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The U-T uses factual errors to show support for CalPERS’ Iran investments

February 17, 2010 - 11:33 am

The Union-Tribune editorial board is a supporter of two bad governments: CalPERS and the Islamic Republic of Iran.

In an opinion piece in today’s paper titled “Politics at its most pathetic,” the U-T slams Attorney General Jerry Brown, Insurance Commissioner Steve Poizner and Assembly member Joel Anderson for fighting the California Public Employees’ Retirement System over its prohibited investments in certain companies conducting business in Iran.

But, the authors of the editorial used factually inaccurate information and unsubstantiated statements to argue for a position that ultimately makes Iran—a state supporter of terrorism, a violator of human-rights and a nuclear threat—more prosperous.

Let’s go through some of the editorial’s assertions:

This is unadulterated folly. Among the many respected international firms whose affiliates do business with Iran are Royal Dutch Shell, Siemens AG, Hyundai and Alcatel. Their operations are perfectly legal under U.S. and international law. Their decision to do business with Iran has not raised red flags with the vast majority of the world’s investment analysts or with the great majority of nations around the planet…

First of all, the “world’s investment analysts” aren’t concerned with terrorism or human rights until it hurts their returns. That’s the point of divestment legislation: To uncover “red flags,” to make them bad investments and broadcast them to the investment community. Also, both the Senate and the House have passed legislation to ban investment in certain companies operating in Iran.

More to the point of factual inaccuracy:

Of the four companies the editorial cites, only one company is covered by the legislation: Royal Dutch Shell, because it is engaged in energy-related operations. But to suggest that its operations have not raised red flags is completely false. Start simply with the Wikipedia section devoted to Shell’s Iran operations: Not only has the company clearly come under pressure from the U.S. and other nations, it also “caved” to pressure in 2008 due to U.S. sanctions and pulled out of a $10-billion oil project. Further, bipartisan members Congress have sought to make Shell’s operations illegal. This undermines the editorial’s unsubstantiated statement that CalPERS’ holdings were “hardly significant enough to have any effect on Iran.”

Siemens and Hyundai are irrelevant to the Divest from Iran Act, according to the private firm CalPERS hired to review its investments. The law only covers companies involved in the energy industry or companies that have been linked to terrorist organization. They should not have been included in the editorial—except for maybe Alcatel/Lucent. (To say their operations are “perfectly legal” is also disingenuous; as CEO Patricia Russo admitted in 2006, she is “forbidden by law from being involved in business in Iran.”)

Alcatel is a prohibited investment under another bill aimed at cutting investment in companies that support the allegedly genocidal Sudanese government. That brings us to another giant factual error in the editorial:

And if we believe that the state government should deter investments in nations that are at a geopolitical risk, why would Iran be the only nation on the list? Why not Venezuela, Colombia, the Ukraine, Greece?

As I just mentioned, Iran is not the only nation on the “list.” The 2007 Iran divestment law was modeled after a 2006 law that barred investments with Sudan. The editorial does not mention Sudan at all.

Further, CalPERS monitors companies working in Northern Ireland and has, indeed, previously barred investments in Venezuela.

It’s as if the editorial’s authors didn’t read the law or even Google for research. Did they even read CalPERS’ reports (Iran, Sudan) to the legislature, the true focus of Brown’s attack? That’s probably the worst thing about the editorial: It glosses over CalPERS’ behavior, describing it simply as “alleged noncompliance.”

As CityBeat reported in an investigation published two weeks ago and a follow-up today, CalPERS’ reports were incomplete, misleading and included major inaccuracies. The reports did not disclose that CalPERS passed a policy stating it was going to ignore legislative divestment initiatives. The reports did not contain documentation of CalPERS’ progress to get each individual corporation to change its practices in Sudan and Iran, nor did CalPERS include an estimate of how much it would cost to sell off shares in these companies—both requirements under the state law. Further, CalPERS now acknowledges it will have to file a new report with the Legislature because it screwed up an estimate of its holding in a company called China Petroleum & Chemical Corp.

