Lt. Governor Newsom implores CalPERS not to cave into Big Tobacco
Monday's key vote could end pension fund's 16-year ban on public investments in tobacco industry
SACRAMENTO - California Lt. Governor Gavin Newsom today implored CalPERS' investment committee to resist the lure of Big Tobacco ahead of a vote on Monday, where members will consider a recommendation to reinvest public funds into the tobacco industry. CalPERS, which is responsible for public employee pensions and health benefits, banned investments in tobacco 16-years ago but staff has recommended it reverse course on Monday.
"Ploughing California taxpayers' money back into Big Tobacco is about the most perverse course of action CalPERS can take," said Lt. Governor Gavin Newsom. "Not only is this a predatory out-of-state industry whose child-baiting marketing tactics are disgraceful, but its product is responsible for more than $13 billion in annual healthcare costs. Taxpayers will be forced to pick up part of that tab, including CALPERS' own retiree health benefits. We cannot sell our soul for profit. Investing in death for a return is inexcusable."
CalPERS ended direct investments in the tobacco industry in 2000 but still holds $547 million tobacco stocks indirectly through outside investment funds. CalSTRS, California's teachers' pension fund, fully divested from the tobacco industry in 2009. The Campaign for Tobacco Free Kids estimates that annual healthcare costs in California directly caused by smoking amount to $13.29 billion, of which $3.58 billion are Medi-Cal costs, leaving residents' state and federal tax burdens from smoking-caused government expenditures at $727 per household.
The CalPERS Investment Committee reviews and approves portfolio performance, asset allocation, investment transactions, and investment manager performance. They also establish investment strategies.