Our Pensions and Israel

Before you read this post, please read yesterday's post. I never got to finish it because I was on the phone for four hours and had endless interruptions. Sorry.

So, if 2003 CalPers lost hundreds of millions on investments in Israel. One would think that they would have become more cautious. Nope, this article from Israel21c in 2006 says, "American pension funds look to Israel for investment". At the meeting mentioned in the article we find some interesting characters showing up. Alan Hevesi the Comptroller for New York was there, he was convicted of corruption involving the New York Pension Fund. Here is an article from The New York Times.

At the meeting in question the heads of CalPers and CalStrs also attended. The person who invited everyone was Ehud Olmert the man accused of corruption in Israel that I wrote about yesterday. Hmmmm. Markstone was also there, that is the company that Elliot Broidy was in charge of, he is the guy that plead guilty to bribery charges in regards to the New York Pension Fund.

So the investments by the pensions funds had done poorly by 2003, maybe things got better. Nope, they got worse. "CalPERS: 6 Israeli VC funds wrote off $385m in 5 years", read that article from 2005.

Maybe since then we have learned to stop investing in Israeli Venture Capital Funds and having to write off losses with nothing to show for it? Nope, how bout this article from Haaretz.com In the last quarter of 2006 and the first quarter of 2007, that is about half a year, CalPers wrote off around $700 million dollars in these investments.

So, here we go. Ehud Olmert, the Israeli Finance Minister and future Prime Minister arranges to have the heads of various Public Pension funds in the United States come to his country to look into investing in it. Elliot Broidy of future prison fame convinces many of them to go to Israel.

At this meeting apparently many were swayed because afterwards these pension funds invested untold amounts in start up companies. These start up companies then lose hundreds of millions for years and years and we just keep investing in more. The "Placement Agents" for these deals make tens of millions and many had sat on pension boards, having been placed there by politicians. Hmmm. These placement firms also are heavily involved in redevelopment agency jobs and are also funded by the public pension funds. I see lots and lots of money being lost and no assets to write off, hey, this is beginning to sound like the loan to the Solyndra, you lend or invest in a company that has practically no assets, the money goes somewhere and the losses are written off because there are no assets to go after.

For those who care to, try speculating why CalPers never pulled their investments and kept investing when year after year they showed a loss. Somethings to consider, with the housing boom and the over inflation of the value of the investments, throughout most of the last eleven years, the pension funds were overfunded. In fact many increased how much retires would get because they are not allowed to be too overfunded. Nobody even cared about the losses.

This is not about Jewish people and it is not about Israel, it is about corruption and the theft of hundreds upon hundreds of millions of dollars from public pension funds. Who got the money, where did the money go? Why did certain people keep investing it in these companies and why didn't the unions or politicians care?