“The concern is that they’re not doing their job and just saying whatever gets them by that day,” Anderson, who has pushed for a Feb. 24 legislative hearing on the matter, says in this week’s story. “We’ve had so many different accounts, whether it was in memos or newsletters. I just want to get to the truth and make sure they’re following the law.”

It’s valid for the U-T to disagree with divestment policy; but that was an argument for 2007 when the legislation was proposed. It’s absolutely irresponsible for the editorial board to suggest that it’s OK for a government entity to shrug off the law and essentially lie to the Legislature. To further tell Brown to let CalPERS get away with breaking the law is deplorable: The Attorney General is doing the job he was elected to do.

Go ahead, U-T, support terrorism, human-rights violations and a nuclear threat to national security. After all, profit is profit. But, c’mon: Government negligence shouldn’t be acceptable, even if it agrees with your philosophical position.

This post has had a few more points added since originally published. For the record, here is the complete list of CalPERS’ holdings, with recently released quantities of stock.

A B C
1 Iran Company Listings
2 10 Companies No Longer Identified by Risk Metrics Group as being prohibited investments pursuant to the Iran Act
3 Company Name Shares (as of 10/30/09)
4 1 Alstom 903,605
5 2 Danieli & Co. Officine Meccaniche SPA 165,386
6 3 Finmeccanica SPA 1,602,755
7 4 Hyundai Engineering & Construction Co Ltd 237,560
8 5 Itochu Corp. 4,416,000
9 6 Petroleo Brasileiro 533,182
10 7 Samsung Engineering Co. Ltd. 116,375
11 8 Snc-Lavalin Group Inc. 472,246
12 9 Sojitz Corporation (formerly Sojitz Holdings Corp) 4,182,800
13 10 Total SA 7,247,368
14 3 Companies Under Review – Newly Identified
15 Company Name Shares (as of 10/30/09)
16 1 Aker Solutions ASA (Formerly Aker Kvaener) 726,440
17 2 CNPC Hong Kong Ltd. 6,936,000
18 3 ENI Spa 13,315,234
19 20 Companies Currently Being Monitored Via Engagement
20 Company Name Shares (as of 10/30/09)
21 1 CNOOC LTD 57,446,950
22 2 Daelim Industrial Co. 103,669
23 3 Gazprom OAO 1,572,785
24 4 GS Engineering & Construction Ltd. 108,674
25 5 GS Holdings Corp. 205,319
26 6 Indian Oil Corporation Ltd 320,466
27 7 Inpex Holdings Inc. 2,185
28 8 JGC Corp. 510,950
29 9 L’Air Liquide 707,465
30 10 Man AG 418,512
31 11 Mitsui & Co. 5,006,284
32 12 Mitsui Engineering & Shipbuilding Co. Ltd. 1,840,000
33 13 Royal Dutch Shell PLC 129,495
34 14 Saipem 966,579
35 15 Sasol Ltd. 761,750
36 16 Sinopec Kantons Holdings Ltd 962,754
37 17 StatoilHydro ASA (formerly Statoil ASA) 4,629,507
38 18 Technip 349,591
39 19 The Weir Group plc 677,930
40 20 Wartsila Oyj (Formerly Metra Oy) 271,141
41 8 Companies Not Held By CalPERS
42 Company Name Shares (as of 10/30/09)
43 1 Compania Espanola de Petroleos (CEPSA) 0
44 2 E.ON AG (formerly Veba Ag) 0
45 3 MISC Berhad 0
46 4 Petronas Dagangan Bhd 0
47 5 Petronas Gas Bhd 0
48 6 Tatneft OAO 0
49 7 WS Atkins PLC 0
50 8 China Petroleum & Chemical Corporation 0
51 1 Comments are provided by Risk Metrics Group.
52
A B C
1 Iran Company Listings
2 10 Companies No Longer Identified by Risk Metrics Group as being prohibited investments pursuant to the Iran Act
3 Company Name Shares (as of 10/30/09)
4 1 Alstom 903,605
5 2 Danieli & Co. Officine Meccaniche SPA 165,386
6 3 Finmeccanica SPA 1,602,755
7 4 Hyundai Engineering & Construction Co Ltd 237,560
8 5 Itochu Corp. 4,416,000
9 6 Petroleo Brasileiro 533,182
10 7 Samsung Engineering Co. Ltd. 116,375
11 8 Snc-Lavalin Group Inc. 472,246
12 9 Sojitz Corporation (formerly Sojitz Holdings Corp) 4,182,800
13 10 Total SA 7,247,368
14 3 Companies Under Review – Newly Identified
15 Company Name Shares (as of 10/30/09)
16 1 Aker Solutions ASA (Formerly Aker Kvaener) 726,440
17 2 CNPC Hong Kong Ltd. 6,936,000
18 3 ENI Spa 13,315,234
19 20 Companies Currently Being Monitored Via Engagement
20 Company Name Shares (as of 10/30/09)
21 1 CNOOC LTD 57,446,950
22 2 Daelim Industrial Co. 103,669
23 3 Gazprom OAO 1,572,785
24 4 GS Engineering & Construction Ltd. 108,674
25 5 GS Holdings Corp. 205,319
26 6 Indian Oil Corporation Ltd 320,466
27 7 Inpex Holdings Inc. 2,185
28 8 JGC Corp. 510,950
29 9 L’Air Liquide 707,465
30 10 Man AG 418,512
31 11 Mitsui & Co. 5,006,284
32 12 Mitsui Engineering & Shipbuilding Co. Ltd. 1,840,000
33 13 Royal Dutch Shell PLC 129,495
34 14 Saipem 966,579
35 15 Sasol Ltd. 761,750
36 16 Sinopec Kantons Holdings Ltd 962,754
37 17 StatoilHydro ASA (formerly Statoil ASA) 4,629,507
38 18 Technip 349,591
39 19 The Weir Group plc 677,930
40 20 Wartsila Oyj (Formerly Metra Oy) 271,141
41 8 Companies Not Held By CalPERS
42 Company Name Shares (as of 10/30/09)
43 1 Compania Espanola de Petroleos (CEPSA) 0
44 2 E.ON AG (formerly Veba Ag) 0
45 3 MISC Berhad 0
46 4 Petronas Dagangan Bhd 0
47 5 Petronas Gas Bhd 0
48 6 Tatneft OAO 0
49 7 WS Atkins PLC 0
50 8 China Petroleum & Chemical Corporation 0
51 1 Comments are provided by Risk Metrics Group.
52
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5 Comments leave one →
  1. sdutsocialmedia permalink
    February 17, 2010 - 11:54 am 11:54 am

