This week's revelation that the state is looking into gift reports of four dozen CalPERS board members and staff opened a portal on two things that generally don't blend: civil service and gift-taking.

But hundreds of state workers at the California Public Employees' Retirement System and thousands throughout state government are in a position to receive gifts that they must then report.

About 650 of CalPERS' 2,300 staff and another 260 consultants are in jobs with enough juice that they have to report any gift of $50 or more from a business partner or a potential partner. Like all state employees and elected officials, they can't accept anything worth more than $420.

That leaves plenty of room for limousine rides home from the airport or dinners with investment fund managers.

The watchdog Fair Political Practices Commission said this week that it is investigating 49 CalPERS staff and board members for failure to report gifts.

Across state government, thousands of state decision-makers – board members, heads of agencies and even some midlevel employees – file "statement of economic interest" forms.

They disclose, among other things, stock holdings, property and gifts.

Last year, the commission's enforcement division leveled fines totaling $14,000 for about 45 state employees who failed to properly report gifts.

"Frankly, I don't think they should be receiving any gifts from people with whom they do business," said Center for Governmental Studies President Bob Stern, who helped draft the initiative creating the agency.

CalPERS, the nation's largest public pension fund with $234 billion in assets, rolls with investment fund managers. It spreads its wealth worldwide. It's a different government animal, a public entity that entertains private competitors for its business.

CalPERS spokesman Brad Pacheco said that in the past a "big part" of gifts to CalPERS traveling investment staff has been free meals and other considerations that are commonplace in the investment industry. If you want access to Wall Street royalty, you can't dine with them at Burger King.

The travel and the face time that goes with it is "part of our fiduciary responsibility," Pacheco said.

The line between gift and graft, however, can blur in a hurry. CalPERS is in the midst of an image and policy makeover following a tawdry influence-peddling scandal involving former employees and former board members who took global junkets and job promises in exchange for access.

As the scandal unfolded, fund CEO Anne Stausboll issued a November 2009 memo that banned employees from accepting any gifts from business partners or potential ones.

Suddenly, seemingly innocuous freebies were toxic. An employee could attend an investment seminar, for example, but couldn't accept the free lunch that went with it.

One CalPERS investment officer won't even accept bottled water for fear of breaking the rule, Pacheco said: "Now she only drinks water out of a glass."

CalPERS has zealously pursued other reforms. Last year it supported a law that now requires "placement agents," the middlemen at the center of the fund's scandal, to register like lobbyists.

Controller John Chiang's bill slaps a $50 gift limit on staff at CalPERS and its cousin pension fund, the California State Teachers' Retirement System. The state Senate on Monday approved the measure, 39-0. It's now in the Assembly.

Meanwhile, the FPPC is looking at those 46 CalPERS employees and three board members, including President Rob Feckner.

Feckner said Wednesday that the investigation of his records spanned five years and turned up three unreported dinners and one lunch that he undervalued. He has agreed to pay $200 per incident once the commission finishes its work, he said.

The fund is at a public relations disadvantage with this new probe because the FPPC holds the details until its investigation concludes.

So there's plenty we don't know yet: Are we talking conspiracies to hide big-ticket freebies like overseas trips and big-time payoffs?

Or do most of the alleged gift-reporting violations involve honest mistakes? How many are unreported cups of coffee?

The penalties for violations run from warning letters to fines of up to $5,000 per incident. A worst-case cover-up could lead to criminal charges and jail time.

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Call The Bee's Jon Ortiz, (916) 321-1043. Read his blog, The State Worker, at sacbee.com/blogs.

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