February 15, 2013
The city’s $46.6 billion teacher pension system sold its shares in the firearms industry yesterday, becoming the country’s largest retirement fund to divest from publicly-traded gun manufacturers since December’s elementary school shooting in Newtown, Conn., Comptroller John Liu announced today.
But the vote to do so wasn’t unanimous — and the single dissenting ballot came from a member appointed by the city’s most powerful gun control advocate: Mayor Bloomberg.
Ray Sarola, acting as a fill-in for Bloomberg appointee Carolyn Wolpert, voted against divestment during an executive session meeting last week, a spokesman for the Teacher Retirement System said. Deputy Chancellor Kathleen Grimm, of the Department of Education, missed the vote but said yesterday at the board’s monthly public meeting that she opposed divestment as well.
“Pension decisions should rarely, if ever, be based on other criteria except what’s best for pensioners, which should benefit taxpayers as well,” Sarola, a senior policy advisor in the Mayor’s Office of Pensions and Investments, said in a statement provided by Bloomberg spokeswoman Lauren Passalacqua. Passalacqua said Bloomberg is recused of pension investment decisions because his own personal investments made it a conflict of interest.
But supporters of divestment pounced on what they saw as an act of hypocrisy.
“I don’t understand it,” said Michael Mulgrew, President of the United Federation of Teachers, which had its three trustees vote in support of divestment. “This is the guy that’s out there and wants to be the leader on gun control in the country.”
Bloomberg has been an outspoke critic of the gun lobby and has aggressively pursued laws that would restrict the industry’s ability to manufacture high-capacity firearms, such as the Bushmaster semiautomatic rifle used in the Newtown shooting. Bloomberg has spent millions of dollars to support candidates for elected office who support gun control, and oppose those who don’t.
Divestment from firearms holdings has become a growing trend among city and state pension systems since 20 children and six adults were shot and killed at Sandy Hook Elementary School in Newtown on Dec. 14. In January, California’s teacher pension fund voted unanimously to begin withdrawing shares from its firearms holdings.
Trustees are legally required to only invest or divest in shares that are in the best interest of the fund’s long-term health. But Liu, who serves as an investment advisor to the fund, said in a statement that the $13.5 million divestment met fiduciary standards.
“There is no need to support these companies, whose products can destroy lives and shatter communities in the blink of an eye,” Liu said in a statement. “Our investment portfolio gains nothing by doing business with these firms, and this is a sound decision that sends an important message about our commitment to addressing the plague of gun violence in every possible way.”