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California Cultures September 22, 2003 It defies belief that after all
the corporate scandals of recent years the head of the New York Stock
Exchange still had the chutzpah to run off with an obscenely large
"compensation" package. Even after being exposed -- by the
press, not by the so-called "regulators" -- Dick Grasso thought
he could tough it out. The turning point came when California's Treasurer
Phil Angelides and Sean Harrigan, the director of the state's public
employee pension fund, and Jack Ehnes, the director of the teacher's
retirement fund, called for his head -- and got it. Way to go, Phil, Sean and Jack.
Don't lose any sleep for Mr.
Grasso. He walked away with $140 million in retirement funds (which
included a $5 million bonus for showing up to work after Sept. 11). He
won't have to worry about paying the rent for the rest of his life. Nor
will his four children, or their heirs for generations to come. That's more than can be said
for millions of us who have watched our investments and retirements
dwindle or disappear. What Grasso's greed, and his fall, revealed is that
California has a huge amount of clout in the financial world. It needs to
wield that clout far more than it has in the past. Business interests, and some on
the recall campaign trail, love to describe California as
"anti-business." Yet California's investments in Wall Street
continue to dwarf those of any other state. The pension funds for the
University of California employees, for public school teachers, and for
all other state workers amount to a third of a trillion dollars. That
doesn't include the hundreds of billions of investment dollars more of
ordinary Californians who don't work for the state. Angelides is on the right
track. He says he wants to "wield the power of the purse" to
help ensure that "worthy reforms become new realities in the
financial marketplace." He says California must be at the
"center of an emboldened investor movement." For starters, he's banded
together with other state treasurers to adopt a set of "Investment
Protection Principles" that investment banks and money managers must
meet. He's also stopped investing the state's short-term tax revenues in
corporations that move their company headquarters to offshore tax havens
such as the Bahamas and the Cayman Islands. He's mobilized shareholders to
put pressure on giant companies such as Ingersoll Rand, Accenture and Tyco
to "reincorporate" in the United States. California can do more. We
should stop awarding state contracts to companies with phony offshore
headquarters. A bill to that effect, Sen. John Burton's SB640, has cleared
the Legislature, and Gov. Gray Davis should sign it. According to the
Franchise Tax Board, the state will lose $132 million over the next 10
years in taxes simply from this one tax-dodging ruse. In the middle of our
nightmarish budget crisis, we can't afford to lose that kind of money. As Angelides points out, the
total amount garnered from all bank robberies between 1996 and 2000 was
$204 million -- a fraction of the $850 million California public employees
lost from their investments in a single company named Worldcom. It's time to fight back.
Angelides and his colleagues won one for California last week on Wall
Street. Let's keep going.
Copyright
© 2002 Global Action on Aging |
