Pension emoluments: The California and NY pensions are definitely state entities

Yesterday, Reuters reported that seven pensions are paying millions in management fees to a real estate investment firm CIM, which then immediately pays millions in management fees to Trump. I blogged about it yesterday. We are finding more and more evidence that the word “emolument” was used regularly by lawyers to describe private payments and benefits, not just salaries or office-related payments.

There are two legal questions about whether these are emoluments from the state to Trump:

  1. Are the public employee pensions extension of the state?

For the two biggest pensions, the answer is clearly yes as a matter of law.  CalPERS is the creation of California law, as codified in the California Public Employees’ Retirement Law, Section 20002, which states: “The Public Employees’ Retirement System created by Chapter 700 of the Statutes of 1931, as amended, is continued in existence under this part. This system is a unit of the Government Operations Agency” (emphasis added).

The New York State Common Retirement Fund, supervised by the State Comptroller, is treated explicitly by the federal courts as a state entity covered by state sovereign immunity. See McGinty v. New York, 251 F.3d 84, 100 (2d Cir. 2001). For more on the structure of NYS CRF:

2. Do the pensions have enough control or accountability over CIM, the real estate firm,  to make CIM’s payments to Trump a legal extension of the state pensions?  My sense is that an emolument does not depend upon the intent or control of the state entity, but merely that state payments are going to the person in the office of the president, in either a personal or official capacity.  But given that the state pensions constitute a majority of CIM’s capital investment, and given how this issue is analogous to corporate law’s 5% or 10% threshold for legal control, I think one can argue confidently that the state pensions are paying Trump and have the power to stop. But this issue needs to be fleshed out by the experts, and I certainly am not an expert in this field.

Author: Jed Shugerman

Legal historian at Fordham Law School, teaching Torts, Administrative Law, and Constitutional History. JD/PhD in History, Yale. Red Sox and Celtics fan, youth soccer coach. Author of "The People's Courts: Pursuing Judicial Independence in America" (2012) on the rise of judicial elections in America. I filed an amicus brief in the Emoluments litigation against Trump along with a great team of historians. I'm working on "The Rise of the Prosecutor Politicians," a history of prosecutors and political ambition (a cause of mass incarceration), and "The Imaginary Unitary Executive," on the myths and history of presidential power in America.

2 thoughts on “Pension emoluments: The California and NY pensions are definitely state entities”

  1. I am an ex-trustee (NMERB). I agree the CIM Group investment in Soho, which had several phases, was risky and maybe imprudent. First the property acquisition was a double down on a mezzanine loan from CIM to Bayrock that went south. Felix Sater was a principal here though I do not know whether he was still with Bayrock in 2010. He was a convicted felon on securities fraud. Most pension board members are fiduciaries and are held to prudent-investor standard. If I was one on the 7 boards I sure would asking Council about an exit strategy from CIM Fund III


    1. Also CIM Fund III was most likely a limited partnership for the pensions with CIM the general partner. Most of these funds have clauses that give the members a supervisory role. In some cases they can even take over the managing partner – don’t know the facts here


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