Our upcoming report goes into detail on the CALPERS huge Governance failures due to conflicts of interest. https://pensionwarriorsdwardsiedle.substack.com/p/pension-fight-club-documentary-premiers

However, as a Progressive, I wanted to point out significant Environmental and Social Justice issues that CALPERS has very wrong.  

The 7 Failures of CalPERS ESG

1. Dripping in Oil: Financing Climate Damage
2. Healthcare Abuse: Profits Over Patients
3. Labor Abuse: Union Busting and Wage Pressure
4. Higher Education Pressure – Trump Loyalty Tests
5. Ignoring Epstein-Linked Governance Risks
6. Supporting Genocide in Gaza via Apollo
7. Supporting ICE as the largest holder of Palantir

My take is that only if a progressive makes it in the June 1st runoff can we reverse these CALPERS ESG trends.   A standard Democrat will keep this status quo, and any of the Republicans would make it worse. 

Their problematic relationship with Private Equity manager Apollo is at the center of these issues.   Apollo founder and CEO Leon Black was the main funder for Jeffrey Epstein from 2008-2019.   We will provide more details on the CALPERS/Apollo conflicts in the report when it comes out soon.   I use Apollo as the prime example of these violations, but it repeated dozens of times with

1. Dripping in Oil: Financing Climate Damage

CalPERS continues to invest billions with private equity firms identified as major fossil fuel backers.

The Private Equity Stakeholder Project has labeled multiple firms in CalPERS’ portfolio—including Apollo as well as other CALPERS major Private Equity managers including Blackstone, Carlye and KKR.   —as among the “Dirty Dozen” of private equity firms heavily exposed to oil and gas. https://pestakeholder.org/reports/private-equitys-dirty-dozen-12-firms-dripping-in-oil-and-the-wealthy-executives-who-run-them/

Private equity allows CalPERS to:

• Maintain fossil fuel exposure
• Avoid transparency
• Circumvent ESG scrutiny

There are EPA violations as well for Apollo portfolio companies.  Alcoa $8mm for air pollution violation, Nexeo Solutions, Univar Solutions, U.S. Silica for other EPA violations https://violationtracker.goodjobsfirst.org/

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2. Healthcare Abuse: Profits Over Patients

Private equity ownership of healthcare systems has become one of the most alarming ESG failures.

Apollo Global Management alone controls or operates hundreds of hospital facilities through Lifepoint Health and ScionHealth.  By far the largest private equity owner and operator of hospitals in the country Apollo has at least 235 locations

The Private Equity Stakeholder Project Hospital Tracker documents:

• Reduced staffing
• Higher costs
• Worse patient outcomes

CalPERS retirees are not just investors in this system. https://pestakeholder.org/pesp-private-equity-hospital-tracker/

They are its victims

CALPERS retirees were affected by Apollo’s harm done to health care in California not only by Private Equity ownership, but with their Private Credit interest in Steward Health care leading to its collapse.[1]

Many fines for Healthcare abuse among Apollo portfolio companies  $125 million by DOJ for Kindred Health, $104 million,  $12mm Gentiva Health, $12mm Odyssey Health Care, Vaughn Regional Medical, Iowa Hospice, Livingston Regional Hospitals, Palestine Healthcare Center. https://violationtracker.goodjobsfirst.org/

3. Labor Abuse: Union Busting and Wage Pressure

CalPERS claims to support labor rights—but only in public markets through proxy voting.

In private equity, the reality is different.

Apollo portfolio companies have been linked to:

• Labor violations
• Wage and hour disputes  at  Qudoba, Michaels Stores, Liberty Life, Tenneco, Federal-Mogal, Chuck e. Cheese
• Union conflicts

The AFL-CIO formally raised concerns in March 2026, citing both labor violations and governance failures tied to Apollo investments. https://aflcio.org/sites/default/files/2026-03/Letter%20to%20Apollo%20Global%20Management’s%20Lead%20Independent%20Director%20Gary%20Cohn%203.11.2026.pdf

 AFL-CIO is an umbrella organization for several unions affiliated with CALPERS including SEIU, AFSCME, AFT, IAFF, and IUPA.    Apollo recent labor violations include Makers Pride, Heritage Grocers, 5 Times Square.     

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4. Higher Education Pressure and Political Influence

The ESG contradictions extend into higher education.   The American Association of University Professors in their February 2026 letter to the SEC voiced their concern https://www.aft.org/sites/default/files/media/documents/2026/Letter_to_SEC_re_Apollo_Global_Management_February_17_2026.pdf

Apollo CEO Marc Rowan has been linked to:

• Funding initiatives tied to political loyalty tests
• Efforts to influence academic institutions
• Connections to federal political structures

These actions raise serious ESG concerns around:

• Academic freedom
• Governance independence
• Political interference

Apollo has a record of educational fraud.  It was fined $191mm for Apollo Education Group by Federal Trade Commission, and $67mm by DOJ for University of Phoenix.

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5. Ignoring Epstein-Linked Governance Risks

The most serious governance failure may be the one CalPERS refuses to confront.

Apollo’s founder Leon Black paid Jeffrey Epstein hundreds of millions of dollars between 2008–2019.

Subsequent disclosures have raised questions about:

• The extent of Apollo’s internal knowledge
• The accuracy of prior disclosures
• Ongoing governance risks

In 2026, the American Federation of Teachers and the American Association of University Professors filed a complaint with the SEC alleging Apollo disclosures around Jeffrey Epstein may have been materially misleading https://www.aft.org/sites/default/files/media/documents/2026/Letter_to_SEC_re_Apollo_Global_Management_February_17_2026.pdf

AFL-CIO wrote a complaint in March 2026 echoing the AFT Epstein concerns.

Several firms have filed stock drop cases against Apollo citing ties to Epstein, and while CALPERS regularly joins these types of suits so far they have not.

CalPERS, despite being a major investor, has largely remained silent.

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6. Gaza, Human Rights, and Political Alignment

Apollo leadership has also been drawn into geopolitical controversy, including:

• Support for politically sensitive initiatives related to Gaza.  Apollo CEO Marc Rowan has been named by President Trump to his Gaza Board of Peace in January 2026.
• In 2018 Rowan immediately after meeting Jared Kushner in the Trump White House Apollo offered his family company a $180 million loan. https://prospect.org/2023/10/21/2023-10-21-moral-authority-of-marc-rowan/

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7. Supporting ICE Through Palantir Holdings

CalPERS holds approximately $734 million in Palantir Technologies.[3]

Palantir’s software has been used by U.S. Immigration and Customs Enforcement (ICE) for:

• Deportation tracking
• Surveillance operations
• Data integration across enforcement systems

This has triggered protests from progressive groups, who argue:

Public pension funds are financing the infrastructure of deportation.  https://readsludge.com/2026/03/31/these-state-pension-funds-invest-in-palantir/

CalPERS has over 40 pages of ESG policies and has signed onto:

• UN Principles for Responsible Investment
• UN Global Compact
• Global Sullivan Principles

Yet its largest capital allocations contradict those principles.

Apollo has a long record of breaking the law with 792 fines reported  by its portfolio companies https://violationtracker.goodjobsfirst.org/

Apollo has many companies that many have privacy concerns with.

