CalPERS board member Charles Valdes took a $15,000 trip to London, Dubai and Hong Kong in 2006 with pension fund placement agent Alfred Villalobos, who paid for the journey on a personal credit card, according to documents obtained by The Bee.

Valdes took the trip in late November 2006 to attend a two-day financial conference in Dubai titled "Middle East Capital Markets." It featured a "social networking day" that included golf and a waterfront cruise on Dubai's Jumeirah Beach, conference documents show.

CalPERS board President Rob Feckner gave Valdes advance written approval to attend the Dubai conference under the pension fund board's written travel policy, internal CalPERS documents show.

Feckner signed a CalPERS form green-lighting the Dubai trip and, under a heading "source of funding," checked a box that dictated: "All travel expenses paid by PERS." The full board also gave its approval.

Yet almost three years later, Valdes apparently has not filed a travel expense claim for the Dubai trip and CalPERS cannot locate any bills for expenses that Valdes incurred on that trip, said Gina M. Ratto, deputy general counsel at the giant public pension fund.

Valdes, in a telephone interview with The Bee, said that he reimbursed Villalobos in cash immediately afterward "for the entire cost of that trip – about $13,000."

Told that the airfare alone for the trip was more than $15,000, Valdes replied, "then I paid him more."

"I could have billed the system for that trip, but I decided not to," he said. "I didn't want the system to pay for it." He declined to answer further questions.

Officials at the California Public Employees' Retirement System could not explain why they did not follow up on the trip at the time.

"To our knowledge, he did not file a travel expense claim in connection with that board-approved trip to Dubai," board spokeswoman Pat Macht said. "We don't know where he stayed or who paid for it."

Board members who receive gifts are required to report them on an annual disclosure form. Valdes reported receiving no gifts that year.

The Bee left a detailed message for Villalobos with an assistant at his office in Stateline, Nev., asking about the Dubai trip and why he arranged for Valdes' airfare. That message was not returned.

Placement agents investigated

Villalobos and his Arvco companies act as intermediaries between private equity firms and public pension funds. He opens doors, arranges meetings and helps persuade pension funds to invest in his clients' funds – and gets commissions on any deals.

Placement agents are drawing scrutiny from attorneys general in at least three states. A kickback scandal involving New York's fund generated indictments in March.

Two weeks ago, CalPERS hired Washington law firm Steptoe & Johnson to conduct a "special review" of Villalobos' activities. Arvco earned at least $60 million in commissions for helping clients secure investment commitments from the pension fund over the past decade.

Villalobos hosted the 2004 wedding of then-CalPERS Chief Executive Officer Fred Buenrostro at his Lake Tahoe mansion. Buenrostro said Villalobos paid for the event and that he later reimbursed him without seeing the actual bills and receipts for the affair.

A Valdes re-election campaign fund is also under investigation by the state's Fair Political Practices Commission after auditors found that Arvco employees and associates made contributions to Valdes' 2005 campaign that exceeded legal limits – donations made after the 2005 election ended. Valdes reported no expenses for that election.

Just before he sought CalPERS approval for the Dubai trip in mid-August 2006, Valdes suffered a financial setback in Sacramento Superior Court.

A judge awarded a collection agency a $17,917 judgment against the CalPERS board member, stemming from his failure to pay credit card bills in the 1980s and his subsequent failure to make minimum payments to the creditor after he had entered bankruptcy protection. The collection agency then garnished part of Valdes' state wages until the debt was paid off in full.

Call The Bee Capitol Bureau's Andrew McIntosh at (916) 321-1215.