UPDATE: CA Pension Fund Exec Yu Meng Resigned After Filing False Financial Disclosures, Self-Dealing


As we covered Thursday morning, Yu Meng, the Chinese-born Chief Investment Officer of California’s Public Employees Retirement System fund (CalPERS), abruptly resigned from his position late Wednesday. The resignation was effective immediately.


CalPERS’ investments in companies supplying China’s military complex were already under scrutiny by the Trump administration, and major questions about Meng’s allegiance to the United States were brought up by Rep. Jim Banks (R-IN) due to the fact that Meng’s prior employer was the Chinese government and since Meng has admitted to being part of the CCP’s “Thousand Talents Program” (TTP).

In the initial article, I wondered why Meng had resigned out of the blue and effective immediately. It turns out that just three days earlier, on August 2, Yves Smith at the Naked Capitalism blog posted a stunning, well-sourced exposé detailing Meng’s false filings on required financial disclosure forms, blatant self-dealing, and close ties to the highest levels of the Chinese Communist Party government.

Smith reviewed the two Statement of Economic Interest (Form 700) forms Meng filed since returning to the United States from Beijing in early 2019. The forms reveal Meng’s extensive investments in Chinese companies (some of which CalPERS also invested in), continued income from Beijing (over $110,000 in 2019), a failure to disclose more than 20 assets disposed of during the year, and his stake in private equity firms that were making bank off of CalPERS investments in exchange for a crappy return.


Of the private equity firm industry and the lack of performance for CalPERS (which is practically insolvent, insiders say), Smith writes:

[T]he industry has continued to extract high fees even as net results to investors like CalPERS continues to fall. CalPERS lost 5.1% in private equity last year, worse than the SP 500 and worse than CalPERS’ own public equity portfolio. No less than the Financial Times has decried the industry’s fee grifting as “the real ‘Money Heist.'”

These investments create a general conflict of interest against Meng building up capabilities in house to make private equity investments in house to cut out fees and costs that CalPERS has estimated at 7% per year. That is the course of action recommended by CalPERS’ own private equity expert…as well as others.

One firm Meng owns an interest in, Ares Capital, is one of the private equity firms involved in a bribery scandal that resulted in the filing of criminal charges against CalPERS’ former CEO, Fred Buenrostro. Two private equity firms Meng holds stock in, Blackstone and Carlyle, have been the beneficiaries of “significant commitments” from CalPERS since Meng became the CIO, despite the recommendation of the system’s private equity expert. It’s unclear if Meng recused himself from those decisions; Smith has filed a Public Records Act requesting such documents.


Even if Meng recused himself from decisions about the private equity firms, as Smith said:

Meng has put himself in and continues to remain in a position where doing the right thing by beneficiaries would hurt his personal balance sheet.

Meng also listed more than $100,000 in salary from the Chinese government’s State Administrator of Foreign Exchange (SAFE) for 2019, although he started his position with CalPERS in January 2019.

On his initial Form 700, completed when Meng assumed his position, he claimed to hold stock or investment interest in 13 Chinese companies:

  1. Agricultural Bank of China
  2. Bank of China
  3. China Construction Bank
  4. China Petroleum & Chemical Corp
  5. China Minsheng Bank
  6. China Telecom
  7. China Mobile
  8. China Unicom Hong Kong
  9. Industrial and Commercial Bank of China
  10. Petro China
  11. China Petroleum & Chemical
  12. PetroChina Co ADS
  13. iShares China High Cap

These holdings, the fact that retirement funds from California’s state and local government workers are invested in these Chinese companies and also enriching their pension fund’s Chief Investment Officer, and the fact that Meng continued to draw a substantial salary from the CCP while managing taxpayer dollars evidence an extremely troubling connection between him and his former (current?) boss.

And what does the CalPERS Board of Directors have to say about this? Well, their response to a question from California Globe’s Ed Ring asked in October 2019 about Meng’s role with China’s State Administration of Foreign Exchange (SAFE) and whether it was plausible to assume that “the Chinese government relied on his loyalty to the Chinese regime” will give you a hint:


“Your suggestion is patently absurd, and frankly, offensive. Ben Meng is a United States citizen born in China. He is a globally respected investor, serves as a member of the CFA Institute’s Future of Finance Advisory Council, and is an associate editor for the Journal of Investment Management. Mr. Meng has a Ph.D. from University of California, Davis. In addition, he not only has master’s degree in financial engineering from University of California, Berkeley, but has also taught at the Haas School of Business where he was the recipient of the Cheit Award for Excellence in Teaching. Mr. Meng was hired by CalPERS after a rigorous recruitment for the CIO position and was found to be the most qualified and best-positioned candidate to lead the investment office and to help ensure the security and sustainability of the CalPERS fund.”

While Smith noted in a post announcing Meng’s late-in-the-day, sudden, and immediate “resignation” that Meng had been spotted in routine meetings at CalPERS earlier Wednesday suggests that he didn’t depart willingly, Board President Henry Jones stuck to the party line. He first reiterated the reasons for the “resignation” Meng gave in his statement about focusing on health:

Yu (Ben) Meng played an important role in helping to reshape CalPERS’ Investment Office, build a strong team, and prepare the fund for the future. We respect Ben’s decision to resign and wish him well as he focuses on his health, his family, and moves on to the next chapter in his life.


…then claimed that the Form 700 discrepancies were NBD and had already been handled:

CalPERS has known about questions regarding Ben’s Fair Political Practices disclosure filings. These are private personnel matters and already have been addressed according to our internal compliance protocols.

If that’s true, why did he resign?

Stay tuned.


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