Parents of school children nationwide went ballistic in February 2026 when it was revealed the connection between leading school picture provider Lifetouch and Leon Black who was accused of raping a 7 year old girl.  Lifetouch parent Shutterfly who is owned by Apollo paid a $6.75mm settlement for sharing facial scans in 2021. https://www.law360.com/articles/1421673/shutterfly-pays-6-75m-to-end-facial-scan-privacy-claims  

$117 million for Privacy violations from Yahoo.  $16mm for Privacy violations from ADT,  $6.7mm for Privacy violation for Shutterfly, INC

————————————-

What we have now is “Greenwashing through private markets.”  Wall Street remains the priority partner. ESG operates as a branding layer

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Only a progressive Governor can clean up CALPERS and bring it back to the ESG values that it claims.

.

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The U.S. Department of Labor’s latest guidance—Technical Release 2026-01—has been framed as a narrow clarification on proxy voting. https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/technical-releases/26-01   That is not what it is.

It is something far more consequential:

• A major expansion of fiduciary status – mostly for consultants
• A political intervention into ESG and proxy voting
• And, most troubling, a quiet weakening of ERISA’s federal protections by deferring to weak state regulatory regimes on annuities and CIT’s

While it is great for Wall Street and the Insurance industry it is bad for participants and plans.  Taken together, this release does not reduce litigation risk for plan sponsors. It guarantees more of it.  

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1. The Real Headline: Consultants Are Now Fiduciaries (Whether They Like It or Not)

The DOL makes one point unmistakably clear:
If you influence proxy voting, you are likely a fiduciary.

Under Employee Retirement Income Security Act of 1974, fiduciary status is functional—not based on titles or disclaimers. The DOL doubles down on that principle:

• Control over proxy voting = control over plan assets
• Advice on proxy voting for a fee = fiduciary investment advice
• Disclaimers “are not determinative”

This is not just about proxy advisory firms like ISS or Glass Lewis.

It directly implicates:

• Investment consultants designing proxy policies
• OCIO providers implementing governance frameworks
• Advisors influencing ESG or stewardship decisions

In practice, firms that have long operated in a gray zone—collecting fees while avoiding fiduciary responsibility—are now exposed.   And with more consultants being secretly owned by Private Equity, the exposure increases.

And once you are a fiduciary, you are also a party in interest.

That is where the litigation begins.

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2. The Political Overlay: ESG Is the Target, Not the Rule

The release is tied directly to executive branch policy and makes repeated references to:

• “Non-financial” considerations
• “Politically motivated” proxy voting
• The need to focus solely on risk-adjusted return

This is not neutral guidance. It is a federal attempt to reshape proxy behavior without formal rulemaking.

The practical effect:

• ESG-related proxy votes become legally risky
• Documentation burdens increase dramatically
• Plaintiffs’ attorneys gain a roadmap to challenge votes

Ironically, in trying to suppress ESG influence, the DOL has created a new litigation framework around proxy decision-making.

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3. The Most Dangerous Move: Weakening ERISA Preemption

Buried in the release is a far more consequential shift—one that has nothing to do with proxy voting.

The DOL argues that certain state laws regulating proxy advice are not preempted by ERISA, because:

A prudent ERISA fiduciary would never engage in the conduct those laws regulate.

This sounds harmless. It is not.

It represents a fundamental change in ERISA preemption doctrine.

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Traditional ERISA Preemption

For decades, ERISA has operated on a simple premise:

• Federal law governs employee benefit plans
• State laws that “relate to” plans are broadly preempted
• The goal is national uniformity and participant protection

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DOL’s New Framework

The DOL now suggests:

• State laws can coexist with ERISA
• As long as fiduciaries theoretically avoid triggering them

This creates a dual system:

• Strict federal duties (on paper)
• Weak, fragmented state regulation (in practice)

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4. Why This Matters: Annuities and CITs

This is where the release intersects directly with the biggest risks in the retirement system.

A. Annuities

Insurance products—especially general account annuities—are governed primarily by state law.

Those laws:

• Do not require full transparency of spreads
• Allow discretionary crediting rates
• Often obscure underlying asset risk (private credit, mortgages, etc.)

Under the DOL’s logic:

• ERISA fiduciaries should act prudently
• Therefore weak state regulation is “good enough”

This is a dangerous fiction.

It effectively allows:

• Hidden insurer profits
• Undisclosed credit risk
• Single-entity exposure fixed annuities masquerading as “stable value”

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B. Collective Investment Trusts (CITs)

The same issue exists—arguably worse—with CITs.

Regulated by:

• State banking authorities (e.g., Pennsylvania, New Hampshire, Maryland)
• The Office of the Comptroller of the Currency in some cases

These structures:

• Avoid U.S. Securities and Exchange Commission disclosure requirements
• Frequently embed:
  • Private equity
  • Private credit
  • Annuities and other Insurance products

Participants often have no idea what they own.

Again, the DOL’s position implies:

• ERISA fiduciaries should investigate these structures
• Therefore weak state oversight is acceptable

That is not regulation. That is abdication.

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5. The Internal Contradiction: More Fiduciaries, Less Protection

This is the core problem.

The DOL is simultaneously:

Expanding fiduciary status

• More actors subject to ERISA
• More potential defendants

While weakening federal oversight

• Allowing state regimes to stand
• Accepting opacity in key investment structures

This creates the worst of both worlds:

• More liability
• Less transparency

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6. Litigation Implications: A Plaintiff’s Roadmap

For those paying attention, this release is not a shield—it is a weapon.

It supports arguments that:

1. Consultants are fiduciaries

• Especially where they influence governance or structure

2. Advisory relationships trigger prohibited transaction scrutiny

• Fees + influence = conflicts

3. Discovery should expand

• Into proxy processes
• Into CIT underlying assets
• Into annuity crediting mechanisms

The logic aligns directly with Cunningham v. Cornell:

• Defendants bear the burden of proving exemptions
• Plaintiffs are entitled to discovery into hidden arrangements

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7. The Bigger Picture: A Gift to Wall Street, Not Plan Sponsors

The DOL claims this guidance will reduce confusion and protect plans.

In reality, it does the opposite.

It:

• Expands fiduciary liability to more actors especially consultants
• Encourages reliance on opaque investment structures
• Preserves weak state regulatory frameworks
• Increases litigation exposure for plan sponsors

Meanwhile:

• Insurance companies continue to hide spreads
• Private equity remains embedded in CITs without disclosure
• Consultants collect fees while navigating newly expanded liability

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Conclusion: More Risk, More Opacity, More Litigation

Technical Release 2026-01 is not a minor clarification.

It is a structural shift.

• It expands who can be sued
• While weakening the regulatory foundation meant to protect participants

And in doing so, it reinforces a troubling reality:

The modern retirement system is increasingly built on opaque structures, weak oversight, and conflicted intermediaries—with participants bearing the risk.

