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CalPERS’ Bad Numbers: CEO Marcie Frost’s Multi-Hundred Thousand /Year Advisor Randle Communications Missing from Board Reports

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CalPERS’ Bad Numbers: CEO Marcie Frost’s Multi-Hundred Thousand /Year Advisor Randle Communications Missing from Board Reports


CalPERS CEO Marcie Frost is having an exceptional run of luck. This is the second year in a row that the multi-hundred-thousand-dollar price tag of Randle Communications, which has repeatedly described Frost and not CalPERS as their client, has been missing from the annual report to board of contracts with payments in excess of $100,000.

Today, in a separate post, we discuss CalPERS’ failure to report virtually all of its expenses to one of its most visible investment consultants, Meketa Investment Group, in its Comprehensive Annual Financial Report. CalPERS’ assertion, that it buried the Meketa expenses in its Internal Investment Personal [sic] and Administrative Expenses, strains credulity given how CalPERS fetishizes listing payments to its outside vendors. It’s also a violation of the accounting standards CalPERS has adopted.

And even if CalPERS’ excuse about Meketa is accurate, it is an admission of making a false account, which California penal code section 424 considers to be a criminal misappropriation of funds, and may rise to the level of a fraud given that CalPERS is rated by Moodys.1

By contrast, the repeated reporting lapse with Randle Communications is a venial rather than a mortal sin. Instead of having CalPERS staff report to the board and the board then ignoring what it has been told, here the board hasn’t been given the information for it to ignore.

The Curious Omission of Frost’s Consultant Randle Communications $233,000 in 2018-2019 and Even More in 2019-2020

Every year in September, CalPERS staff provides the Finance and Administration Committee with what is supposed to be a complete list of payments to outside professionals and consultants via its Annual Consulting and Service Contract Report ($100,000 and above) for the previous fiscal year.

Yet if you search the document presented to the board, Annual Consulting and Service Contract Report ($100,000 and above) in September 2019, you find no entry for Randle Communications.

The omission was not because Randle Communications received less than $100,000, since the draft CAFR presented to the Finance and Administration Committee in November meeting showed Randle Communications twice, in a list of names under “Consultant & Professional Services” and in a table under “Other Supplementary Information,” with the same information in the final CAFR. This screenshot comes from the final version on page 95:

CalPERS’ Bad Numbers: CEO Marcie Frost’s Multi-Hundred Thousand /Year Advisor Randle Communications Missing from Board Reports 2
CalPERS’ Bad Numbers: CEO Marcie Frost’s Multi-Hundred Thousand /Year Advisor Randle Communications Missing from Board Reports 3

And mirabile dictu, Randle Communications was again nowhere to be found in the September 15, 2020 Annual Contract and Procurement Activity Reports to the Finance and Administration Committee. Search on the Annual Consulting and Service Contract Report ($100,000 and above) to confirm.

Might CalPERS Have a Credible Excuse for Hiding Randle Communications from the Board?

Now one might argue, “Perhaps Randle Communications received less than $100,000” and so was below the reporting threshold for the Annual Consulting and Service Contract Report. That seems highly unlikely given the two documents we presented in an earlier post, a purchase order for Randle extending over a seven month period, all but thirteen days of which were in the last fiscal year, for roughly $313,000, plus an invoice for the month ended July 31, 2019 for $64,445. We’ve embedded them at the end of this post for your convenience.

Might the CalPERS staff try arguing that they didn’t need to report the Randle Communications charges because there was no contract? That’s quite a stretch, since a purchase order is functionally equivalent to a contract (it authorizes a vendor to submit charges for authorized work up to the purchase order amount) and on top of that, the Randle Communications invoice references a contract number: “Agreement No. 2018-8506.”

So what remains as possible excuses? That staff is so diligent that it checked original hard copies, and the Randle Communications records each time got stuck to other pieces of paper and were thus missed? Or that an unfortunate computer glitch resulted in Randle Communications being dropped from the September 2019 report, and the diligent staffer who found the omission and incorporated the missing item into the CAFR neglected to report the problem?

This omission looks particularly propitious given that we have not yet found anything that contradicts Randle Communication’s repeated public statements that Frost and not CalPERS is their client.

For instance, we had pointed out in our previous post that despite Randle Communications insinuating that it had a relationship with motivational speaker Jon Gordon, Randle Communications did not get a discount or even just the low end of his stated fee range for a speech Gordon gave at a CalPERS event last October. At a minimum, Gordon should have been willing to give up the cut he would normally have paid to speaker bureau All American Entertainment.2

Another reason for CalPERS getting a more favorable fee is that the event was paid marketing: Gordon was performing before employers, some of which would have the budget to engage Gordon if they liked him.

