Thanks to the many Fossil Free California supporters who joined CalPERS’ tobacco debate (along with a host of public health and anti-smoking organizations), the Board voted on Monday divest from the $557 million in tobacco stocks we all THOUGHT they had dumped in the early 2000s, when they first decided to divest. This was the outcome we wanted!
It was a fascinating and often unintentionally comical debate. Wilshire Associates (consultant who also works for Big Tobacco, but never mind) presented a highly unscientific “survey” of other funds, which showed that most divesting institutions don’t review past divestment decisions to see if they’ve lost money—as making money is not the goal of divesting. Not clear how that was helpful to staff’s case.
Then tobacco’s nemesis Prof. Stanton Glantz drew a direct line between health effects of smoking and the financial precariousness of the industry, in spite of record high stock prices. Union members, public health advocates and representatives of the American Cancer Society and the American Lung Association all im plored the Board not to invest our money in an industry that profits from killing people. No public commenters spoke in favor of re-investment, although that was staff’s strong recommendation.
Controller Betty Yee (in the photo above) moved to extend divestment to all holdings, and other Board members fell all over themselves thanking staff for their diligence…and finally, the majority voted with Yee. Two of the three who voted no were in favor of remaining partially divested: J.J. Jelincic declared that CalPERS divesting was never going to convince anyone to stop smoking; and Dana Hollinger made a case for maximum fund diversity (staff’s strongest point). Bill Slaton took the view that money is just money and staff knows best; he alone was ready to vote to reinvest in tobacco. (Note that both Hollinger and Slaton are the Governor’s appointees to the Board.) Three members who did not speak voted with the majority, which was a great relief!
And so it was done.
Next stop, staff’s proposal to revise the fund’s divestment policy, in “early 2017.” Watch this space!