The DOL’s Fiduciary Rule Is Really a Gift to Wall Street—And a Trap for Plan Sponsors

DOL 401(k) Fiduciary Rule Enables Accounting Fraud 

On March 11, 2026  Senator Ron Wyden wrote a letter to the DOJ, Treasury, and the FBI concerning Leon Black the founder and CEO of Apollo https://www.finance.senate.gov/imo/media/doc/wyden_letter_to_doj-treasury-fbi_on_epsteinpdf.pdf    This in addition to the American Federations of Teachers letter to the SEC on Apollo lying about their ties with Epstein which was followed by legal suits  https://www.aft.org/sites/default/files/media/documents/2026/Letter_to_SEC_re_Apollo_Global_Management_February_17_2026.pdf  and another letter from the AFL-CIO

Senator Wyden makes a direct link between payments and Epstein trafficking operations “Epstein used the money you paid him to fund his sex trafficking operations.”  This was documented in a formal U.S. Virgin Island settlement and created financial linkage between Apollo leadership and Epstein criminal enterprise.

This is now a known, admitted-use-of-funds risk, not a reputational rumor Wyden repeatedly raises:

“extraordinary sums… may not have been exclusively for legitimate services”

Payments far exceeding normal advisory compensation

Lack of adequate explanation

$170 million paid to Epstein

~30x what major law firms were paid for similar work

If disclosures about these relationships were incomplete, this supports securities fraud exposure

Which directly ties to:  Stock drop litigation and Ongoing legal liability

Wyden raises Money Laundering issues :  Such as the use of Epstein as a “middleman” for payments to women and Payments routed through a “bogus 501(c)(3)” charity to: avoid disclosure and maximize deductions.  This introduces: criminal exposure risk  tax fraud exposure  systemic governance failure.

---

There is ample Evidence of Concealment and Intent.  Like the line Epstein performed tasks that “will need to remain unknown.”   Combined with: instructions to avoid public disclosure and structuring payments to hide identity.

Wyden states: his Investigation ongoing for nearly four years.  Requests for documents remain unanswered.  New DOJ disclosures increase concern.  If Leon Black does not respond: It creates a documented fiduciary trigger: Known risk + no mitigation Allegations formally raised  No response = no remediation

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With Escalating legal exposure to pension plans with a Congressional inquiry, DOJ records ongoing litigation, this clearly Governance failure.  With this Apollo connection widely known since 2019 Public pension  Board awareness presumed.   And no plans with the exception of Pennsylvania have made even a small visible corrective action.  

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The Pension Fiduciary Problem A pension fiduciary must ask:

• Are risks:
  • known? → YES
  • material? → YES
  • unresolved? → YES

👉 That creates:

A duty to reassess and potentially divest

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“Senator Wyden’s letter transforms the Apollo/Epstein issue from a reputational concern into a documented, multi-dimensional risk: securities fraud, tax irregularities, money laundering exposure, and even national security implications. If Apollo leadership fails to respond, public pension fiduciaries are left holding an asset where the risks are known, material, and unresolved—a textbook case for divestment.”

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“This is no longer about what Apollo did in the past. It’s about what pension fiduciaries know today—and whether they can justify continuing to hold an investment under active federal scrutiny with unanswered questions at its core.”

List of Plans with Apollo Funds

Alaska Permanent Fund Apollo PE funds

Arizona PSPRS Apollo PE funds

California Public Employees’ Retirement System (CalPERS) Apollo Investment Fund VI and related vehicles

California State Teachers’ Retirement System (CalSTRS) Apollo Investment Funds VI, VII, IX, X; Hybrid Value II

Chicago Teachers Pension Fund 2024 performance confirms Apollo PE/PC as manager

Colorado PERA Apollo Investment Funds III,IV,V,VI, VII, Distresssed DIF

Colorado School  Apollo Credit Opp III  & DIF

Connecticut Retirement Plans & Trust Funds Apollo Investment Fund VIII

Florida State Board of Administration Apollo PE funds IV, V PC Accord V and VI

Georgia Teachers Retirement System

Idaho PERSI Apollo PE funds

Illinois Teachers Retirement System Apollo PE funds X

Illinois Municipal Apollo Credit Wilshire

Indiana Public Retirement System (INPRS) Apollo Origination Partnership

Iowa Public Employees Retirement System Apollo PE funds Wilshire

Kansas Public Employees Retirement System Apollo PE funds VIII,IX

Kentucky  Teachers Apollo REIT & Apollo Stock

Los Angeles City Employees’ Retirement System (LACERS) Apollo PE funds VI

Los Angeles (CA) Water and Power has PE fund X

Louisiana Teachers’ Retirement System of Louisiana (TRSL), Apollo Credit, Natural Resources

Maryland State Retirement & Pension System ?PE funs

Massachusetts PRIM Apollo PE funds

Michigan RS  Apollo Investment fund VIII, IX  Hybrid Value Funds, Credit/ Opportunistic Credit

Minnesota State Board of Investment Apollo/Athene Dedicated Investment Program II

Mississippi PRS Apollo VIII IX Private Equity funds

Montana Board of Investments Stock holdings?

Nebraska Investment Council  India Property Fund II LLC.

New Hampshire Retirement System  Apollo PE funds

New Jersey Division of Investment: Stock holdings?

New Mexico State Investment Council Apollo PE VII, VIII PC 

New York City Teachers’ Retirement System  Apollo PE funds

New York City (NY) ERS PE $500mm 2013

New York City (NY) Police PE fund VI

New York State  Apollo PE VIII 

North Carolina Retirement Systems Apollo PE funds VI, VII

Ohio Highway Patrol SHPRS: Apollo PE funds

Ohio SERS: “Core Farmland Fund, LP Wilshire

Ohio State Teachers Retirement (STRS)  PE Apollo S3 Equity Hybrid Solutions

Ohio Public OPERS Apollo PE funds, Oregon Public Employees Retirement Fund (OPERF), Apollo PE VI, VII, VIII, IX.

Oregon PER recently comitted $300mm to Apollo distressed debt fund as well as earlier funds like Apollo PE IX

Pennsylvania PSERS Apollo PE funds IV  $620mm

Pennsylvania SERS Apollo PE funds VI- VIII

Rhode Island Retirement System Apollo PE VIII, IX

San Diego City Employees Retirement System Apollo PE funds

San Francisco (SFERS) San Francisco Employees’ Retirement System Apollo PE funds Wilshire

South Carolina RS $750mm

South Dakota Retirement System Apollo PE funds

Texas County & District  PE fund X

Texas ERS  Apollo Credit Strategies

Texas Municipal   Fund VIII

Texas TRS Teachers’ Retirement  Apollo PE funds

Tennessee Consolidated Retirement System Stock holdings?

San Francisco Employees’ Retirement System Apollo PE funds

San Diego City Employees’ Retirement System  Apollo PE funds

University of Calfiornia PE VII, VIII  Principal  Wilshire

Virginia Retirement System Apollo PE funds

Washington State Investment Board (WSIB) Apollo S3 Equity & Hybrid

Divest From Apollo Now—Before Markets, Courts, or Congress Force It

Much has been written about retail investors getting trapped in private credit funds—gates, redemption limits, and liquidity mismatches at firms like Blackstone and Blue Owl.

But that narrative misses the real story.

The largest exposure of individual investors to private credit is not in retail funds at all.

It is inside the annuities they already own.

And it’s not even close.

