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Bill limiting CalPERS, CalSTRS investments withdrawn
By Dale Kasler - dkasler@sacbee.com
Last Updated 1:15 pm PDT Wednesday, April 9, 2008
A state assemblyman Wednesday withdrew a bill that would have prevented California's two public pension funds from making new investments in private-equity firms partly owned by foreign governments with weak records on human rights.
Assemblyman Alberto Torrico, D-Newark, withdrew AB 1967 the same day that Gov. Arnold Schwarzenegger announced his opposition. Torrico, in a press release, said he remains committed to the issue but will put the bill on hold in order "to properly address some of the concerns that have been raised."
Officials at the California Public Employees' Retirement System and the California State Teachers' Retirement System had said AB 1967 would have cost them billions of dollars.
The bill would have prevented the two funds from investing in private-equity firms wholly or partly owned by foreign governments that don't comply with major human-rights agreements.
Critics said the bill was really an attempt to help a powerful labor union, the Service Employees International Union. The SEIU has been trying to organize workers at a nursing-home chain owned by private-equity firm the Carlyle Group. One of Carlyle's investors is Abu Dhabi, a member state of the United Arab Emirates. The emirates' human-rights record is poor, says the U.S. State Department.
CalPERS and CalSTRS wouldn't have been forced to sell their existing multibillion-dollar investments with Carlyle. But they said they would have been prevented from making new investments with many private-equity firms.
"We understand (Torrico's) intentions around the human rights issue," said spokesman Brad Pacheco of the California Public Employees' Retirement System. But the bill would have been "detrimental to the fund," he said.
Schwarzenegger declared his opposition earlier Wednesday in an opinion piece published in the Los Angeles Times.
About the writer:
- Call The Bee's Dale Kasler, (916) 321-1066.
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