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California Attorney General calls out CalPERS on Iran investments

February 8, 2010 - 12:53 pm

California Attorney General Edmund Brown Jr. today sent letters  to the state pension funds calling for divestment from Iran.  The move comes less than a week after San Diego CityBeat published its investigation into investments made by the California Public Employees’ Retirement System in companies conducting business in Iran and Sudan in defiance of state law.

CalPERS must “honor the state law requiring them to divest from companies doing business in Iran,” Brown said in a press release. “It’s time for our public pension funds to show some leadership and stop supporting companies that do business with a tyrannical regime.”

As CityBeat reported on Wednesday, CalPERS passed a policy in February 2009 prohibiting divestment, despite two laws passed by the legislature that ordered CalPERS to liquidate its investments in companies supporting the regimes of Sudan and Iran on humanitarian and national-security grounds.

At least one corporation, Sinopec Corp, is prohibited by both laws.

CityBeat also found  CalPERS’ report to the legislature was incomplete and inaccurate, including omission of the February policy.  In a letter sent today to CalPERS, Brown makes the same point:

…Although CalPERS has filed annual reports, these reports lack enough detail to enable the public and CalPERS members to know whether CalPERS is complying with the Iran Act. On page 3 of its most recent report, CalPERS declares that it decided “to not divest shares . . . as specified in the Iran Act.” Apparently, this decision was based on a conclusion made by the Board almost a year ago that divestment would violate CalPERS’ fiduciary duty to its members. But the report utterly fails to explain how and why this is the case.

Brown concludes that the report disregards the disclosures and analysis required under state law.

…The report merely lists 24 CalPERS holdings that do business in Iran (up four from the last report) and states-without analysis or elaboration-that “substantial progress has been made through the engagement process, in the curtailment and cessation of business operations in Iran.” Nothing in these general comments complies with the Iran Act’s requirements for CalPERS to explain whether it has reduced its investments in these companies, to describe when it anticipates fully divesting in these companies (or to explain the reasons for not divesting), to summarize investments transferred to funds that exclude these companies, or to calculate divestment costs or losses.

Brown has asked CalPERS to respond “as soon as possible.” A similar letter was sent to the California State Teachers’ Retirement System.

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2 Comments leave one →
  1. strelnikov2 permalink
    February 9, 2010 - 11:39 pm 11:39 pm

    I don’t know why they don’t ban CalPERS investments with Israel; it has nuclear weapons and a long record of human rights violations – oh, yeah, we sell them guns!

    • February 9, 2010 - 11:53 pm 11:53 pm

      Read the linked story. That’s exactly what someone is proposing. He’s collecting signatures now. Email me (davem@sdcitybeat.com) and I’ll send you his contacts.

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