For the last two years, the California Public Employees Retirement System has been dogged by an unrelenting stream of bad news concerning the behavior of its current and former board members. In the most recent blow, the California Fair Political Practices Commission issued this press release in September announcing that it had fined 17 officials at CalPERS for failing to report gifts as required by state law. Among those fined was Rob Feckner, President of the CalPERS Board of Administration.

In an effort to address a rising tide of ethical concerns, CalPERS commissioned a law firm to conduct a “special review” of outside placement agent activities. The review, which according to this story by Marc Lifsher at the Los Angeles Times, cost CalPERS $11 million. Remarkably, CalPERS chose to use a firm that had “previously represented CalPERS in different proceedings and matters”. Nonetheless, the report included this observation...