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The Hidden Portfolio Behind Annuities

U.S. life insurers hold roughly $4.4 trillion in annuity reserves. That is the pool of money backing:

• Fixed annuities
• Indexed annuities
• Pension Risk Transfer (PRT) annuities

What backs those promises?

Not Treasuries. Not traditional investment-grade bonds.

Increasingly, it is private, illiquid credit:

• Private placements
• Direct lending
• CLO tranches and structured credit
• Commercial and residential mortgage loans
• Real estate debt
• Asset-backed private lending

Let’s be clear:

A mortgage loan originated and held by an insurer is economically indistinguishable from private credit.

It is:

• Privately negotiated
• Illiquid
• Not mark-to-market
• Often internally or privately rated

Calling it “mortgage lending” instead of “private credit” is a labeling exercise, not a risk distinction.

---

Do the Math—Even Conservatively

Public data shows:

• ~$849 billion in private placements
• ~$788 billion in mortgage loans
• ~$1.7 trillion in private bonds

Even if you take a conservative approach and only count:

👉 Private placements + mortgage loans = ~$1.6 trillion

Annuities represent roughly two-thirds of insurer liabilities.

That implies:

👉 Hundreds of billions to over $1 trillion of private/illiquid credit exposure backing annuity investors

And that is before fully counting structured credit and internally rated assets.

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Retail Private Credit Is Smaller Than You Think

The products dominating headlines:

• Non-traded BDCs: ~$230 billion
• Credit interval funds: ~$120 billion

Total: ~$350 billion

That is what the media calls “retail private credit.”

Compare that to annuities:

👉 3x–5x larger exposure—minimum
👉 Far less transparent
👉 Far less understood by investors

The industry is focused on the storefront window.

The real risk sits in the warehouse.

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Apollo, Athene, and the Industrialization of Private Credit in Annuities

No firm better illustrates this transformation than Apollo Global Management and its insurance affiliate Athene.

Apollo’s model is simple:

1. Acquire or control an insurance balance sheet
2. Use it as a permanent capital vehicle
3. Allocate heavily to private credit, private mortgages, and structured assets
4. Capture spread between portfolio yield and credited rate

Athene is not an outlier—it is the model.

This is the financialization of retirement savings:

• Annuities become funding vehicles
• Private credit becomes the asset base
• Spread becomes the profit engine

From a participant perspective:

👉 You think you own a “guaranteed product”
👉 You actually own exposure to a leveraged, opaque credit portfolio

This is particularly acute in:

• Pension Risk Transfers (PRTs)
• Fixed indexed annuities
• Stable value products backed by general accounts and most separate account products

Where credit risk, liquidity risk, and valuation risk are all concentrated in a single entity.

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The Illusion of Safety

Retail private credit investors know they are taking risk.

Annuity investors are told they are avoiding it.

They hear:

• “Guaranteed”
• “Principal protection”
• “Stable value”
• “Lifetime income”

But in reality, they are exposed to:

• Illiquid credit portfolios
• Discretionary crediting rates
• Opaque valuation processes
• No meaningful benchmark

And most importantly:

👉 No way to measure the spread being extracted from them

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The Regulatory Blind Spot

Regulators focus heavily on:

• Retail fund liquidity
• Redemption gates
• Investor suitability

But largely ignore:

👉 Private credit embedded in annuity balance sheets

Why?

Because annuities sit in the insurance regulatory regime, not the securities regime.

That means:

• No daily NAV
• Limited disclosure
• Heavy reliance on internal or private ratings
• Minimal transparency into underlying holdings

In short:

👉 More risk, less visibility

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The Real Risk Isn’t Gates—It’s Mispricing

Retail private credit funds can gate investors.

Annuities do something more dangerous:

👉 They hide risk through smoothing

• Losses are delayed
• Valuations lag reality
• Crediting rates are discretionary

The investor never sees volatility.

Until it shows up as:

• Lower crediting rates
• Reduced benefits
• Or in extreme cases, solvency stress

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The Bottom Line

The financial media is focused on the wrong problem.

Retail private credit funds are:

• Visible
• Controversial
• Relatively small

The real giant is hidden:

👉 The U.S. annuity market is the largest conduit of private credit exposure to individual investors

And it operates with:

• Less transparency
• Less accountability
• Less investor understanding

Mortgage loans, private placements, structured credit—it’s all the same story:

👉 Illiquid credit risk wrapped in the language of safety

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Appendix: CDS Pricing and the Missing Downgrade Trigger

One of the most important—and completely ignored—tools for evaluating annuity risk is credit default swap (CDS) pricing.

CDS spreads provide a real-time, market-based measure of insurer credit risk.

Yet:

• Plan sponsors rarely review CDS levels
• Regulators do not require it
• Contracts almost never include downgrade protection mechanisms

This is a critical failure.

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Why CDS Matters

For firms like Athene, CDS spreads reflect:

• Exposure to private credit
• Structured asset risk
• Liquidity concerns
• Market perception of solvency

When CDS spreads widen, the market is signaling:

👉 Rising default risk

But annuity investors see none of this.

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The Missing Protection: Downgrade Triggers

In institutional markets, credit-sensitive contracts often include:

• Downgrade triggers
• Collateral posting requirements
• Termination rights

Annuities and PRT contracts typically include none of these.

That means:

👉 Participants are locked into a single-entity credit exposure
👉 With no exit mechanism as risk rises

Which is why I believe most Annuity contracts are ERISA prohibited transactions in retirement funds

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What Should Be Required

At a minimum:

• CDS monitoring as part of fiduciary review
• Contractual downgrade triggers
• Transparency into general account asset allocation
• Benchmarking against market credit yields

Without these protections:

👉 Annuity investors are effectively uncompensated credit risk providers

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Final Thought

If CDS spreads are rising…

If private credit exposure is growing…

If downgrade protections are absent…

Then the conclusion is unavoidable:

👉 Annuities are not eliminating risk—they are concentrating and concealing it

CDX Financials Launch: The Daily Pricing Revolution That Exposes Annuity Risk

Why the Private Credit Meltdown May Take a While

Apollo’s garbage dump – Athene loading up on risk endangers retirees in PRT’s and other annuity investors

The 401(k) Private Credit Lie: 98% of the Risk Is Already There—Hidden Inside Annuities

TIAA Traditional Annuity Is a Prohibited Transaction

Annuity Risk measured by Credit Default Swaps (CDS)

Retirement Plans Must Demand Downgrade Provisions for Any Annuity

Why Offshore Structures and Weak State Regulation Make Most Annuities ERISA “Prohibited Transactions”

State Guarantee Associations behind Annuities are a Joke

Tomorrow marks a quiet but potentially transformative development in the credit markets: the launch of the CDX Financials index, administered by S&P Global.

At first glance, this may look like just another derivatives benchmark. It isn’t. For those of us focused on ERISA fiduciary risk, annuity opacity, and prohibited transactions, this is a major step toward finally quantifying what insurers have long kept hidden.

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What Is CDX Financials—and Why It Matters

6

The CDX Financials index is a standardized basket of credit default swaps (CDS) referencing major financial institutions—insurers, asset managers, and banks. It will trade daily, providing transparent, market-based pricing of credit risk.