    Dave,

    The San Diego Union-Tribune most certainly DOES NOT support terrorism, human-rights violations or any threats to national security.

    You told us about these errors before you published this blog post, but you did not provide us any information about what you claim are errors until after this post was published. You allowed us no time or any chance to respond to your outrageous allegations, even though I asked you about it.

    Now that I have this information, I will alert our editors and we’ll investigate.

    Best,

    Rob Hopwood
    Social Media Specialist
    The San Diego Union-Tribune and SignOnSanDiego.com

    • February 17, 2010 - 12:01 pm 12:01 pm

      The SDUT argues for maintaining investments in Iran, despite a law that bans companies involved in Iran’s energy activities and who are linked to Iranian terrorist organizations. Such a position supports using public dollars to help forward Iran’s nuclear ambitions, government abuse of citizens, and terrorism funding. This has been articulated by Congress, the United Nations and several other organizations.

      The only thing outrageous is the U-T’s position.

      As for telling you about the blog post, I tweeted that I would be exposing these errors in a blog post.

      • February 17, 2010 - 12:30 pm 12:30 pm

        Dave–

        I agree with Rob. Shame on you. You should’ve tipped your hand and told them everything about what you were planning to publish and done their fact-checking for them before you posted this.

        You do owe the Union Tribune the responsibility of not embarrassing them publicly for doing shoddy work. Rob’s right to blame you for their failures.

    • February 17, 2010 - 12:28 pm 12:28 pm

      Rob–

      I thought you said you weren’t a UT spokesman?

  2. February 17, 2010 - 5:08 pm 5:08 pm

    Seth Hettena has another take on the editorial: http://bit.ly/aAz7g2

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