CalPERS Denies Kathleen King’s False Pension Claim

Kathleen King, CEO of the Healthier Kids Foundation, makes a handsome living on taxpayer-funded grants and received a 30 percent raise last year. In a small measure of sanity, she won’t receive a public pension to boot.

In an 9-2 ruling last week, the board of the state’s public employee retirement system, CalPERS, denied King’s appeal. She and the Santa Clara County Health Authority (SCCHA) argued that the nonprofit exec should be eligible for a state pension—despite not having worked for a public agency.

King’s own arguments were used against her in the decision.

Three years ago, the Healthier Kids Foundation—then known as the Santa Clara Family Health Foundation—sued the SCCHA to prevent the release of emails that San Jose Inside had requested through the Public Records Act.

At the time, King’s organization shared office space with the SCCHA, and its records were maintained on a county-controlled server.

In a sworn affidavit from the 2013 case, King and her attorney argued that the emails should not be released because her foundation and the SCCHA were “entirely separate and independent agencies and the relationship between [them] is purely contractual.”

A judge disagreed, noting that the files were under control of the County of Santa Clara, which could release them, as is required of public records in its possession.

San Jose Inside published a series of articles that showed King and Cindy Chavez, not yet a county supervisor, used the organization’s resources to propel their political careers, as well as fund a campaign to approve a half-billion county sales tax increase that King has since tapped into to boost her salary to a quarter-million dollars per year.

Just a few weeks after the May 2013 court decision, a random CalPERS audit of SCCHA operations found that four employees of King’s foundation were receiving improper pensions, as they were not employees of the county entity.

In a motion filed at the April 20 hearing, CalPERS staff presented King’s own arguments in the public records case to show she did not consider herself a public employee in 2013. With a public pension on the line, however, she switched her tune.

The board’s decision upheld a ruling by an administrative law judge, who agreed that King could not be considered a public employee by any reasonable definition. CalPERS staff argued that allowing King to receive a pension “jeopardizes the tax-exempt status of the CalPERS plan.”

Calls to King and the Healthier Kids Foundation were not returned.

Just three years ago, the SCCHA faced off against King in court over the email release. This time, it took King’s side in the pension dispute, which shows just how much the organization’s leadership has changed since former CEO Elizabeth Darrow stepped down at the end of 2015.

King is now a SCCHA board member, and many of the other trustees are political allies of Supervisor Chavez and organizations she ran (Working Partnerships USA; South Bay Labor Council) before becoming a county supervisor.

King first enrolled in the CalPERS system in 2008, when she was hired to lead the Santa Clara Family Health Foundation. At the time, she reported to the SCCHA. That reporting structure changed in 2009, but King’s CalPERS status continued until her nonprofit renamed itself the Healthier Kids Foundation in 2013, following the San Jose Inside stories and pressure from the similarly named Santa Clara Family Health Plan.

As previously reported, Healthier Kids Foundation appears to have been reimagined to keep King on the taxpayer dole while also helping her remain politically relevant. Other than an annual wine tasting event, the nonprofit raises little in the way of corporate gifts, foundation grants or private donations.

According to its 2012 Form 990, “It does not solicit grant requests, but rather makes grants to organizations that serve the same population as the foundation.” In 2012 it donated $125,000 to the VMC Foundation, whose chief executive officer sits on HKF’s board, to “support Santa Clara Valley health & hospital system.” It followed with $25,000 more to VMCF in 2012 and 2014 for “sponsorship of annual gala.” King’s group also supports Working Partnerships ($20,000 in 2012) and other politically active groups, such as People Acting in Community Together (PACT) and Asian Americans for Community Involvement.

Healthy Kids Foundation spent $1,059,555 on lobbying between 2010 and 2014, according to its disclosure filings, and it contributed $465,000 to fund two tax increase political campaigns, most notably the 2012 Measure A.

The organization lacked a clear mission statement in April 2014, when Chavez and the county Board of Supervisors signed off on giving King’s tiny nonprofit $1,168,200 from the Measure A windfall over two years. The 30 percent salary raise followed.

That money was surplus from Measure A, the county tax initiative that King and Chavez organized in 2012 through the Santa Clara Family Health Foundation.

A review of financial statements the Healthier Kids Foundation filed with the IRS shows that more than 80 percent of the nonprofit’s money comes from government grants, and nearly half of its expenses are staff salaries including King and her $147,000-a-year finance director and co-CEO, Emily Hennessy.

Below is the bulk of the CalPERS board meeting:

This article was updated with additional information in the day following its original posting.

Josh Koehn is the managing editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected] or follow him on Twitter at @Josh_Koehn.

26 Comments

  1. Shameless, is there nothing these people won’t try to steel? Wasn’t a quarter million a year enough to pad her nest?

  2. I want to see an arrest and a perp walk.

    Kathleen King looks just like the type of insolent, connected, above-the-law political hanger on who would resist arrest. So I wouldn’t be at all surprised if law enforcement found it necessary to employ stern measures involving police batons, mace, and pepper spray to take her into custody.

  3. I’m glad PERS is going after this woman. I remember trying to get them to go after a woman who got a 30% pay increase in her last year of work. She was entitled to a PERS retirement but inflating her pay to get more is just wrong. PERS was not interested back then which was frustrating to me as that woman was a pushy, ambitious person who did not even have the certification to do her job. The boss man owed her and she boasted of that all the time. Soooooo, this is belatedly gratifying. Go PERS. Get all the cheaters and go back in time if possible.

