(The Center Square) – In an exclusive interview with The Center Square, Congressman Kevin Kiley, R-Calif., questioned California state retirement fund objectives, saying they have an “entirely different agenda” that appears to potentially breach fiduciary duties — and puts retirees’ futures at risk in favor of progressive political objectives.
The interview came days after Kiley and two other congressmen announced a probe of CalPERS’ ESG practices in response to an investigation by The Center Square that revealed CalPERS lost 71% of its $468 million investment into its Clean Energy and Technology Fund.
“What we seem to be seeing is an entirely different agenda driving some of those decisions, potentially in violation of the law and to the detriment of Californians,” said Kiley, who chairs the Early Childhood, Elementary, and Secondary Education Subcommittee on the House Committee on Education and Workforce. “Our inquiry here is designed to see exactly what’s going on with that particular investment, and there’s a host of other related policies CalPERS has implemented that do not seem to be driven towards maximizing returns.”
He said the committee will obtain records that are not publicly available under state law and determine whether CalPERS is meeting its fiduciary duty to operate for the exclusive benefit of retirees — or if other, ideological factors are at play.
“This is about protecting the investments and retirement of California’s public employees,” Kiley told The Center Square. “CalPERS has a massive amount of money that is under its investment decisions and it has a legal obligation under both state and federal law to manage those assets for the benefit of the affected employees who rely on those funds for their retirement.”
As of February 17, CalPERS managed assets worth $611 billion. In early December, the libertarian Reason Foundation estimated CalPERS’ pension deficit, or shortfall between its assets and pension obligations, was $166 billion.
Kiley said CalPERS doesn’t seem to be focused on getting the best returns for retirees and the taxpayers who fund the pension.
“When you see these sorts of ESG policies … it is axiomatic that when you’re making investment decisions in order to advance those causes for ideological reasons, then by definition you are not doing it in a way that is singularly driven towards getting healthy returns,” Kiley said.
On February 12, 2026, the House Committee on Education and Workforce sent a letter to CalPERS President and Vice Chair of Investment Theresa Taylor demanding detailed documentation on the CETF investments.
CalPERS had denied a similar request for information by The Center Square was denied, citing public records request inclusions enshrined in California law for certain financial records. No such exemption exists for congressional inquiries.
Kiley, whose district was fragmented by Gov. Newsom’s Prop 50, which suspended the state’s independently drawn Congressional districts until 2030, placed the inquiry in the context of his efforts to change state policy through federal legislation.
“We have been holding Gavin Newsom accountable and have had many victories over him, and so it’s no secret that I was the number one target of his redistricting sham,” Kiley said. “We cut off his federal funding for high speed rail, we reversed — through legislation that I introduced — his ban on gas-powered vehicles, we got him to end his policy of free healthcare for illegal immigrants, and in a whole host of other ways, we have been systematically been counteracting the destructive policies that he’s inflicted on the people of California.
Turning to California’s fiscal challenges, Kiley warned of unsustainable pension obligations and unchecked spending.
“It’s California taxpayers” who will cover the costs,” he said, noting Newsom has expanded the state budget to over $330 billion — a more than 50% increase during his tenure.
Kiley said Newsom’s failure to pay down the state’s $20 billion federal unemployment loan from the COVID era — making California the only state not to do so — as a stark example of the state’s fiscal mismanagement.
Under federal law, this failure has triggered automatic taxes on California small businesses to repay the debt.
“Here you have a very clear example of Newsom taking our state into debt, failing to pay off those debts, and directly impacting our taxpayers here and now,” Kiley said.
The Center Square also recently uncovered that CalPERS’ new Chief DEI Officer, whose listed duties include integrating DEI principles into investment practices, and recruiting staff for DEI-informed proxy voting and ESG investing, has no financial experience.
Another recent investigation by The Center Square highlighted CalPERS’ ties to financing Chinese military technology.
CalPERS officials told The Center Square Tuesday that they will not be commenting on the congressional inquiry.
“We received and are reviewing the U.S. House Committee letter regarding the nearly 20-year-old investment,” wrote CalPERS spokesperson Abram Arredondo in a statement to The Center Square Tuesday. “As their investigation is ongoing, we have nothing further to add.”
