A series of calls demanding that California public pension funds pull their money out of divisive industries such as guns and fossil fuels is stirring opposition that could lead to a contentious election for seats on the CalPERS Board of Administration this year.
Treasurer John Chiang, a member of the CalPERS board, put forward the most recent divestment request last week, urging the fund to withdraw its investments from national retailers that sell guns that are illegal in California.
This week, a Southern California police officer who scolded Chiang during his presentation pulled papers to run for a seat on the board. Jason Perez of the Corona Peace Officers Association says he's motivated to run for the board because he worries that social and environmental concerns are causing the fund to miss out on revenue.
“The reason I’m doing this is I’m selfish; I want to retire,” Perez said.
Three CalPERS board members are up for re-election this year: Priya Mathur, Rob Feckner and Theresa Taylor. All three are labor-supported public employees.
The three on Monday declared their intent to seek re-election. The filing deadline for their challengers is May 17. Perez intends to challenge Mathur.
Perez’s union has been a regular presence at CalPERS since environmental activists last year urged the board to divest from the controversial Dakota Access Pipeline. Another failed proposal in the Legislature would have had CalPERS divest from companies that work on President Trump’s proposed border wall.
Those proposals worried retirees and may have played a role in the December CalPERS election in which school district administrator and divestment critic Margaret Brown unseated incumbent Michael Bilbrey. Perez’s union endorsed Brown.
The California Public Employees’ Retirement System, with about $350 billion, has only about 70 percent of the assets it would need to pay all of the money it owes to retirees and public workers. It estimates that it missed about $8 billion in potential earnings because of its divestment from tobacco, coal, certain gun manufacturers and apartheid-era South Africa.
CalPERS generally opposes divestment, viewing it as a practice that increases overall risk. Sometimes the Legislature forces its hand, such as the 2015 law that nudged CalPERS to divest from coal.
Chiang wanted CalPERS to follow up on a letter he wrote in October urging it and the California State Teachers’ Retirement System to consider divesting from national retailers that sell weapons that are illegal in California.
CalPERS has about $850 million invested in outdoor retailers that sell guns. Since Chiang's letter, four of the five gun retailers in which CalPERS invests announced policies conforming to CalPERS’ requests, such as refusing to sell high-capacity magazines and declining to sell guns to people under age 21.
Perez at last week's meeting icily told Chiang that the treasurer had manufactured a political "stunt." Several others who addressed the board in favor of divestment lost loved ones in the December 2015 San Bernardino massacre, including a retired California Highway Patrol lieutenant.
Perez called their remarks heartfelt, but considered the discussion to be irrelevant at CalPERS because it did not relate to improving the health of the pension fund.
“I couldn’t sleep the night before or the night after because I had to say those words in front of that board and those victims’ families. We’re neighbors to San Bernardino,” he said.
By a 9-3 vote, the CalPERS board rejected Chiang’s request. The majority of board members said the gun retailers’ concessions showed that CalPERS had already made a difference. Mathur voted against the gun divestment proposal.