The UCRS Advisory Board was not consulted. The one person who had serious questions about this overhaul, UC Treasurer Patricia Small, was silenced.

California tax payers, as well as the thousands of loyal UC employees who depend on the fund for their retirement, deserve answers. Participants in the UC pension fund should have trust in a process that guarantees openness, accountability, and representation of their interests.

We respectfully ask the Higher Education Committee to investigate, and to recommend changes so that the process meets these criteria.

Very Truly Yours,

Patrick Weidhaas
SPSE President

Enclosures:  SPSE Brochure
                 SPSE's letter to Atkinson
                 Regents Reply
                 Letter from Patricia Erickson to Regents


cc:  Judith Hopkinson, Chair of the Regents' Committee on Investments
    Tom Hayden

pw:cmr

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