Pension fund CalPERS has used its administrative powers to suspend the pension accounts of city officials, one of whom allegedly earned a 'secret' annual salary of US$800,000.
Last week, Attorney General Edmund Brown subpoenaed hundreds of employment, salary, and contract records in the city in California called Bell. The city's top officials were also subpoenaed.
These are part of an investigation to determine whether civil or criminal action should be taken against city leaders whose secretive salaries in one case rose to almost US$800,000 a year.
"We have joined the Attorney General's office to investigate all the facts and circumstances surrounding payment of salaries and other compensation to officials at the City of Bell," noted the $200 billion-plus California Public Employees' Retirement System in a press statement.
"Until the investigation is concluded, CalPERS will place on administrative hold the accounts of individuals whose compensation are under the investigation and will not approve any pensions related to this matter, until it is satisfied that the pensions are appropriately paid under the law."
"These outrageous pay practices are an insult to the hard-working people of Bell and have provoked righteous indignation in California and even across the country," Brown said in a press statement.
Brown is looking at "all possible violations of law" by Bell officials, including civil and criminal sections.
The probe followed a Los Angeles Times article revealing the US$787,637 salary of Bell City manager, Robert Rizzo.
The Bell police chief was also found to make 50 per cent more than the police chief of Los Angeles.
According to the press statement, the probe will examine whether any illegality, self-dealing or other "improper activity" occurred in Bell, and whether any changes in California law are necessary to prevent similar abuses in the future.