Why don’t pension funds divest from ALL arms companies?

by CalWatchdog Staff | January 30, 2013 8:16 am

[1]Jan. 30, 2013

By John Seiler

After the December shootings at Newtown, Conn., California Treasurer Bill Lockyer and others took aim at some arms manufacturers.

Lockyer “said he’ll propose that the state’s public pension funds, the two largest in the U.S., sell off investments in firearm manufacturers that make guns prohibited under state law,” reported Bloomberg[2]. “The California State Teachers’ Retirement System, known as Calstrs, with $155 billion of assets, has a stake in Cerberus Capital Management LP, a private equity firm that owns Freedom Group, the maker of the Bushmaster .223-caliber semiautomatic rifle that police said was the primary weapon in the Dec. 14 shootings that killed 20 elementary school children in Newtown, Connecticut[3].”

Under pressure, Cerberus said it would sell Freedom Group.[4]

But why should CalPERS and CalSTRS stop with pressuring Cerberus? A lot of other companies make weapons that potentially could kill thousands more people than those killed in isolated U.S. domestic killing sprees.

Here’s a list of world’s top 100 arms manufacturers[5], the investments of the California Public Employees’ Retirement System[6] and the California State Teachers’ Retirement System[7].

I looked up some matches. The rankings below for the arms companies are for the size of their worldwide arms sales in 2010. And the numbers invested by the pension firms are holdings for CalPERS in 2010 and CalSTRS for 2011. Companies are U.S.-based, unless otherwise noted.

1. Lockheed Martin. CalPERS: $7 million in bonds and $73.3 million in equities. CalSTRS: $70.8 in equities.

2. BAE Systems (United Kingdom). CalPERS: $61.3 million in equities.

3. Boeing. CalPERS: $40 million in bonds, $155.2 million in equities. CalSTRS: $170 million in equities.

4. General Dynamics. CalPERS: $73.6 million in equities. CalSTRS: $87.7 million in equities.

5. Raytheon. CalPERS: $5.2 million in bonds, $49.3 million in equities.

6. (No. 6 on the list is BAE’s American branch.)

7. EADS (Trans-European). CalPERS: $30.9 million in equities.

8. Finmeccanica (Italy). CalPERS: $15.3 million in equities.

9. L-3 Communications. CalPERS: $4 million in bonds, $43.3 million in equities. CalSTRS: $23 million in equities.

10. United Technologies. CalPERS: $244.9 million in equities. CalSTRS: $215.1 million.

Merchants of death

So, will Bill Lockyer and the others who hate guns demand that CalPERS and CalSTRS divest their holdings in these merchants of death?

After all, these arms companies send their killing machines abroad to such murderous dictatorships as Saudi Arabia, which in 2011 bought $29.4 billion in F-15s from Boeing[8].

Or how about unstable Egypt? It wants to buy $3.2 billion more F-16s from Lockheed-Martin[9]. (One of Egypt’s current F-16s is pictured above.)

In the Newtown killings, 20 children were killed. But what happens if these F-15s and F-16s in a couple of years kill thousands of children in Israel? How will Lockyer and the CalPERS and CalSTRS retirees feel?

Source URL: https://calwatchdog.com/2013/01/30/why-dont-pension-funds-divest-from-all-arms-companies/

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