Thread: Gun Makers Take One to the Gut

From Forbes.

1/10/2013 @ 6:45PM |4,792 views

Gun Makers Take One to the Gut

Gun makers have taken a direct hit to the gut. The nation’s second largest pension has said that it would completely liquidate all holdings that involve firearms. In making the landmark move yesterday, the California-based fund said that it is about respecting human rights and minimizing risks to human health.


Rifle action from Ruger Model 77 Mark II Stainless (.204) (Photo credit: Wikipedia)


The California State Teacher’s RetirementSystem’s heroic move is the catalyst in what is expected to become a national — and perhaps international — trend.

Its decision is predicated on a philosophy that the fund declared back in the 1980s — one that had decided to withdraw all investments from the then-racist South African regime. In keeping with that stance, the institutional investor said that the killing of the 20 grade schoolers and six of their teachers is a “tipping point.”

“I think we’ve taken appropriate action, given the unspeakable and tragic loss of life that occurred in Connecticut last month — the latest in an ongoing lime of similar incidents involving assault weapons and mass casualties,” saysCalstrs Investment Committee Chair Harry Keiley. “This latest incident, which occurred at a school and involved our fellow educators and the children we cherish, is a tipping point for Calstrs and speaks to the correctness of our actions. This is not only the right thing to do but positions us to deal with the financial pressures we anticipate this sector of the industry will face.”

The pension has assets totaling $154.3 billion. It says that it has about $8.8 million in private equity in the Freedom Group that makes the type of assault weapon used in the Connecticut massacre.

Meanwhile, it also has $1.1 million in private equity invested in Smith & Wesson and $1.8 million Sturm Ruger. The fund will also divest from those firms that make high-capacity ammunition clips, which are now illegal in California.

The pension’s board members met yesterday, which was accessible via the web. They took up a proposal submitted by the California Treasurer, Bill Lockyer, who requested that Calstrs disinvest from those gun makers whose semi-automatic products are banned from the state.

“Divestment in such firms would comply with Calstrs’ existing investment policy and comport with the board’s fiduciary duty to members and beneficiaries,” writes Lockyer, noting that assault weapons clearly fall into the category of being a product “detrimental to public health and safety.”
And it’s not just California that is moving in this direction. It’s also Connecticut, Pennsylvania and New York.

Consider New York: Its public pension fund holds $150 billion in assets and $15 million of that is invested in gun manufacturers. Meantime, the teacher’s fund there has about $38 billion in assets of which $7 million is invested in gun makers.

New York’s Comptroller Thomas DiNapoli said during a radio interview with WCNY that his office is actively investigating the possibility of withdrawing all monies from gun makers. But he says that he and his managers will examine the products that those companies market. All decisions, he adds, will be based on his fiduciary obligations to plan participants.

“We are not going to be reactionary,” DiNapoli told the radio station. “When we manage pension fund dollars, it is not with a political judgment. You have to tie it back to shareholder value.”

After the mass killings in Connecticut, the National Rifle Association released a statement saying that it would be accommodating in subsequent talks regarding future safeguards. But only days later, its chief executive, Wayne Lapierre, appeared before cameras as defiant as ever. He was then roundly denounced for his insensitivity and his belligerence.

The NRA gets most of its funding from gun manufacturers, which are pushing the political agenda — desiring to sell increasing amounts of weapons. LaPierre, who avoided service during Vietnam despite a reported low draft number and who has referred to federal law enforcement as “jack-booted thugs,” is paid about $1 million a year by his clients. Interestingly, NRA’s President David Keene’s son has been imprisoned for firing his gun during a road rage incident outside Washington, D.C.

The public mood has dramatically shifted and now favors sensible gun controls: a ban on all semi-automatic weapons and their high-capacity clips, as well as background checks at all gun shows. Still, the NRA is determined to stop such reforms and is vowing to increase gun sales. Some lawmakers who have been bullied and threatened by those lobbyists have said enough is enough. Others, though, won’t budge, meaning the future of new federal legislation is uncertain.

Therefore, the move by Calstrs is seen as a major step forward for those who favor restricting the use of high-capacity rifles — the kinds used in the Newtown, Connecticut and in the Aurora, Colorado mass killings. The money controlled by institutional investors is a key lifeline for these gun makers, who have chosen to hide behind their hired hands. If they lose their capital, they will be forced to negotiate or they will be driven into the ground.

Gun Makers Take One to the Gut - Forbes

January 30, 2013

READ: Rahm Emanuel Sends Letters to Mutual Funds Urging Them to Blacklist Gun Manufacturers That Oppose Gun Safety Laws

Below is a statement from the office of Chicago Mayor Rahm Emanuel who sent letters to a number of mutual funds urging them to blacklist gun manufacturers who don’t support reform to gun laws.

Mayor Rahm Emanuel today announced that he is asking several mutual funds to divest and blacklist any gun manufacturers that oppose commonsense gun reforms. The Mayor’s letters sent to the mutual funds today come on the heels of his request last week to commercial banks asking them to stop providing financial services to gun companies that stand in the way of reform.

“Just like the banks and pension funds, I believe that these Mutual Funds can exert an enormous amount of influence by taking a stand against gun manufacturers that continue to refuse to support commonsense reforms like required background checks and an assault weapons ban. The time is now for everyone to do anything they can to stop these military-style guns and magazines from ending up on the street and putting families, children and police officers at risk,” said Mayor Emanuel. “This has to be about doing what is morally right and not what is financially beneficial to their bottom lines.”

Mayor Emanuel is sending a letter today to the chief executives of Allianz, BlackRock, Dimensional Fund Advisors, Vanguard, James Investment Research and Capital World Investments. All of the funds own stock of gun manufacturers who are actively lobbying against safety reforms. The mayor is asking the mutual funds to divest from these companies until they support these reforms.

The Mayor’s latest request complements other actions he has recently taken, including encouraging city leaders from the across country to divest from companies that manufacture or sell assault weapons. Mayor Emanuel has also introduced an ordinance to strengthen Chicago’s gun laws and is supporting state and federal safety legislation.

Earlier this month, Mayor Emanuel ordered a portfolio analysis from the five pension and retirement funds for Chicago employees to determine if fund managers hold underlying debt or equity positions in companies that manufacture or sell assault weapons as the first step towards removing these companies from the investment plans. This week, the Chicago Municipal Employees Annuity and Benefit Fund (MEABF) board voted to divest more than $1 million from three companies that manufacture assault weapons – Freedom Group, Smith and Wesson and Sturm Ruger. Other cities, including Los Angeles and Philadelphia have followed suit.

The Mayor called on Chicago’s sister agencies – the Chicago Transit Authority, Chicago Housing Authority, Chicago Park District – to conduct the same review. The Chicago Teachers Pension Fund (CTPF), which has $9.5 billion in assets, already voted to divest its investments with gun manufacturing companies.

READ EMANUEL’S LETTER TO BRIAN GAFFNEY OF ALLIANZ ASSET MANAGEMENT BELOW:
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Rahm Emanuel Letter to Brian Gaffney of Allianz Asset Management by


Posted in: Chicago, gun control, Rahm Emanuel, Rahm Emanuel Blacklist Gun Manufacturers, Rahm Emanuel Letters to Mutual Funds