CalPERS was once seen as the great god of good corporate governance. You really had to avoid its target list. But over the years it has had some governance issues of its own.

These days, the problems seem to be escalating. The ongoing pay-to-play scandal has not been kind to the country's largest pension. Former board member Sean Harrigan has emerged as a lightening rod for criticism. The issue revolves around his efforts to solicit "large donations from money managers for a union fund while at CalPERS," notes Business Week. He has been subpoenaed by the SEC and the California attorney general.

In addition, Arvco Financial Ventures, a consultancy run by another ex-CalPERS board member Albert Villalobos, took in $50 million for winning state investment contracts on behalf of Apollo Global Management. While some pensions have decided to ban the use of placement agents, CalPERS has not moved in this direction. Its position is that placement agents can play a role when it comes to identifying small money managers. The criticism will only grow.

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