Critically, the index includes names central to the retirement system:

• Apollo Global Management (via Athene / Apollo Debt Solutions)
• Lincoln National Corporation
• Prudential Financial
• American International Group
• MetLife

These are not abstract entities—they are the core counterparties behind fixed annuities, stable value products, and pension risk transfer (PRT) deals.

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Why This Changes the Game for Annuities

For years, insurers have argued that:

• Credit risk is “long-term” and not mark-to-market
• Crediting rates are sufficient proxies for safety
• Benchmarks like money markets or Hueler are “good enough”

That framework collapses with daily CDS pricing.

CDS spreads provide a real-time, market-based measure of default risk. When spreads widen, the market is signaling:

“This insurer is becoming riskier—right now.”

That matters because:

• Fixed annuities are 100% exposed to a single insurer balance sheet
• PRT annuities replace PBGC protection with insurer credit risk
• Participants are not compensated for that risk transparently

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From Theory to Damages: A Litigation Breakthrough

5

You’ve already laid the groundwork in your CDS framework:
👉 https://commonsense401kproject.com/2025/10/29/annuity-risk-measured-by-credit-default-swaps-cds/

The CDX Financials index now enables something courts have struggled with:

A Clean Damages Framework

1. Observe CDS spread for insurer (e.g., Athene, Prudential)
2. Translate spread into implied credit risk premium
3. Compare to participant credited rate
4. Quantify under-compensation for risk

This directly supports:

• §404 prudence claims (failure to evaluate risk)
• §406 prohibited transaction claims (hidden spread extraction)
• Post-Cunningham v. Cornell burden shifting

In short:
CDS turns “opaque insurer discretion” into measurable economic harm.

---

Spillover Effect: Pricing the Unpriced

Even insurers not included in CDX will feel the impact.

Why?

• CDS markets are relative-value driven
• Traders will arbitrage spreads between index constituents and non-constituents
• This creates shadow pricing for the entire insurance sector

So even if a plan uses:

• A smaller insurer
• A separate account annuity
• A white-labeled stable value product

…it becomes increasingly difficult to argue:

“There is no observable market price for this risk.”

---

The Apollo / Athene Problem Comes Into Focus

7

This is where the implications become particularly acute.

Firms like Apollo Global Management have built insurance platforms (notably Athene Holding) that:

• Load general accounts with private credit and private mortgages
• Rely on internal or lightly regulated valuation frameworks
• Generate profits through spread capture, not disclosed fees

CDS pricing cuts through that opacity.

If Athene’s CDS widens while:

• Crediting rates stay flat
• Or lag peers

…it becomes powerful evidence that:

Participants are bearing increasing credit risk without compensation. https://commonsense401kproject.com/2026/03/26/apollos-garbage-dump-athene-loading-up-on-risk-endangers-retirees-in-prts-and-other-annuity-investors/

Jeffrey Epstein’s Pension Destruction Engine -Athene -Creating a new class of victims – over 200,000 pensioners

---

Implications for Fiduciaries—No More Excuses

With CDX Financials:

• Daily, independent credit pricing exists
• Comparable insurers are observable
• Risk-adjusted comparisons are feasible

Fiduciaries can no longer credibly claim:

• “We didn’t have a benchmark”
• “Risk was unobservable”
• “All insurers are roughly the same”

That argument was already weak. Now it’s gone.

---

What Comes Next

This is just the beginning.

Expect:

• Expert reports incorporating CDS curves and CDX spreads
• Discovery requests for insurer hedging and internal credit models
• Damages models tied to spread widening over time
• Increased scrutiny of:
  • PRT annuities
  • Stable value wrap providers
  • Fixed annuity options in 401(k)s

---

Bottom Line

The launch of CDX Financials is not just a market event—it is a transparency event.

For decades, insurers have operated in a space where:

• Credit risk was hidden
• Spreads were undisclosed
• Benchmarks were manipulated or meaningless

Now, with daily CDS pricing:

The market is finally putting a price on the risk that participants were forced to bear in the dark.

And once risk is priced…
liability is not far behind.

Retirement Plans Must Demand Downgrade Provisions for Any Annuity

Click to access 1482043_cdxfinancials45finallist.pdf

TIAA Traditional Annuity Is a Prohibited Transaction

Public pensions, normally the first to lead securities fraud cases, have been notably absent from the Apollo/Epstein stock drop litigation. That absence may reflect a deeper conflict: the same pensions that could sue Apollo for misleading disclosures are heavily invested in its private equity and private credit funds, where valuations remain opaque and untested.

In every major stock drop case, public pensions rush to the courthouse. This time, they haven’t—and that silence may be more revealing than any lawsuit. When your investment manager controls not just your stock portfolio but your private equity, your credit book, and your reported returns, suing becomes more than a legal decision—it becomes a threat to the entire system.”

Public pensions. have the largest losses, the best lawyers, and a fiduciary duty to act.
From Enron to Wells Fargo to Boeing, state and union pension funds have led the charge—often becoming lead plaintiffs in billion-dollar securities cases.

So when Apollo Global Management lost billions in market value amid new disclosures tied to Jeffrey Epstein, the expectation was simple: Public pensions would sue.  But so far, they haven’t. And that silence may tell you everything you need to know.

In 2019 and again in 2021, many institutional investors were told, in substance, that the Epstein problem at Apollo was largely personal to Leon Black and was being cleaned up.  Almost all public pensions blindly accepted Apollos’ work.  However, Epstein files released in February 2026 showed this to be a lie.  Teacher Unions AFT & AAUP’s complaint to the SEC directly challenges that sanitized version, arguing that the public record now suggests a broader and deeper institutional relationship. https://www.aft.org/sites/default/files/media/documents/2026/Letter_to_SEC_re_Apollo_Global_Management_February_17_2026.pdf

Apollo is now facing a Classic Stock Drop Case with multiple securities lawsuits alleging: Misleading disclosures about its relationship with Epstein.  Failure to fully inform investors about the scope of those ties. Material omissions that affected stock valuation https://www.bitget.com/amp/news/detail/12560605353269

This is standard Rule 10b-5 territory—the same legal framework used in nearly every major securities fraud case.  The stock fell sharply following new reporting and disclosures.
Law firms quickly filed class actions.   Everything about this case looks familiar—except one thing: The usual plaintiffs are missing.

Historically, public pensions dominate these cases: They step in because: They hold large positions. Courts prefer institutional investors as lead plaintiffs. They can drive litigation strategy.  But in the Apollo/Epstein litigation: No major public pension has stepped forward.That is not normal.  That is the story.

Apollo is not just another stock.  A private equity manager.   A private credit lender.  A core counterparty to pension systems. Limited partners in Apollo private equity funds. Investors in Apollo private credit vehicles.  They are clients, partners, and counterparties—not just shareholders.

More than 60 major US Public Pension plans  NY,CA,OH,FL,TX etc. have $ multimillion exposure to Apollo Private Equity and Private Credit –  See list at bottom https://commonsense401kproject.com/2026/03/23/divest-from-apollo-now-before-markets-courts-or-congress-force-it/

The risk to public pensions is valuation risk.  Private equity and private credit are: Not marked to market valued internally or with lagged models.   Litigation could expose overvaluation and conflicts leading to huge portfolio write downs, lower reported returns, and lower pension investment staff bonuses.  These billions in hidden losses would be a huge political issue for state pensions.