Another glaring reason for CalPERS to have gotten a fee concession was that Frost gave Gordon a freebie in the form of a podcast. As we wrote in August in our post about Frost being listed at All American Entertainment:

Given that CalPERS morale among its investment staff, which is the group most important to CalPERS’ performance, has been in decline under Frost’s tenure, it appears she’s been wasting her time and the system’s money in her dalliances with Gordon.

Worse, there’s the appearance of a quid pro quo:

CalPERS’ Bad Numbers: CEO Marcie Frost’s Multi-Hundred Thousand /Year Advisor Randle Communications Missing from Board Reports 4

Why is Frost spending time enriching Gordon by giving him content? Mind you, if Frost were a Federal government officer, this podcast would be verboten. Federal officials are not allowed to give presentations unless they are free to members of the public.

Now if Randle Communications saw itself as being in the business of representing CalPERS, it would have used this gimmie from Frost as a basis for getting a fee concession. Not only did she presumably record it on her day-job time, but it also isn’t being presented to CalPERS audiences. Indeed, only someone at a remove from CalPERS could be snookered into thinking Frost was courageous or knew anything about leadership.

But if Randle Communications saw itself as in the business of representing Frost, it would happily trade with Jon Gordon to get what Frost would see as a goodie for her, the Gordon podcast, at CalPERS’ expense.3

The only other Randle Communications-Frost footprint we’ve found so far supports the idea that Frost is indeed using Randle Communication for her personal benefit as opposed to that of beneficiaries. The radio station KCRA did a profile of Frost. That appears to have happened solely because the KCRA political analyst Kevin Riggs also works for Randle Communications. So did Riggs double dip and bill CalPERS while also being paid by the station?

The blurb for the podcast makes clear it was touchy-feely,4 focusing on how had to overcome people underestimating her because she was only a high school graduate. That’s a multi-layered Frost lie, since we found her having misrepresented her educational status in 2018, and not just in California but also in her previous job in Washington, on a form filed under penalty of perjury. Frost hasn’t been laboring under this burden because she’s lied about having not having gone to college for most if not all of her career.

The amount spent on Randle Communications is grossly disproportionate relative to Frost’s pay. Frost’s salary is now just over $500,000. We estimated that the annual tab for Randle Communications approaches $500,000 a year. We’ll have a better fix on the total amount and what Randle Communications was up to once we get the results of a Public Records Act request. But if what we have seen so far is representative and most of what Randle Communications doing is personal promotion of Frost, it’s an abuse of her office.

Why should CalPERS be paying a dime to flog Frost? If you look at the celebrated endowment investors, the star is David Swensen of Yale. Swensen is the CIO. Can anyone name the head of Yale’s endowment? Maybe Yalies can because his role is presumably to be a fundraiser.

There is no reason to promote Frost. She’s not soliciting donors. Can outside Sacramento and CalSTRS beneficiaries name the CEO of the much better functioning CalSTRS? Unlike a public company CEO, having her be a star, even if she were capable of that, won’t help the stock. And that’s before getting to the growing evidence that the CEO-as-celebrity model is all wet, the companies that tried going that route have found it to be a bust.

In other words, Randle Communications is a concrete example of how much Frost’s cult of personality is costing CalPERS.


1 CalPERS acts a financial guarantor.

2 Some have suggested that Randle Communications took a similar cut, particularly since it actually made the payment to Gordon. However, I saw nothing in the PRA response that suggested that CalPERS had agreed to that. Their bill also depicted the $40,000 as Jon Gordon’s fee. All American Entertainment requires event organizers to agree (if they decide to let AAE handle the speaker billing) to let them deduct the fee rather than having the client cut a check to AAE and the speaker. It would be unethical and arguably fraudulent for Randle Communications to do otherwise.

3 Several CalPERS insiders have suggested that Randle Communications might have simply taken a booking charge out of Jon Gordon’s fee. This might explain how hard Randle Communications was pushing a high-cost, budget-busting vendor to CalPERS. However, this would be fraudulent if Randle Communications did so. We made an extensive Public Records Act request on the financial arrangements for Jon Gordon’s presentation. Randle Communications made no disclosure of taking a fee cut, when professional speaker bureaus do disclose the fee when the client elects to pay the speaker through the bureau, as opposed to cutting a check for the speaker and for the agency.

4 The self-congratulatory KCRA promo is cringe-making. It makes it sound as like doing a podcast is on the order of going to the moon. And this from a TV station which already has sound recording and mixing equipment?

00 PRA #5341 – Randle Communications PO

00 PRA #5341 Randle Invoice for Gordon

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