Executive Summary
Redactions are often justified as protecting “trade secrets,” “privacy,” or “ongoing investigations.” In practice, across public pensions, private-equity contracts, and the Epstein files, redactions serve a different function: concealing power, conflicts, leverage, and legal exposure.
The same institutional logic governs all three domains:
Redactions are not about secrecy for safety — they are about secrecy for control.
Public pension systems like CalPERS, OPERS, and Kentucky Retirement Systems, private-equity limited partnership agreements, and the Epstein financial files all exhibit the same pattern:
- Lawful access exists
- Disclosure is nominally promised
- Key economic and governance provisions are systematically hidden
- The hidden provisions implicate fiduciary breaches, political influence, or criminal exposure
This is not accidental. It reflects a shared ecosystem of elite finance, legal privilege, and political insulation.
I. Redactions in Public Pensions: Not Trade Secrets, but Fiduciary Violations
Public pension plans are governed by fiduciary law, not private-contract law. Their records are presumptively public. Yet, over the last 10–15 years, pension systems increasingly adopted private-equity redaction norms that contradict their statutory obligations.
What is Redacted — and Why It Matters
Your Essex Woodlands comparison (Kentucky unredacted vs. Ohio redacted) shows that redactions systematically hide:
- Hidden leverage
- 110% investment authority
- Subscription-based leverage
- Short-term borrowing authority
- Excessive and opaque fees
- Management fees disguised as quarterly percentages
- Organizational expense caps vastly exceeding actual costs
- Special GP distributions and expense reimbursements
- Fiduciary breaches embedded in contract design
- Heads-I-win / tails-you-lose allocation of risk
- GP discretion over valuation, timing, and distributions
- Weak or illusory clawbacks
- Offshore custody and jurisdictional opacity
- Non-US domiciles
- Offshore SPVs and holding structures
- Advisory committee composition
- Names redacted because they reveal conflicts, inducements, or political access
These are not trade secrets. They are terms governing public money, and in many states they likely violate fiduciary statutes outright.
Your Ohio and Kentucky statutory analysis is crucial:
- Many state fiduciary codes do not even list limited partnerships as permissible investments
- Custody, diversification, leverage, and prudence standards are incompatible with these hidden provisions
Redaction is the mechanism that allows illegal investments to persist without challenge.
II. The Normalization of Redaction Through Private Equity
Private equity did not just benefit from redactions — it institutionalized them.
Historically:
- Public pensions required RFPs, competitive bidding, and disclosures
- Contracts were subject to open-records laws
- Political donations were capped and disclosed
Post-Citizens United:
- PE firms lobbied for RFP carve-outs
- “Trade secret” exemptions were expanded
- Limited partnership agreements became the de facto governing documents
- Consultants and lawyers normalized redaction as “industry standard”
What changed was not the law — it was enforcement culture.
The result:
- Secret, no-bid contracts
- Benchmark engineering
- Consultant-blessed opacity
- Pay-to-play without receipts
Redactions are the operating system of this regime.
III. Epstein Files: The Same Redaction Logic, Different Crime
The Epstein files expose the same structural pathology at a higher criminal level.
What Was Redacted — and Why
In Epstein-related disclosures:
- Names of financiers, lawyers, trustees, and intermediaries were withheld
- Banking relationships were obscured
- Offshore structures were shielded
- Correspondence revealing knowledge (not just participation) was suppressed
The justification again was:
- Privacy
- Ongoing investigations
- Risk of defamation
But as your Epstein article correctly notes, the files reveal:
“Not just pedophiles — but a corrupt offshore financial system.”
The redactions protected:
- Enablers, not victims
- Institutions, not individuals
- Networks, not isolated actors
Just as in public pensions, redaction functioned as a liability firewall.
IV. The Common Denominator: Elite Financial Immunity
Across all three domains — pensions, private equity, Epstein — the same actors recur:
- Global law firms
- Private banks
- Offshore administrators
- Consultants and “independent” advisors
- Politically connected intermediaries
The same techniques recur:
- Jurisdictional fragmentation
- Complexity as camouflage
- Delegation to “experts”
- Legal privilege as a shield
- Redaction as a substitute for accountability
This is why redactions escalate when:
- Performance deteriorates
- Scrutiny increases
- Political stakes rise
Opacity is not incidental — it is defensive architecture.
V. Why This Matters Now: CalPERS and the Next Phase
CalPERS sits at the center of this ecosystem:
- One of the world’s largest private-equity investors
- A key political actor in California
- A template for other pension systems
- A beneficiary of consultant-engineered benchmarks and compensation schemes
The same redaction logic now extends to:
- Executive compensation justification
- Performance benchmarking
- Liquidity risk disclosures
- Political relationships
- Contractual fee structures
As you’ve documented repeatedly, redactions are the glue that holds the system together.
VI. Conclusion: Redactions Are the Scandal
The scandal is not just:
- Private equity underperformance
- Excessive fees
- Epstein’s crimes
- Pension mismanagement
The scandal is the shared refusal to disclose.
Redactions transform:
- Fiduciary violations into “complexity”
- Conflicts of interest into “customary practice”
- Political influence into “coincidence”
- Criminal facilitation into “privacy concerns”
Until redactions are treated as prima facie evidence of risk and misconduct, public institutions will continue to hemorrhage money, trust, and legitimacy.
Sunlight is not a threat to honest systems.
Redactions are a confession by dishonest ones.
The CommonSense 401k Project 