Tuesday, December 18, 2012

Things that boggle the mind...

I've refrained from posting anything about the horrible tragedy in Connecticut, both because I haven't been able to separate my emotions from words, and partially because so many people more articulate than I have weighed in. And while it's undeniable that this country needs to engage in serious conversations about gun control and mental health reform, it's also undeniable that giving people a little time to let the sheer magnitude of this massacre sink in will only give traction to action a little later.

But this morning someone shared an article from Fortune magazine that absolutely boggled my mind. The article begins:
"Do you know who owns more than a 6% stake in the maker of .223 Bushmaster rifles, like the one used last Friday to murder 20 first graders and seven adults in Newtown, Connecticut? California public schoolteachers."
It turns out that the California State Teachers' Retirement System (CalSTRS) committed to invest $500 million into a $7.5 billion Cerberus Capital Management fund that has helped bankroll Freedom Group, a privately-held firearms conglomerate formed by private equity and hedge fund group Cerberus. Cerberus created the platform in April 2006 via the acquisition of Bushmaster, after which it added another 10 makers of firearms, ammunition and accessories (including Remington, Marlin Arms and Barnes Bullets).

This means that the California State Teachers' Retirement System effectively could own a 6.67 percent stake in the gun maker. This despite the fact that the CalSTRS says it considers non-economic factors in making investment decisions, "for the purpose of ensuring that the Retirement System, either through its action or inaction, does not promote, condone or facilitate social injury."

Additionally, CalSTRS has identified 21 risk factors "that should be included within the financial analysis of any investment decision," including one titled Human Health, which says:
"The risk to an investment's long-term profitability from business exposure to an industry or company that makes a product which is highly detrimental to human health so that it draws significant product liability lawsuits, government regulation, United Nations sanctions and focus, and avoidance by other institutional investors."
"Clearly you can make a case that this company's products fall within the 21 risk factors, particularly the one regarding human health," says CalSTRS spokesman Ricardo Duran. "But there are a lot of products that can be used responsibly or irresponsibly, and in this case it was used irresponsibly... Now that a tragic event like this has occurred, I'm sure that it is something that we will be discussing going forward."

But according to the article, the system didn't have a similar conversation when a Bushmaster rifle was used in the Aurora theater massacre this summer.

Know where your money is invested. Ask questions. And let's push companies to put their money where they say their mission is. We've seen far too many companies secretly funding anti-equality and other causes, and they need to be held accountable.

Read the full article here.


  1. Larry,
    It is easier for a person to get a gun, than it is to get mental health services and prescriptions.