California's Highest-Paid Govt Employee Worked for Org Tied to Chinese Espionage

Taxpayers paid $1.7 million to ex-pension fund manager Meng

Meng Yu / YouTube Screenshot
December 1, 2020

California taxpayers shelled out more than $1 million to a man linked to a Chinese espionage program, making him the state government’s highest-paid worker.

Meng Yu, former chief investment officer of the California Public Employees' Retirement System (CalPERS), received more than $1.7 million in total pay and benefits in 2019, according to the latest financial disclosures obtained by Transparent California, a taxpayer watchdog group. Under Meng's leadership the pension fund, which covers two million members in the retirement system and 1.5 million members under its health program, has been subject to federal inquiries into its investments in Chinese government entities.

Meng took the lead at the pension fund after China's Thousand Talents Program recruited him to serve as the deputy CIO of China's State Administration of Foreign Exchange (SAFE), a state-controlled entity. The FBI considers the Thousand Talents Program an example of "China's non-traditional espionage against the United States" that seeks to recruit people to transfer U.S. trade secrets and taxpayer-funded research into the hands of the Chinese government. Meng told the propaganda outlet People's Daily that he worked for SAFE out of patriotic commitment to "the motherland."

Neither CalPERS nor Governor Gavin Newsom's (D.) office responded to requests for comment.

Robert Fellner, the executive director of Transparent California, blasted CalPERS for failing to conduct appropriate oversight for such a high-profile position, pointing to Meng's August resignation.

"One would think that the state’s highest-paid employee earned his position after rigorous scrutiny revealed him to be the best candidate for the job," Fellner said. "If such recklessness is prevalent in a decision of this size and magnitude, how can Californians have any faith that their tax dollars are being spent responsibly in all those areas that evade public scrutiny?"

Meng resigned after the financial news blog Naked Capitalism reported that he may have committed a felony by failing to disclose his sale of 21 securities in 2019. Some of the undisclosed sales involved shares in Chinese companies. The site also argued that Meng's investments in Blackstone Group and other private equity groups presented a conflict of interest, since experts at CalPERS had advocated offloading investments in the firms—a move that would hurt Meng’s personal portfolio.

Meng's China ties attracted federal scrutiny. In February, the Trump administration confirmed that it was "looking at" CalPERS's investment in Chinese defense and state-owned companies to find out whether American taxpayer money was being used to subsidize China's military expansion. Rep. Jim Banks (R., Ind.), a leading China hawk on Capitol Hill, told the Washington Free Beacon that California owes taxpayers an explanation for how Meng was able to go directly from working for a Chinese entity to being the state's top earner.

"Californians not only had to see their hard-earned tax dollars go towards the buildup of our most dangerous adversary's military, they had to pay the guy responsible more than any other public official in their state," Banks said. "That's a raw deal."

Meng's $1.7 million compensation—comprising $1.5 million in pay and roughly $200,000 in benefits—far exceeds that of his predecessor, Theodore Eliopoulos, whom Meng replaced in January 2019. Eliopoulos made just shy of $1 million in total compensation in all of 2018. Meng's 2019 salary also far exceeded that of the second-most compensated California state employee, who made less than $1.3 million.