CalPERS today moved to cut ties with Medco Health Solutions Inc., the pharmaceutical-benefits company that has been swept up in the pension fund's bribery scandal.
In a terse statement, CalPERS President Rob Feckner said CalPERS is halting negotiations with Medco on a new contract. Medco will continue to run the drug-benefit program for CalPERS through the end of the year.
Earlier this month, CalPERS revealed that the California attorney general and Securities and Exchange Commission are investigating Medco's decision to hire Alfred Villalobos, the "placement agent" accused in a state lawsuit of bribing several pension fund officials.
Medco paid Villalobos $4 million to help secure the drug-benefit contract in 2006, according to a report by Philip Khinda, the Washington lawyer the pension fund hired to investigate irregularities in CalPERS' investment office.
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