Claudia Parsons

Calpers, the California Public Employees Retirement System, manages about as much money the gross domestic product of Israel – around $200 billion at the latest count.

The long term financial security of 1.6 million people, from firefighters to janitors and judges, depends on Calpers getting it right.

America’s biggest pension fund, Calpers built up a gold plated reputation over the decades, founded on steady returns combined with a willingness to pioneer new investments and police public companies as an activist shareholder.

But in an embarrassing reversal of fortune, it said this month it was probing fees paid by outside money managers to win its business, expanding a review of "pay-to-play" schemes at public retirement systems that has spread across the nation.

Corruption, if it happened, is bad enough. But Reuters has been investigating whether pensioners and state workers in California should be equally worried about the fund’s perfectly legal activities.

In the past decade, Calpers has diversified its asset allocation from a portfolio that was almost entirely stocks and bonds into one that also has substantial chunks of money invested in private equity, real estate and inflation-linked assets – a category that includes commodities, infrastructure and forestry.

For a while, Calpers looked smart, hitting a peak fund value of $250 billion in the fall of 2007 as it borrowed money to boost returns and moved into sophisticated collateralized debt obligations, land for residential real estate, as well as commodities.

But as the financial crisis unfolded last year, Calpers lost $90 billion, more than a third of its value, tumbling to $160 billion about a year after the high.

Even from 2002 to 2007, you can see from the graphic below that it was only marginally outperforming the middle-ranked big public pension fund.

Real estate and private equity were the worst performing sectors last year. But Calpers has not retreated from higher risk investments -- just the opposite, in fact.

As the entire pension industry questions what level of risk it should be taking in the aftermath of last year's financial meltdown, Calpers in June increased its target for venture capital and private equity -- what the fund's advisor itself called the highest risk, highest reward bet -- to 14 percent of overall investments, up from 10 percent.

Tell us what you think – how much risk should a public pension fund like Calpers take? Does its vast pool of money mean it can afford to gamble some of that money on high risk investments that could fail?

TEGUCIGALPA - Shortly after we wrote about the "Day of Prayer" in Honduras today, the de facto president, Roberto Micheletti, made a live appearance on state television to lead the people in prayer.

He thanked Christians, both Catholic and Evangelical, for their support.

"I ask for forgiveness from those who for one reason or another do not agree with us, and I ask God to show them the light so they realize it is more important to live in peace," Micheletti said.

"I am here not because men put me here, I am here because God put me here," he said.

"I want the best for my country," Micheletti said. "I believe that up to this moment, I have no reason to be humbled before any man, but before God permanently, because I have acted correctly in my life."

By Mica Rosenberg

TEGUCIGALPA - A month after a coup that has plunged Honduras into its worst political crisis in decades, the country's de facto rulers declared Tuesday an official Day of Prayer for peace.  

State television has been playing announcements for days with the slogan "Let us all pray for our Honduras."

Facing international condemnation of a June 28 coup that has led to a freeze on multinational lending and threats of wider sanctions, Honduras, one of the poorest countries in Latin America, needs all the help it can get.

"We ask God to save Honduras for us. We pray to God for all who are suffering in this crisis, and we pray to God to punish the wicked," a priest saying Mass at the main Catholic cathedral in Tegucigalpa said.

He did not say who he thought should be punished but the leaders of the Catholic Church have criticized exiled President Manuel Zelaya and backed the interim government, headed by Roberto Micheletti.

But at least one of his congregation was praying for the return of the ousted president, a cowboy-hat wearing logging magnate known as Mel, who was toppled after allying himself with the socialist president of Venezuela, Hugo Chavez. 

"Mel is a good Catholic," said Ana Josefa Lopez. "Just now I was praying, saying 'God, open the way for Mel.' If he doesn't come back, we will not have peace."   

On June 28, soldiers seized Zelaya from his home and flew him out of the country. The Supreme Court had ordered his arrest and Congress backed his removal, appointing Micheletti as interim president within hours. Read our latest story on the crisis here.

Zelaya is in exile in Nicaragua and Micheletti's government has rejected almost unanimous international calls for him to be reinstated, vowing to arrest him if he returns to Honduras. 

Around 70 percent of Hondurans are Catholic and 30 percent Evangelical Christian, according to an official at the presidential palace. 

The official said the day of prayer was the initiative of Evangelical church leaders and it was backed by the presidency.  Catholic priest Carlo Magno also appeared on a state channel urging Hondurans to pray for peace.

Religion is a powerful force in this traditionally conservative Central American country, and the Catholic Church has no qualms about getting involved in politics. 

Cardinal Oscar Rodriguez Maradiaga, believed to have been on a short list of possible papal candidates after Pope John Paul II died in 2005, has justified Zelaya's ouster while opposing his expulsion from the country. 

