(February 10, 2010) — California Attorney General Edmund G. Brown Jr. criticized the state’s largest pension funds for continuing to invest in Iranian companies.
He focused his criticism on the $202.1 billion California Public Employees’ Retirement System (CalPERS), the largest public pension fund in the US, and the $134.1 billion California State Teachers’ Retirement System (CalSTRS). He asserted that the two funds have breached a state law, The California Public Divest from Iran Act, that went into effect on January 1, 2008, requiring CalPERS and CalSTRS to divest from companies in the defence, nuclear, petroleum and natural gas industries in Iran. Further, the law stipulates that the funds must divest from any company that fails to cease or limit operations in the Islamic Republic.
According to a news release issued February 8 from the Office of the Attorney General, the funds failed to:
1. Explain whether investments in companies with ties to Iran have been reduced;
2. Describe when the funds anticipate fully divesting from these companies;
3. Summarize investments transferred to funds that exclude these companies; and
4. Calculate divestment costs or losses.
“CalPERS and CalSTRS need to honor the state law requiring them to divest from companies doing business in Iran,” Brown said to Legal Newsline, adding that the law was enacted to prevent California companies from investing in foreign companies based in states that “commit egregious violations of human rights and sponsor terrorism.”
CalSTRS spokesman Ricardo Duran said the fund has divested six or seven companies identified as doing business in Iran, such as PetroChina and Sinopec, both Chinese companies; as well as Malaysian firms Petronas and MISC Berhad” a shipping company, according to Pensions & Investments.
CalPERS has more than 1.6 million members. CalSTRS has 833,000 members.
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