CalPERS Invokes VC Secrecy Law on ITU Issue

California’s CalPERS state pension fund has invoked a new-ish state law to avoid having to disclose information about its dealings with the troubled ITU Ventures. Recall, the L.A. Times is reporting that the firm’s partners have been accused of over-actively encouraging portfolio companies to make political contributions to a CalPERS board member, which is an ITU LP:

Officials of the California Public Employees’ Retirement System are
citing the law in refusing to disclose several documents related to
International Technology University. ITU’s principals and several
start-up companies it fostered made contributions to the failed
gubernatorial campaign of state Controller Steve Westly, a CalPERS
board member.

The California pension fund earlier this year committed — and later
revoked — almost $24 million to ITU, to be used as seed money for new companies. At least two documents being withheld, obtained by The Times from another state, refer to campaign contributions.

CalPERS is the nation’s largest public pension fund, with more than $207 billion in assets. But officials say that if they release such documents, other venture capital firms, accustomed to operating outside the public’s view, might decline to do business with California.

“In order to get the very best investments … public pension funds are required to retain as confidential materials that the [firms] believe are critical to their business,” said CalPERS spokeswoman Pat Macht. 

The author of the 2004 law, state Sen. Joe Simitian (D-Palo Alto), says it was never supposed to be used in such a way.

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