Contrast Apollo with prior Epstein-related cases: Banks like Barclays faced investor lawsuits and public pensions were willing to engage.  But Apollo is different.  Because Apollo sits at the center of: Private credit, Private equity, and Pension return assumptions.

The biggest risk to pensions is not the stock drop.  It is what discovery could reveal: Internal valuation practices, Private credit exposures, Conflicts between investor disclosures and internal knowledge.  

In every major securities fraud case, public pensions rush to the courthouse. This time, they haven’t.  And that silence is not accidental.  When your investment manager controls your private equity, your credit book, and your reported returns, suing them is no longer just a fiduciary decision—it’s a systemic risk.”

The Epstein files raised questions about power and accountability.  The Apollo lawsuits may answer a different question: Who is willing to act—and who is too exposed to speak?

The headlines are starting to catch up. Private credit is wobbling. Defaults are ticking up. Liquidity is tightening. Retail investors—particularly in interval funds and BDCs—are facing gates and delays.

But if you believe the media narrative, you would think this is primarily a retail-driven problem.

It’s not.

Retail is the visible edge of the iceberg, not the mass beneath it.

---

Follow the Real Money

If we step back and look at where private credit actually sits in the U.S. financial system, a very different picture emerges:

• ~50% — Life Insurance Balance Sheets
• ~30% — Public Pensions
• ~5% — ERISA Plans / 401(k)s
• ~10% — Endowments & Foundations
• ~5% — Retail / Wealth Channels

Even if you debate the exact percentages, the conclusion is unavoidable:

Roughly 80% of private credit is held by institutions that have every incentive to avoid marking assets to market.

And that is why this “meltdown” is going to take time.  https://commonsense401kproject.com/2026/03/07/private-credit-the-30-markdown-nobody-wants-to-admit/

---

The Incentive to Delay Reality

1. Life Insurers: The Epicenter of Risk

Life insurers—particularly those tied to private equity sponsors—are now the largest holders of private credit.

These assets sit inside:

• General accounts
• Fixed annuities
• Pension Risk Transfer (PRT) deals

Apollo’s garbage dump – Athene loading up on risk endangers retirees in PRT’s and other annuity investors

•  

The problem is simple:

• If insurers mark private credit down,
  → capital ratios fall
  → ratings agencies react
  → regulators demand more capital

And that triggers a cascade:

• Lower ratings → less annuity sales
• Higher capital requirements → lower profitability
• Potential liquidity stress

Annuity Litigation   https://commonsense401kproject.com/2026/03/01/annuities-as-prohibited-transactions-in-retirement-plans/   https://commonsense401kproject.com/2026/01/23/fixed-annuities-are-the-dirty-secret-hiding-in-401k-and-403b-plans/

• https://commonsense401kproject.com/2026/03/24/the-401k-private-credit-lie-98-of-the-risk-is-already-there-hidden-inside-annuities/
•  

So what do insurers do?

They don’t mark to market unless they absolutely have to.

Instead:

• Assets are held at book value
• Internal models and private ratings dominate
• Loss recognition is delayed

---

2. Public Pensions: The Second Pillar of Denial

Public pensions are the second largest holders of private credit—and arguably the most politically sensitive.

Unlike insurers, their constraint isn’t regulatory capital.

It’s optics and incentives.

If public pensions mark private credit to market:

• Reported returns fall
• Funded status deteriorates
• Contribution pressure rises

And perhaps most importantly:

Performance bonuses disappear.

Many large public plans pay millions in incentive compensation tied to reported returns—returns that are increasingly influenced by illiquid, model-priced assets.

There is no appetite to unwind that system.

---

A Tenfold Shift Hidden in Plain Sight

Over the past 10–15 years, public pension exposure to private credit has exploded.

From:

• A niche allocation embedded in private equity

To:

• A core portfolio pillar

The growth is staggering:

Roughly 5x–10x increase in exposure—direct and indirect

And it accelerated in the post-2010 era of:

• Low interest rates
• Yield chasing
• “Alternative income” narratives

But unlike public bonds:

• These investments are often no-bid
• Illiquid
• Valued by models, not markets

---

The Fee Machine Behind It All

Private credit is not just about yield.

It is about fees.

Compared to traditional investment-grade bond management:

• Private credit can carry 5x–10x higher total fees
  • Management fees
  • Origination fees
  • Structuring fees
  • Monitoring fees
  • Hidden spreads (especially in insurance wrappers)

These are not transparent, competitive markets.

They are often:

• Negotiated contracts
• With limited bidding
• And limited disclosure

---

The Political Economy Problem

Here’s where things get uncomfortable.

Since the Citizens United v. FEC decision:

• Political donations—especially at the state level—have become less transparent
• Financial firms have gained greater influence over public policy

At the same time:

• High-fee asset managers benefit disproportionately from:
  • Pension allocations
  • Insurance partnerships
  • Alternative investment mandates

It is not unreasonable to ask:

Do higher-fee managers have stronger incentives—and greater ability—to influence allocation decisions than low-fee managers?

That question has barely been explored.

But it should be.

Because public pensions sit at the intersection of:

• finance
• politics
• opacity

---

Why This Won’t Unwind Quickly

The key players—insurers and pensions—share a common goal:

Delay recognition of losses as long as possible.

That means:

• No forced selling (unlike retail funds)
• Limited observable pricing
• Gradual, smoothed-down valuations

In other words:

This is not a mark-to-market crisis. It is a mark-to-model slow burn.

---

The Real Risk

The danger is not that private credit collapses overnight.

The danger is that:

• Losses accumulate silently
• Risk is mispriced for years
• And when recognition finally comes…
  → it hits the system all at once

Through:

• Insurance balance sheets
• Pension funding gaps
• Reduced retirement security

---

Final Thought

Retail investors may be the first to feel the pain.

But they are not the system.

The system is:

• Life insurers
• Public pensions

And both are structurally incentivized to pretend nothing is wrong.

That is why:

The private credit meltdown won’t be fast, visible, or orderly.

It will be slow.

It will be opaque.

And when it finally surfaces, it will be far larger than anyone currently admits.

———————————————————————————

Retirement Plans Must Demand Downgrade Provisions for Any Annuity

While Washington talks, state legislators are beginning to act.

From Kentucky to California to Illinois and Hawaii, a growing number of lawmakers are doing something Congress has largely avoided: formally demanding full transparency, accountability, and prosecution tied to the Jeffrey Epstein files.

This is not theoretical. These are filed resolutions, recorded votes, and named sponsors—a real, emerging political movement.

---

Kentucky: The First Real Breakthrough

Kentucky has become ground zero for state-level Epstein accountability.

