FILE - In this March 8, 2018, file photo, California gubernatorial candidate, state Treasurer John Chiang, a Democrat, speaks at a conference in Sacramento, Calif. Chiang will be joined family members of people who died in a 2015 shooting in San Bernardino, Calf., at a meeting of the California Public Employees Retirement System, Monday, March 19, 2018, calling on the nation's largest public pension fund to stop investing in companies that sell assault-style weapons banned for ownership in California and devices that allow guns to fire more rapidly. (AP Photo/Rich Pedroncelli, File)

California pension fund faces pressure to divest from guns

March 19, 2018 - 11:17 am

SACRAMENTO, Calif. (AP) — Families of mass shooting victims are joining California State Treasurer John Chiang in calling on the nation's largest public pension fund to stop investing in companies that sell assault weapons and devices that allow guns to fire more rapidly.

Chiang will speak Monday at a board meeting of the California Public Employees' Retirement System alongside family members of people who died in the 2015 terror attack that killed 14 people in San Bernardino, California, and advocates for stricter gun laws. The wife of a high school teacher who died in Parkland, Florida, sent a letter supporting Chiang's effort. Chiang, a Democrat, is running for governor.

"Enough is enough," Chiang told The Associated Press in an interview. "You have to go to what moves people and we know money moves people."

Chiang asked in October after the Las Vegas mass shooting for CalPERS and the state's teacher pension fund, known as CalSTRS, to sell its stock in companies that sell "military-style assault weapons" and devices such as bump stocks that help simulate automatic weapons. Monday is his first in-person call for action. California severely restricts the sale and possession of assault-style weapons.

The February shooting at Marjory Stoneman Douglas High School has spurred fresh efforts to put financial pressure on the National Rifle Association and companies that make and sell guns.

"We keep having these mass shootings," said Robert Velasco, whose 27-year-old daughter, Yvette, was killed in San Bernardino. "If we can encourage them to divest in companies, wholesalers and retailers, of these types of weapons it could send a message throughout the country to other institutional pensions to do the same."

CalPERS has a combined roughly $850 in million holdings in Dick's Sporting Goods, Walmart, Kroger, Big 5 Sporting Goods and Sportsman's Warehouse Holdings. The fund's total value is $354 billion.

The fund approached all five in the fall, asking them to stop selling assault weapons. Following the Florida shooting, Dick's, Walmart and Kroger announced they would stop selling assault-style guns and would raise the age for firearm purchase to 21. Chiang attributed CalPERS efforts as one pressure point that helped make change. New Jersey, Connecticut, Illinois and New York are also discussing divesting from gun-related companies.

But experts, including at California's pension fund, have long questioned the financial and political effectiveness of divestment. By divesting, shareholders give up their power to exert influence and often times simply turn over the shares to other owners who may not take the same political or social stance. As of June 2017, CalPERS various divestment initiatives had cost the system more than $8 billion, according to a divestment memo put together by the fund.

"There's considerable evidence that divestment is an ineffective strategy for achieving social or political goals since the usual consequence is often a mere transfer of ownership," CalPERS' investment office, wrote in a presentation for the board.

Still, using divestment to make political statements is a popular tactic in California. The pension fund decided in 2016 to sell off the last of its tobacco investments and has similarly started reducing its investments in coal. The state began divesting from gun manufacturers in 2013 following the shooting at Sandy Hook Elementary School.

CalSTRS will present research on its holdings in gun retailers in May.

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