An investment scandal that’s been plaguing New Mexico heated up last week when the state’s former investment adviser pleaded guilty to securities fraud in New York, admitting that he recommended deals that were not in the best interest of the state because they were pushed by politically connected individuals here. Now, it appears similar pay-to-play allegations are swirling around the nation’s largest pension fund – CalPERS (California Public Employees’ Retirement System). CalPERS announced late Wednesday that it was “investigating fees paid to an outside manager that directed the fund’s investments,” The Associated Press reported today. According to the story, CalPERS is reviewing payments of $50 million over a five-year period to Arvco Financial Ventures, which is headed by former CalPERS board member Al Villalobos.

A federal judge in San Francisco has refused to throw out a challenge to California’s Proposition 8, The San Francisco Chronicle reports. California voters passed Prop 8 last November, effectively overturning a ruling by California’s top court that gays and lesbians had a constitutional right to wed. Opponents immediately challenged the law in federal court. The judge’s refusal Wednesday to throw out the challenge to Prop 8 isn’t the last word on the issue. Backers of the proposition are likely to appeal that ruling.

I’ve written several times over the past week or more about the seeming scandal engulfing Texas Gov. Rick Perry regarding his role in the execution of Cameron Todd Willingham in 2004. Perry gave his most spirited defense of his decision not to stop Willingham’s execution Wednesday, the Dallas Morning News reports.

Calling Willingham “a monster,” Perry said he harbors no doubt that the unemployed mechanic purposefully set fire to his Corsicana home in 1991 and killed his three children.

A Texas state commission was looking into reports by seven independent fire experts who all found that no credible evidence of arson existed at the Willingham house. Two days before the commission was to hear from its own hired independent expert earlier this month, Perry replaced his four appointees, including the chairman, and the meeting was postponed, Christy Hoppe of the Morning News writes.

O.K., now the New York Times says it’s not going to sell the Boston Globe. Talk about an about face. The last few months have been hell for New England’s largest newspaper. The Times, which bought the Globe in 1993 for $1.1 billion, threatened to close the Globe earlier this year. That announcement led to a torturous negotiations with employee unions, which in the end took pay cuts and reduced benefit packages. Then the Times announced it was selling the storied newspaper, the winner of nearly 20 Pulitzer Prizes over the past 45 years. The ups and downs of the Globe’s fate were so dramatic over the past year that it all seemed surreal. Now, less than a week before bids are due, the Times in a twist takes the Globe off the market.  I mean, wow!

USAToday can no longer claim to have the country’s largest newspaper circulation apparently. The Wall Street Journal, the perennial No. 2 in circulation, apparently has kicked USAToday off the throne, reports Editor & Publisher.

What will investigative journalism look like in the Internet era? Here’s an interesting take from Paul Steiger, editor-in-chief of ProPublica. If you don’t know ProPublica, find out. The non-profit is testing out a relatively new approach to “accountability” journalism, and has had a pretty successful run in its short life. By the way, you’ll occasionally see ProPublica stories on our site. That’s because they offer their stories free to other media outlets. (And we’re cheap.)

McSweeney’s Quarterly Concern, that quirky, creative literary journal in San Francisco started by Dave Eggers a few years back, is going retro. Yep, its next installment will be in the form of  … wait for it … a newspaper. That’s the news from the New York Times’ Arts Beat.  McSweeney’s quarterly installments are known for experimenting with content and packaging. And its editors believe the American newspaper has a lot of life left in it, despite the doomsday predictions. Times reporter Bruce Webber quoted McSweeney’s managing editor, Jordan Bass, as saying, next month’s installment is either a newspaper inspired by a literary quarterly, “or a literary quarterly inspired by a newspaper. One or the other.”

A few days back I posted a link to a story that reported that conservative talk radio host Rush Limbaugh was part of a team of investors interested in purchasing the St. Louis Rams. Well, that group of investors has dropped Limbaugh from the effort, the Associated Press reports.  “Limbaugh was to be a limited partner in a bid led by St. Louis Blues chairman Dave Checketts, but Checketts said in a statement Wednesday that Limbaugh’s participation had complicated the effort. The group will move forward without him,” the story said.