    • > She was entitled to a PERS retirement but inflating her pay to get more is just wrong.

      Hallalujah! I’m glad to know that someone out there still has a sense of right and wrong.

      You go, girl!

  4. If Ms. King’s contradictory statements were not provided under penalty of perjury, they should have been. She should be prosecuted.

  5. Who were the two boardmembers who voted in favor of her? Also,just remember this when Cindy Chavez runs for office again. Vote her out.

  6. Just think somewhere out there is a man stealing 15% more than she is, and must be getting away with it!

  7. It is so hard for me to understand why when people have so much they still want more. I just don’t get it. Really.

  8. Santa Clara County Taxsuckers just can’t get it together. THIS IS THE JOB OF “MILKTOAST, ASLEEP AT THE WHEEL” JEFF THE DA ROSEN ”

    He can’t cause Cindy Chavez got him into office by fixing the ballot box with her Hispanic Friend “The Counter”.

  9. A better use of the “windfall” would be to provide for the people in need. This is an obscene abuse of taxpayers’ money.
    It is all too incestuous! People disgraced, ie., a former Deputy DA, in one position glibbly move on to another public funded agency. It is an embarassment to Silicon Valley.

  10. What goes around comes around…. I can only hope this will once and for all wipe that stupid smile off her face.

  11. Put her in jail with Shittykawa. And throw Cindy in with them. Makes me sick she’s tapping a quarter million and there’s hungry kids all over the county. She’s a false prophet, scam and a dirty liar.

  12. More solid, sober reasons for voters to reject all tax increase measures and eliminate wasteful government grants. Thieves like this $250K/year bureaucrat need to be weaned from the public trough, as well as the wasteful programs used as facades for such mischief.

  13. the real dirt, the nasty filth in public corruption is floating well in the septic tank that is public employee unions canoodling w/ elected officials. Worker unions were fine a hundred years ago when dealing w/ lumber barons, steel and mining corps. But if you are a public employee you are working for your community, your neighbors, yourself. Public employee salaries/benefits are public information. Create a metric that sets wage and benefits adjusted for cost of living in given geographic areas across the country. That’s it. Employees know what they get, tax payers know what they’ll pay.

    Eliminate the graft we’ve seen all over CA and elsewhere. Anybody want to guess our true debt when it comes to pensions, many of them double-dipped? Public employee union officials have to answer to no one – even employees and there is ZERO protection of public (taxpayer) well being. There are countless examples of pilfering at the public money trough BART, public hospitals, schools, etc, etc. Its not the workers who are bad – its the unions who get in bed w/ politicians and run up our public debt. and this is all on one side of the aisle and we are essentially a one party state, very much like the old USSR. If you are a party member employee you are in good shape.. Otherwise – T.S.

    If one does not like their public union, they must still pay dues and that money can be used for political purposes which is a direct violation of First Amendment rights – but that doesn’t seem to matter.

    Right now Puerto Rico wants to declare bankruptcy to get out from under its mountain of debt – mostly bonds that were floated to pay fat public employee payrolls. Illinois is watching that carefully as it too is has tons of debt accumulated by one certain political party running the state for years in cahoots w/ public unions. California comes in 3rd.

    This is all public information — – – we can continue to whistle in the dark and ignore- – but it will bite us soon- –

    Why not do a series of stories on this??? It would be a great public service – and likely the Metro offices would be bombed.

    • “The state — or, to make matters more concrete, the government — consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can’t get, and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time it is made good by looting ‘A’ to satisfy ‘B’. In other words, government is a broker in pillage, and every election is a sort of advanced auction on stolen goods.”

      ― H.L. Mencken

      • well add to that the temptation to stay in office for a lifetime of jellyroll rides and perks. A 60 minutes story a while back stated that a congressperson must spend 90% of their time hustling for $ for the next election. So what we have is an incipient form of self made dynasties where a politician ends up being a professional troll.

        this is why it is so repulsive to have employee union spreading the wealth of the public worker (oft times, unwillingly) to finance the fat backs that keep the politicos rolling. This is unconstitutional yet it is everyday practice – – – – can you say “All animals are equal, some are just more equal than others.” ?? Public employee unions in the political arena are the vermin of our body politic.

        And the pundits wonder how someone like a D. Trump could overwhelm and titillate the public. Almost all of our politicians would make Eddie Haskell look good.

  14. he real dirt, the nasty filth in public corruption is floating well in the septic tank that is public employee unions canoodling w/ elected officials. Worker unions were fine a hundred years ago when dealing w/ lumber barons, steel and mining corps. But if you are a public employee you are working for your community, your neighbors, yourself. Public employee salaries/benefits are public information. Create a metric that sets wage and benefits adjusted for cost of living in given geographic areas across the country. That’s it. Employees know what they get, tax payers know what they’ll pay.

    That would be awesome Hugh! Could you run for City Council so you could let them know how much it costs to live here? That way, you could give me the raise I havent gotten in 9 years, re-instate all the deductions to my salary, and I could move back to Silicon Valley! Hugh for City Council! Hoooray!

  15. I know several individuals at Applied Materials (touted by Kathleen King as proof of her leadership success), who all tell a much different story. She was universally reviled, and tales of her unethical business dealings were rampant. Her history and actions consistently prove that she is interested in no one but herself. Avoid any support of her or her activities at all costs!