"He doesn't have any authority, moral or legal," the Cardinal told the Spanish newspaper El Mundo earlier this month.

"The legal authority he lost because he broke laws and the moral authority he lost with a discourse full of lies. The most patriotic thing he could do is stay away."

Here's another Reuters blog on the cardinal and a story by my colleague Daniel Trotta.

Zelaya moved to the left after his election in 2005 and allied himself with Venezuela's Chavez, a fierce critic of the United States and of the Cardinal.

Marcia Ines Hernandez, who works in the Church of Guadalupe in Tegucigalpa, said with the crisis looking so intractable, "it's a good idea to be inviting people to pray." 

"Many people are against the Cardinal, and Evangelical church leaders, because they say they should not get involved in politics," she said. "There's a split that's dividing the church as much as the people," she said. 

PICTURES: EDGARD GARRIDO/REUTERS - A Zelaya supporter takes pictures of fellow supporters in front of Metropolitan Cathedral during a cultural event in downtown Tegucigalpa July 12, 2009. AND: A man dresses up as Cardinal Maradiaga during a cultural event in support of Zelaya in downtown Tegucigalpa July 12, 2009, after the Cardinal asked Zelaya to stop attempting to return to Honduras.

TEGUCIGALPA - When ousted Honduran President Manuel Zelaya made a symbolic (and brief) return to his homeland on Friday, what could have been a potentially dangerous situation turned out to be a show for live television -- a far cry from the bloody coups of the past in Latin America.

Even as he walked toward the border in sight of Honduran security forces waiting to arrest him, Zelaya, in his trademark cowboy hat, took a call from CNN's Spanish language channel and conducted a long interview with the broadcaster.

The de facto leader of Honduras, Roberto Micheletti, dismissed the scene as a media circus, "irresponsible, ill conceived and not very serious."

Micheletti's interim government has been using the media, too.

State television has been repeatedly playing rousing music over pictures of pro-Micheletti marches and slogans urging Hondurans to "Hold Firm" for peace and democracy. One of the most frequently played pieces is the stirring theme music from the 1980s movie about U.S. Navy fighter pilots, "Top Gun."

Periodically, authorities cut transmission on all cable channels and broadcast announcements about curfews on local TV stations. Uniformed police officers are hosting news programs. 

At the time when Zelaya was staging his symbolic come-back on the border, state TV stations were showing a meeting of an electoral committee and a demonstration by Hondurans waving blue and white flags and holding placards (some in English) praising Micheletti and denouncing Zelaya.

Television spots accusing Venezuelan President Hugo Chavez, a socialist and ally of Zelaya, of orchestrating the coup are also frequent. 

Venezuelan TV channel Telesur has been blocked in Honduras, leaving many with cable to rely on CNN en Espanol as their main source of television news from outside Honduras. (Spanish speakers should read this article by my colleague Juana Casas)

Most Honduran newspapers support the new government and a pro-Zelaya radio station, Radio Globo, is the one of the few Honduran news outlets giving airtime to Zelaya himself.

This may be the age of the Internet, but Honduras is one of the poorest countries in Latin America and Zelaya's supporters, as he tells it, are "the people."

Some supporters of Micheletti have been using the Internet to try to persuade the outside world that Zelaya's ouster was not a coup. To read a lively debate on this matter see this blog I wrote earlier in the month.

As the crisis drags on with no immediate sign of a solution, tell us who you think is winning the media war.  

Check out some of the web sites of the Honduran newspapers here:

La Tribuna, La Prensa, El Heraldo, Tiempo

PHOTOS BY REUTERS show Zelaya on the border on July 24 and pro-Micheletti supporters a few days after the June 28 coup.

Honduran President Manuel Zelaya was seized by the military, bundled onto a plane in his pajamas and flown out of the country. The people who took over the country last Sunday say it was not a coup.

The interim government, led by Congress speaker Roberto Micheletti, argue that Zelaya's ouster was legal as it was ordered by the Supreme Court after the president had tried to extend his four-year term in office illegally. 
 
They say he was acting unconstitutionally and had to be removed. 
 
The rest of the world seems to disagree. From U.S. President Barack Obama to arch-U.S. rival Hugo Chavez of Venezuela, world leaders have condemned Zelaya's removal and used the term "coup."
 
In the days before the coup, opposition leaders said they planned to impeach Zelaya over his plan to hold an unofficial public survey to gauge support for letting presidents run for re-election beyond the current one four-year term. They said a congressional committee set up to investigate Zelaya found he had violated the Central American nation's laws and would ask Congress to declare him unfit to rule. 
 
Does one unconstitutional act justify another? In a democracy, is it ever justified for soldiers to seize a president and spirit him out of the country? Does the fact that Congress quickly elected a successor, who will serve only until presidential elections in November, make any difference?

