CalPERS board member Margaret Brown is suing board president Henry Jones, saying he improperly disciplined her over allegations that she misused the CalPERS name and logo for campaign purposes.

Brown filed a civil suit Thursday in Sacramento County Superior Court, naming Jones and the board as respondents. In a Tuesday news release, she said Jones disciplined her in retaliation for her criticism of CalPERS’ investment decisions and its executive pay.

“CalPERS’ executives are furious with my Twitter posts that criticize investment strategies and decry pay increases with lofty incentive bonuses for executives requiring only that they meet standards, especially since our investments continue to underperform. I owe a fiduciary duty to 2 million beneficiaries,” Brown said in the release.

Brown is up for re-election next year. She claims in the suit that the discipline interferes with her board duties and her re-election bid. Brown’s seat on the 13-member board represents all of the retirement system’s active and retired members.

Jones suspended some of Brown’s paid travel and took other disciplinary actions against her in December, after CalPERS executives warned her she was improperly using the retirement system’s name for campaign purposes in a website address and in the handle of a Twitter account, according to communications included in the lawsuit.

The retirement system formally warned Brown twice over her use of the CalPERS name and logo on a campaign website with the name calpersboard.com in 2017, according to letters provided by CalPERS. Brown was elected to a four-year term that started in January 2018.

An executive similarly warned her in September and December of 2019 over her use of a the handle @calperspension, according to letters provided by CalPERS. Ten days after the second warning, Jones sent an email detailing the disciplinary measures.

Jones said he acted within his board-delegated authority as president and that the lawsuit lacks merit.

“I disciplined Ms. Brown in a very measured way that was commensurate with the nature of the violations,” he said in the email.

The suspension of her travel privileges didn’t apply to board meetings or already-approved travel. In addition to the travel suspension, the discipline included censuring her, requiring her to take additional board member training and “taking her conduct into account” when considering committee appointments, according to an email in the lawsuit.

The board’s governance policy specifies that a board president, “at his or her discretion,” may take each of disciplinary measures Jones used, with the exception of the committee appointments, which the policy doesn’t specifically identify.

The term of the discipline ends at the end of this month.

“Ms. Brown’s filing is also unfortunate because it distracts the board and staff from focusing on the critically important task of providing public workers with retirement security in this time of multiple financial and other challenges, and diverts money from that purpose to defending a baseless lawsuit,” Jones said in an email. “It would have been so much better if Ms. Brown had simply accepted responsibility for her actions and moved on.”

Brown did not receive reimbursement for travel to stakeholder meetings in Sacramento and Oakland in February and March, according to a letter an attorney sent on behalf of CalPERS in May that is included in the lawsuit. The coronavirus has canceled in-person CalPERS events since then.

Brown’s lawsuit asks the court to rescind the discipline, provide her an appeal hearing with a neutral third party and provide appeal hearings before taking similar disciplinary actions against any board members in the future.

Her lawsuit describes her as “one of the only watchdogs on the CalPERS board,” and says Jones’ discipline was imposed “unilaterally, arbitrarily, capriciously, and in retaliation for protected activity.”

The lawsuit does not specify the activity she believes the retaliation responds to. Brown did not respond to questions Tuesday morning.

It wasn’t the first time Brown has been disciplined by the board for political activities. Past president Priya Mathur censured Brown in early 2018 for allowing a guest into a restricted area of CalPERS headquarters and letting the guest use a CalPERS copy machine to scan and email documents for a Women Democrats of Sacramento County fundraiser.

Brown has been critical of investment policies, including the board’s growing ventures into private equity. The fund, valued at $391 billion as of Friday, is grappling with the negative impacts to its fund of the recession caused by the coronavirus. In the last full fiscal year, it earned 6.7 percent on its investments, falling short of its 7 percent target.

Her Tuesday statement mentioned CalPERS pay. The board has increased executive pay on a couple of occasions in the last five years after pay surveys found the fund to be on the low end of industry averages.

The suit says other board members used the CalPERS name similarly without being reprimanded. Jason Perez, who uses the Twitter handle @perezforcalpers, also received warnings in 2018 about using the CalPERS logo in election-related posts, according to letters provided by CalPERS.

In an email Perez sent Aug. 29, 2018, Perez acknowledged making a mistake.

“I am embarrassed you had to email me about this,” he wrote in an email to board election coordinators. “I will relay this information to my team, and I will do a better job monitoring my social media. Thank you for bringing it to my attention. I will remove those posts as soon as I send this email.”

This story was originally published June 23, 2020 at 1:57 PM with the headline "Sitting CalPERS board member sues California pension fund president, claiming retaliation."