House Resolution 62 (HR 62)

• Primary Sponsor: Rep. Steven Doan
• Co-sponsors (bipartisan):
  • Savannah Maddox
  • Tina Bojanowski (D)
  • Lindsey Burke
  • Adrielle Camuel
  • Beverly Chester-Burton
  • Mark Hart
  • Kimberly Holloway
  • Candy Massaroni
  • Marianne Proctor
  • T.J. Roberts

👉 The resolution:

• Urges the U.S. Attorney General to investigate and prosecute individuals tied to Epstein
• Explicitly recognizes Thomas Massie’s leadership on forcing file disclosure

This is not symbolic language. It is a direct call for federal prosecution.    https://commonsense401kproject.com/2026/04/05/kentucky-epstein-justice/

---

🟨 Illinois: The First State to Actually Pass a Resolution

If Kentucky is the spark, Illinois is the first state to act decisively.

House Resolution 697 (HR 697)

• Primary Sponsor: Rep. Kelly Cassidy
• Co-sponsors (33 legislators):
  • Joyce Mason, Mary Gill, Theresa Mah
  • Nabeela Syed, Sharon Chung
  • Justin Cochran, Margaret Croke
  • Eva Dina Delgado, Katie Stuart
  • Elizabeth Hernandez, Maura Hirschauer
  • Maurice West, Dave Vella
  • Edgar Gonzalez, Gregg Johnson
  • Rick Ryan, Michael Crawford
  • Will Guzzardi, Michelle Mussman
  • Daniel Didech, Jawaharial Williams
  • Jehan Gordon-Booth, Kimberly Du Buclet
  • Janet Yang Rohr, Kambium Buckner
  • Dagmara Avelar, Lindsey LaPointe
    (and others)

What Illinois did that no one else has:

• Passed the resolution unanimously (69–0)
• Called for:
  • Full release of Epstein files
  • Minimal redactions (victim protection only)
  • Appointment of a special prosecutor

👉 The resolution explicitly warns:

• Documents may have been “illegally redacted or withheld”
• Political figures may have been shielded

This is not cautious language.
This is a direct accusation of federal misconduct.

---

🟦 California: Moving—But Slower

California has introduced two separate measures, showing momentum—but hesitation.

SCR 118

• Primary Sponsor: Sen. Lena Gonzalez
• Coauthor: Asm. Josh Lowenthal

AJR 20

• Sponsor: Asm. Jasmeet Bains

👉 These measures:

• Call for release of Epstein-related records
• Condemn withholding and excessive redaction

But unlike Illinois:

• They are still working through the process
• No final passage yet

👉 Translation:

• California is engaged—but not leading

---

🌺 Hawaii: Quiet but Broad Coalition

Hawaii has built one of the largest sponsor blocs in the country.

SCR 191 (and companion resolutions)

Sponsors include:

• Karl Rhoads
• Stanley Chang
• Mike Gabbard
• Carol Fukunaga
• Lorraine Inouye
• Jarrett Keohokalole
• Brandon Elefante
• Joy San Buenaventura

👉 What makes Hawaii unique:

• Large multi-member coalition
• Coordinated House + Senate activity
• Strong alignment with full transparency demands

---

🧭 Other States: Early Signals

Additional states have filed similar measures:

• Pennsylvania (HR 344) – calls for transparency and accountability  Ben Waxman, Benjamin Sanchez, Carol Hill-Evans, Dan Williams, Emily Kinkead, Gina Curry
• Michigan (HR 258) – pushes federal review Betsy Coffia, Carol Glanville, Carrie Rhenigans, Cynthia Neeley, Donavan McKinney, Dylan Wegela, Emily Dievendorf, Erin Byrnes Ds  Jaime Greene R others
• Louisiana (HR 2) – early-session resolution Kyle Green (D)
• Texas (HCR 12) – prior effort (did not advance)  Jessica Gonzalez, Rafael Anchia

👉 These are smaller—but important:

• They show geographic spread
• Not confined to one ideology or region

---

🚨 What This Movement Really Means

1. This is no longer a fringe issue

• Illinois: passed resolution
• Kentucky: bipartisan sponsorship
• Hawaii: multi-member coalition
• California: multiple bills

👉 That’s a national pattern emerging

---

2. The divide is not party—it’s willingness

Across states:

• Democrats dominate in Illinois and California
• Republicans + Democrats align in Kentucky

👉 The real split is:

Who is willing to demand full transparency—and who is not

---

3. State legislatures are stepping in where Congress stalled

Congress passed the Epstein Files Transparency Act

But states are now saying:

• That was not enough
• Files are still:
  • redacted
  • incomplete
  • possibly manipulated

---

🔥 The Bottom Line

A new political front is opening.

Unions are putting pressure on state pensions to divest from Epstein funder Apollo. https://commonsense401kproject.com/2026/03/23/divest-from-apollo-now-before-markets-courts-or-congress-force-it/

“From Kentucky to Illinois to California, state legislators are beginning to do what federal leadership has failed to do: demand full, unredacted accountability for the Epstein network.”

And for the first time:

• The names are public
• The votes are recorded
• The pressure is building

Of the entire KY Congressional Delegation only Thomas Massie signed the Massie-Khanna Discharge Petition.   Lone Democrat Morgan McGarvey , and remaining Republicans Barr, Comer, Guthrie, Rogers, did NOT sign the Massie–Khanna discharge petition.  There were 4 brave Republicans including Massie and only 4 pathetic Democrats which included Morgan McGarvey from Louisville. 

The Kentucky General Assembly is in session for 2026 and Kentucky House Resolution 62 urges the DOJ to investigate and prosecute crimes revealed in Epstein Files and credits Thomas Massie for Leadership and Disclosure.  The primary sponsor is Steve Doan, Republican of Northern Kentucky.  Co-Sponsors Republicans: Savannah Maddox, Josh Calloway, Mark Hart, Kimberly Holloway, Candy Massaroni, Marianne Proctor, T.J. Roberts   Republicans: Savannah Maddox, Josh Calloway, Mark Hart, Kimberly Holloway, Candy Massaroni, Marianne Proctor, T.J. Roberts Democrats: Tina Bojanowski, Lindsey Burke, Adrielle Camuel, Beverly Chester-Burton, Anne Donworth.   The Senate has an nearly identical Senate Resolution 95 and is sponsored by 5 Republicans – Lindsey Tichenor,  Aaron Reed, Shelly Frommeyer, Steve Rawlings. and Gex Williams.    If you know any of these co-sponsors thank them contact your representatives.   However, Senate and House leadership in Kentucky seems to be controlled by the Epstein Class and the bills are stalled in committee.

Tuesday, May 19, 2026, primary day.   Thomas Massie is plainly the strongest Kentucky and US federal candidate running on full Epstein-file release and deeper transparency. He introduced the bipartisan Epstein Files Transparency Act, later used a discharge petition to force the issue, and has continued publicly pressing for fuller disclosure and naming powerful figures he says deserve scrutiny.    Epstein class donors are spending $6 -$10 million at least in Dark Money to defeat him in the Republican Primary.

Ed Gallrein anti-Massie proEpstein candidate outside donors including Miriam Adelson, Paul Singer, and John Paulson.  Gallrein is the Trump-backed challenger in a race driven primarily by Massie’s Israel positions and his Epstein-file push.  Paulson is named in the Epstein Files.