 
Defining the nature of the "coup" has been troubling lawyers at the U.S. State Department.
 
By law, no U.S. aid -- other than for the promotion of democracy -- may be given to a nation "whose duly elected head of government is deposed by military coup or decree." 
 
Two U.S. officials said the legal determination of this was complex despite the fact that Zelaya was grabbed by the military and put on a plane to Costa Rica in his pajamas. 
 
"The military moved against the president. They removed him from his home and they expelled him from the country. So the military participated in a coup," said a senior U.S. official. 
     
"However, the transfer of leadership was not a military action. The transfer of leadership was done by the Honduran Congress and therefore the coup, while it had a military component ... is a larger event," he added. 
 
Zelaya was unpopular with many in Honduras, particularly the country's wealthier conservative elite, for his alliance with Chavez. His popularity was down to 30 percent. 
 
Many Hondurans struggle to understand why foreign leaders, from Obama to most of Latin America's presidents, have backed Zelaya. 
 
"They have only listened to (Zelaya) abroad, they haven't listened to the population. But that doesn't matter. We will continue alone," said Adela Guevara, a hotel worker.  
 
Tell us what you think. When is a coup not a coup?

(Pictures in Honduras by REUTERS/Edgard Garrido. Pictures show: Soldiers crawling through a hole in the fence to enter the presidential residency; members of Congress praying before Roberto Micheletti is sworn in as interim president; Zelaya (L) being welcomed by Venezuela's President Hugo Chavez (R) and Nicaragua's President Daniel Ortega (C) after his arrival in Nicaragua June 29, 2009. )

NEW YORK - It's been a good month for the August Wilson play "Joe Turner's Come and Gone" -- first President Barack Obama brought his wife Michelle to see it on their "date night" in New York, and now actor Roger Robinson has won a Tony for best featured actor in a play.

Tony Award host Patrick Neil Harris told producers in the audience that they should "cash in and go presidential" after ticket sales for "Joe Turner's Come and Gone" were boosted by the Obama's attendance.

He suggested "Rock of Ages" become "Barack of Ages," "Phanton of the Opera" should be renamed "Phanton of Oprah" -- referring to TV talk show host Oprah Winfrey, who he said was "close enough to being president" -- and "Mamma Mia" could be called "Obama Mia."

Robinson said there was a certain irony to the visit by America's first black president to a theater which still retains a separate entrance to the balcony section -- a legacy of the days of segregation when blacks were not allowed in the main orchestra section.

"A hundred years ago the president of the United States would not have sat down below," Robinson told reporters back stage after winning his Tony.

"August would have appreciated that irony," he said.

The Pulitzer Prize-winning playwright August Wilson is best known for his cycle of plays chronicling 20th-century African-American life. He died in 2005.

"Joe Turner's Come and Gone" also won a Tony for best lighting design of a play.

(PHOTO: Roger Robinson receives his Tony Award from Jane Fonda (Reuters/Gary Hershorn)

"Green Cities," a new report by a thinktank called Living Cities, examines how American cities have taken the lead on environmental issues in the absence of strong federal action. 

Based on a survey of 40 of the largest U.S. cities, the report points to progress in mandating more efficient city buildings and promoting recycling but notes that talk of creating "green jobs" has been more talk than action.  

Among the main findings:

* Four in five big cities say sustainability is among their top five priorities. Only about one in six says it is not.

* More than three quarters of big cities have or will soon have detailed plans on how to cut greenhouse gas emissions. Nearly all call for cuts of 10 to 20 percent in the next five to 10 years.

* The typical big city has between three and 10 staff members focused on climate change and sustainability. Several have only one staff member dedicated to these issues.

* Budgets vary widely, from $75,000 to $15 million. Most cities reported budgets of between $150,000 and $500,000. 

The report welcomes efforts to mandate green building standards but said mass retro-fitting of existing buildings would do far more to reduce emissions and create green jobs.

Tell us what you think. Is your city doing enough to help the environment? Should the Federal government be doing more?

The new Archbishop of New York Timothy Dolan lived up to his reputation as an extrovert at his first news conference in New York, cracking a string of jokes at his own expense and telling reporters "You're going to have to shut me up." 

Even before he took the podium, while chatting to a monsignor about a visit to a New York food pantry later in the day, he glanced at his own moderate paunch and quipped: "I'm an expert in alleviating hunger." 

When a reporter asked a question about overworked priests, Dolan said he thought he'd heard "overweight priests." 

When another addressed him as "your excellency," he said: "My Mom is the only one who calls me your excellency." 

Asked if he was holding his breath to be named a cardinal -- an appointment widely expected to follow his installation to the most high profile position in the U.S. Catholic Church -- he made a joke about his hometown baseball team, the St. Louis Cardinals: "I'm holding my breath for those Cardinals to come to town," he said.  

