Teachers union presses CalSTRS to unload gun investment

A group of California schoolteachers Thursday stepped up the pressure on CalSTRS to unload its investment in the company that made the rifle used to massacre 26 people at a Connecticut elementary school.

The California Federation of Teachers staged a "teach-in" outside the pension fund's West Sacramento headquarters, as the CalSTRS board met inside. Several teachers spoke, and one read aloud a letter of support to the federation from seven families of victims of the 2012 shooting at Sandy Hook Elementary School in Connecticut.

An oversized "report card" scolded CalSTRS Chief Investment Officer Christopher Ailman for not unwinding the investment.

Ailman attended the protest but didn't speak. He told The Sacramento Bee: "I want to hear what they have to say. They're my members." He declined to comment on the group's demand to liquidate the investment.

At issue is CalSTRS' continued $375 million investment in Cerberus Capital Management, a New York private equity firm. Cerberus owns gun maker Freedom Group.

After the Sandy Hook shooting, CalSTRS made a policy decision two years ago to sell investments in manufacturers of firearms that are illegal in California. That would include Cerberus.

But the pension fund hasn't been able to unwind the Cerberus investment, in large part because of legal restrictions that make it hard to opt out of private equity investments, said pension fund spokesman Michael Sicilia. The fund is also worried about selling the investment at a loss, which would contradict the fund’s responsibility to maximize profits.

Those arguments didn't sway the teachers federation, which called on the California State Teachers' Retirement System to sell the Cerberus holding, even if it does so at a loss.

"It's our money," said Doug Orr, a professor at City College of San Francisco, saying divestment would ratchet up pressure on gun makers. "The way you get their attention is through money....We need to take the money away."

Not every teacher believes CalSTRS should be pressured into an immediate sale. "I have full confidence in the staff here," said Maggie Ellis, an Elk Grove schoolteacher and chair of retirement committee at the California Teachers Association. "We will be out of firearms; there's a commitment to do that."

She compared the situation to CalSTRS' decision to sell its tobacco stocks in 2000. "It took time, but we did do it," said Ellis, who attended the West Sacramento protest.

The protest included the screening of a 4-minute documentary in which schoolteachers complained about the continued CalSTRS investment in Cerberus.

A simultaneous protest took place at Cerberus' Los Angeles office.

This story was originally published April 2, 2015 at 12:54 PM with the headline "Teachers union presses CalSTRS to unload gun investment."