For the U.S. Senate Republican primary, the official field widely reported includes Andy Barr, Daniel Cameron, Nate Morris.  While Barr has publicly supported release of the Epstein files in Congress, I found much stronger evidence of him as an AIPAC-/Israel-lobby-aligned candidate than as a transparency leader on Epstein. Independent trackers that compile FEC/OpenSecrets data list Barr among Kentucky members backed by pro-Israel interest groups, and Barr also publicly endorsed Massie’s anti-Massie challenger Ed Gallrein. https://commonsense401kproject.com/2025/07/22/many-congress-get-donations-from-firms-linked-to-jeffrey-epstein-ky-congressman-andy-barr-example/ Barr clearly needs to be opposed.

In the U.S. Senate Democratic primary, Charles Booker is the clearest pro-transparency fit. I found multiple recent Booker posts explicitly demanding release of the files, praising survivors, attacking the “Epstein class,” and calling for accountability. I also found a direct Booker post praising Thomas Massie and Ro Khanna working together.  

On sitting US. Representative  James Comer, the picture is mixed. Comer, as House Oversight chair, did move some Epstein-related oversight steps, including subpoenaing records from the Epstein estate and later pushing actions involving DOJ officials. But Kentucky and national coverage also framed him as an alternative to Massie’s more aggressive full-release push, and recent reporting says members still want him to enforce subpoenas more aggressively after Bondi’s ouster. If someone is in Comer’s district they should urge him to full transparency.

Of Kentucky’s 3 largest daily newspapers, I would classify 2 as pro-Epstein and 1 as Epstein Class related.  Both the Louisville Courier and Northern Kentucky (Cincinnati) Enquirer are owned by Gannett USA Today, which is controlled by Apollo, whose CEO and founder Leon Black was Jeffrey Epstein’s main funder post 2008.  The Lexington Leader was purchased by a hedge fund but I have found no direct Epstein ties yet.    Apollo controls Cox Media properties in Paducah KBSI and WDKA.    Apollo via Lumen Technologies and Brightspeed controls a lot of the rural broadband and telephone infrastructure.

The Kentucky Pensions have less Apollo exposure than most other states.  Kentucky Teachers owns moderate amounts of Apollo common stock and their REIT.   Kentucky Public Pensions however has hired Apollo-controlled Wilshire as its so-called independent consultant.   Both pensions should divest from their Apollo holdings due to its ties to Jeffrey Epstein. https://commonsense401kproject.com/2026/03/23/divest-from-apollo-now-before-markets-courts-or-congress-force-it/ Apollo portfolio company Makers Pride in London KY has been accused of illegal labor practices.

The Department of Labor is selling its new fiduciary rule as protection.

Protection from lawsuits.
Protection through process.
Protection via a checklist.

But strip away the language, and the reality is far more troubling:

👉 This rule is not about reducing litigation.
👉 It is about unlocking new revenue streams for Wall Street and the insurance industry—while leaving plan sponsors holding the liability.

---

The Bait: “Follow the Checklist, Reduce Your Risk”

The DOL’s message is simple:

If fiduciaries evaluate:

• fees
• performance
• liquidity
• complexity
• valuation

…then they will be protected.

But even under the rule itself, that protection is weak:

• It is not a true safe harbor
• It is only a rebuttable presumption
• Plaintiffs can still challenge the outcome

So what the DOL is really offering is not protection—it is procedural cover.

---

The Switch: Open the Door to High-Fee, Opaque Products

While promising protection, the rule simultaneously:

• Encourages alternative investments in 401(k)s
• Channels those investments into state-regulated CITs
• Facilitates inclusion of annuities and insurance products

These are not low-cost index funds.

These are:

• Private equity
• Private credit
• Insurance-wrapped products
• Spread-based annuities

👉 In other words: the highest-margin products in the entire financial system.

---

Why Wall Street and Insurers Win Immediately

This rule creates an immediate economic shift:

💰 More complexity = more fees

• Private markets → higher management fees
• CITs → less fee transparency
• Annuities → hidden spreads (often 100–300+ bps)

💰 Less transparency = less pricing pressure

• No SEC disclosure regime
• No daily pricing discipline
• No meaningful benchmarking

💰 Faster revenue recognition

• Fees and spreads are earned today
• Risks are borne later

---

Translation:

👉 Wall Street and insurers get paid now
👉 Participants take the risk later
👉 Plan sponsors absorb the liability when things go wrong

---

CITs: The Perfect Revenue Vehicle (and Litigation Time Bomb)

The rule effectively pushes plans into Collective Investment Trusts (CITs).

Why?

Because CITs allow:

• Mixing of public and private assets
• Limited disclosure
• State-level oversight instead of SEC regulation

And here’s what most fiduciaries—and participants—don’t realize:

👉 Many CITs are regulated at the state level (PA, NH, MD, etc.)
👉 That fact is often buried in fine print
👉 Underlying holdings are frequently undisclosed or poorly understood

Wall Street Journal Exposes Target Date CIT Corruption — Opens up Fiduciary Litigation

---

That’s Not Just a Disclosure Problem—It’s a Legal Problem

Because once litigation begins, everything changes.

Discovery will ask:

• What regulator governs this CIT?
• What assets are inside it?
• Are any affiliates involved?
• How are values determined?
• What compensation is embedded?

And under Cunningham v. Cornell:

👉 If a party in interest is involved, the burden shifts

---

One Hidden Conflict Can Blow Up the Entire Structure

This is where the DOL’s rule becomes dangerous.

Inside these CIT-based target date funds, you may find:

• Affiliated private credit funds
• Insurance general account exposure
• Revenue-sharing arrangements
• Spread-based annuities

If any one of those components is found to be a prohibited transaction:

👉 The entire structure becomes subject to challenge
👉 Damages can follow
👉 Fiduciaries—not providers—are on the hook   https://commonsense401kproject.com/2026/04/03/dol-401k-fiduciary-rule-enables-accounting-fraud/

---

The Real Risk Shift: From Providers to Plan Sponsors

Wall Street and insurers are insulated:

• They design the products
• They control the disclosures
• They collect the fees

But they are not fiduciaries.

Plan sponsors are.

So when things go wrong:

👉 It is not the product manufacturer that gets sued
👉 It is the plan committee

---

---

Morningstar Already Admits the Questions Aren’t Answered

Even industry observers acknowledge:

• Valuation concerns
• Fee opacity
• Liquidity risks
• Structural complexity

These are not technical issues.

These are the exact elements plaintiffs’ attorneys litigate.  https://www.morningstar.com/alternative-investments/private-investments-401ks-we-still-have-questions

---

Bottom Line

The DOL claims this rule protects fiduciaries.

But the real structure is clear:

Wall Street and insurers:

• Gain new access to 401(k) assets
• Increase fees and spreads
• Face limited transparency requirements

Participants:

• Bear higher costs
• Take on opaque risks
• Lose visibility into their investments

Plan sponsors:

• Assume fiduciary responsibility
• Face increased litigation exposure
• Rely on a “checklist defense” that will not hold up

---

This rule isn’t a shield.

It’s a handoff:

👉 Profits go to Wall Street and insurance companies
👉 Risk goes to participants
👉 Liability stays with plan sponsors

And when the lawsuits come—as they will—

the checklist won’t save anyone.