David Crane

Self-described pension expert and venture capitalist David Crane is apparently eager to keep his name in the public light. Crane is back, this time attaching himself to two other wealthy people seeking to influence California politics.

According to a Sacramento Bee story, Crane has announced he will fund the campaigns of legislators who have the “courage” to tackle the major issues facing California. Unsurprisingly, Crane and his wealthy associates have their own idea of what constitutes political courage when confronting our state’s problems.

Crane worked for Governor Schwarzenegger, who commissioned a study by graduate students at Stanford University to examine public pension system's unfunded liabilities. The students used an absurdly low discount rate to measure the unfunded liabilities of the systems, resulting in a high unfunded-liability number that grabbed headlines. Although that discount rate has been rejected by the Government Accounting Standards Boards, a prominent rating agency, and public plan actuaries, Crane raced out and touted that number in repeated op-ed pieces.

The issue of public pensions is a prime example. That David Crane and company are now calling for “honest budgets” and an end to “deceptive accounting” is amusing because it’s hard to think of any report or study that engaged in more creative accounting in the recent past than the Stanford study.

It was Crane who made the fuzzy math claim that the State of California’s public pension costs soared 2,000% since 1999. The deception lay in Crane’s cherry-picked starting point for the comparison, using 2009 when the state’s contribution to the pension fund was the lowest in decades because it took a ‘pension holiday,’ meaning it used assets in the fund to substitute for its contribution. Picking any other year as a starting point would have destroyed this claim.

Crane may be trying to recast himself as a “good governance” watchdog, but his actions and troubled history with the truth speak much louder than his words.