At the end he said he hoped the reporters were all coming to Mass, adding: "I'll see the collection basket doesn't go to the press." 

The Archdiocese of New York was streaming the Installation Mass live on its web site.

PICTURE: Archbishop Timothy Dolan participates in a Solemn Vespers ceremony at St. Patrick's Cathedral in New York April 14, 2009. REUTERS/Kathy Willens/Pool

NEW YORK - What have Usher, Melanie Griffith, Brooke Shields and Robin Givens got in common? They have all appeared in the Broadway musical "Chicago," and you could add your name to the list.
    One of the lots on offer in an online auction to raise funds for theater company Playwrights Horizons is a walk-on role in "Chicago."
    Playwrights Horizons is an off-Broadway New York theater company dedicated to supporting and developing contemporary American playwrights, composers and lyricists.  
    Lots in its fund-raising auction, which runs until April 23, include show biz memorabilia such as a script from "The West Wing" signed by Aaron Sorkin, a trapeze lesson, lunch with Steve Buscemi and tickets for various Broadway shows with backstage tours included.
    Other items on offer include a "double date" with actress Patricia Clarkson and the chance to have drinks and see a show with playwrights Tony Kushner and Craig Lucas.

A rabbi, a Mennonite and a Zoroastrian priest were having dinner with the president of Iran -- sounds like the start of a joke, but it happened in New York this week.

President Mahmoud Ahmadinejad had dinner with around 200 people of various faiths including Mennonites, Quakers, United Methodists, Jews and Zoroastrians who said they wanted to promote peace by meeting such a prominent foe of the United States.  You can read our story about the meeting here.

Those who attended the Iftar meal in a Manhattan hotel ballroom had to brave a line of protesters outside who accused them of sitting down with a man little better than Hitler. Major Jewish groups had urged the cancellation of the event.

It was billed as a panel discussion titled: "What does my faith tradition bring to the struggle to eliminate poverty, injustice, global warming and war?"

Speakers included U.N. General Assembly President Miguel D'Escoto Brockmann, who is a Catholic priest, and former Norwegian Prime Minister Kjell-Magne Bondevik, who is a Lutheran, as well as Ahmadinejad.

"I stand here today, even when many of my co-religionists are dismissing, demeaning or boycotting this important conversation," Rabbi Lynn Gottlieb said in her speech, arguing that it was her obligation to engage in dialogue in order to seek peace.

Arli Klassen, executive director of the Mennonite Central Committee, said she welcomed the presence of the protesters outside. "I respect their right to have their opinion. It's especially important where we're talking to a country where these rights (to protest) are not met in the same way," she told Reuters.

"I respectfully disagree (with them) because I believe it's important to dialogue, especially when there are differences," she said. "The consequences of not dialoguing are very severe."

John Brademas, a former Democratic congressman and trustee of a group called Religions for Peace, told the audience religious cooperation could build bridges.

"As people of faith, we want to advocate our respective governments, including the governments of Iran and the United States, to resolve their conflicts through dialogue."

The previous day, Ahmadinejad had met rabbis from a fringe group of ultra-religious Jews who seek the dismantling of the state of Israel.

The rabbis from Neturei Karta International, or Jews United Against Zionism, had showered Ahmadinejad with praise and presented him with a gift of an ornate silver cup.

The church representatives at Thursday's dinner were less friendly, taking the Iranian leader to task over his comments minimizing the Holocaust and urging him to tone down his rhetoric about Israel. Only a few dozen of the 200 or so at the dinner stood to applaud at the end of his speech, and many of them were from the Iranian mission.

Rohinton Dadina, a Zoroastrian priest who said a prayer at the dinner, said if Ahmadinejad's views were changed even 1 percent by what he heard, it was worth holding such events.

"The main reason I wanted to come is I'm hoping that this event would have some influence on President Ahmadinejad in terms of him toning down his rhetoric, him looking towards peace," Dadina told Reuters.

Earlier this week, Nobel laureate and Holocaust survivor Elie Wiesel urged the United Nations to indict Ahmadinejad for inciting genocide rather than allow him to speak at the U.N. General Assembly. His speech there on Tuesday was denounced by Western leaders, human rights groups and Jewish organizations as anti-Semitic.

Tell us what you think -- should people of faith talk to Ahmadinejad? Or should the world shun him as an outcast? Is religion fomenting tension or can it help solve the problems between Iran and the United States?

PICTURE: REUTERS/Claudia Parsons and Lucas Jackson (Ahmadinejad greets religious leaders as he arrives at the dinner (top), listens as Rabbi Lynn Gottlieb speaks, and speaks at the U.N. General Assembly)