|
||||||
|
|
|
|
|
|
|
|
|
 |
 |
 |
 |
|
|
Officials of 14 States Pledge Protection of Pension Assets
By: David Cay Johnston New York Times, August 13, 2002
Representatives from 14 states and one city, Hartford, agreed to "work proactively to clean up corporate corruption and bring about a renewed faith in the financial marketplace." They met yesterday at the New York headquarters of TIAA-CREF, the giant manager of college and nonprofit retirement funds. But while the officials denounced "imperial C.E.O.'s" who are paid far beyond their value and companies that acquire an offshore address to escape taxes on profits earned in the United States, only one of them said he was working to divest his fund of stock in companies that have abused shareholders or taxpayers. The official, Philip Angelides, the California state treasurer, said he was trying to arouse a sustained interest in change among trustees of public pension funds because "one of the real dangers in the reform movement is that it could be quickly forgotten." Mr. Angelides announced last month that his office would not issue contracts to 22 companies that have or are seeking an offshore address. He said he was also trying to persuade fellow trustees of the California Public Employees' Retirement System, or Calpers, and the California State Teachers' Retirement System to sell their shares in companies like Ingersoll-Rand, Cooper Industries, Nabors Industries and Tyco International. Calpers is the nation's largest public pension fund and the California teachers' system is the third largest. He said that divestment often meant persuading a pension fund board to sell shares because few state treasurers have sole power over pension funds. One official who does have such power, H. Carl McCall, the New York State comptroller, who is the sole trustee of the nation's second-largest public employee pension fund, said he would consider selling shares of companies that acquire offshore addresses "at the right time." He declined to be more specific. Mr. McCall also said that in the past he had allowed money managers he hired to vote proxies of shares in their management portfolios on stock option plans for executives. He said that he now considered many of these grants to be excessive and that he had assumed direct responsibility for voting on stock option plans. Mr. McCall called the meeting "the beginning of a renewed era of activism by public institutional shareholders." Referring to the 15 public officials who stood with him, Mr. McCall said "there is power in numbers, and beginning today, corporate America is going to feel our power." Richard Moore, the North Carolina treasurer, who with Mr. Angelides and Mr. McCall organized the meeting, said the states had not devised the necessary structures to oversee their vast holdings of stock. He noted that three decades ago, most public pension funds owned little or no stock, but today they own vast amounts. "Are we equipped to handle the indices of stock ownership?" Mr. Moore said. "I submit that we have to be." Eliot Spitzer, the New York attorney general, said the system of checks and balances that was supposed to ensure honest accounting and honest advice from Wall Street analysts had broken down. Later, in a brief interview, Mr. Spitzer disputed assertions that the Securities and Exchange Commission lacked the staff to police corporations. "I have just 15 lawyers on this," he said, a fraction of those the S.E.C. employs, and still he obtained evidence that Merrill Lynch routinely issued false and misleading analysis to shareholders, leading Merrill to agree to a $100 million fine. "If you know what to look for, you can find it," Mr. Spitzer said. New York, California and North Carolina agreed last
month to require that all investment houses comply with the terms of an
agreement Merrill Lynch reached with Mr. Spitzer that is intended to make
stock analyst reports immune from influence by the investment banking side
of their firms. Mr. McCall said such firms had until Dec. 15 to comply or
steps might be taken to end their business with the three states. A federal judge ruled yesterday that New York State's pension fund should serve as lead plaintiff for a group of shareholders suing WorldCom. The fund, which represents the interests of 950,000 active and retired government employees and their beneficiaries, estimates it lost $306 million from WorldCom's collapse. In rendering her decision, Judge Denise L. Cote in United States District Court in Manhattan noted the "massive loss" and described New York's fund as "an institutional investor with an extraordinary stake in this action." As lead plaintiff, the fund and its lawyers can control the litigation and make significant decisions in legal strategy. FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Action on Aging distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
|
reasurers
and other state officials with influence over more than $1 trillion of
public pension assets said yesterday that they would work together to foster
integrity in corporate America in the wake of the scandals that have cost
these pension plans tens of billions of dollars.