California Pension Votes to Sell Shares of Smith & WessonMichael B. Marois
The California Public Employees’ Retirement System’s board voted to divest its $5 million in shares of Smith & Wesson Holding Corp. and Sturm Ruger & Co. because the companies make weapons banned in the state.
California Treasurer Bill Lockyer, a member of the fund’s board, proposed that the state’s public pensions sell the shares after the Dec. 14 killings of 20 children and six adults at Sandy Hook Elementary School in Newtown, Connecticut. The move has been mirrored by public funds across the U.S.
“There’s only one way we speak,” Lockyer, a 71-year-old Democrat, said prior to the vote. “It’s with money.”
Calpers, the biggest U.S. pension fund with $254.5 billion, owned 196,664 shares of Smith & Wesson Holding Corp. and 116,594 Sturm Ruger & Co. shares as of Dec. 31, according to data compiled by Bloomberg. The companies are the biggest publicly traded U.S. gunmakers. Both stakes were increased in the past quarter, the data show.
California, the largest state by population, bans some types of firearms and ammunition magazines that hold more than 10 rounds. The California State Teachers’ Retirement System decided last month to begin selling its stakes in gunmakers.
The teachers plan, the second biggest U.S. pension with a market value of $158 billion, had $2.9 million invested in Smith & Wesson and Sturm Ruger, through index funds, when it decided to divest.
The teachers’ pension also held a stake in New York-based Cerberus Capital Management LP. The private-equity firm owned Freedom Group Inc., the maker of the Bushmaster AR-15 rifle that police said was the primary weapon in the Sandy Hook attack.
The Calpers board’s vote was 9-3. Board member Dan Dunmoyer, who opposed the proposal, said Calpers invests in other companies that make products that are prohibited under state law, such as certain types of gasoline available in other states, some acne medications and even automobiles that don’t meet California’s clean-air standards.
“The premise under which we are taking this motion is fraught with peril,” he said. “The intent of this is noble and if I thought it would prevent future shootings, I would carry this motion myself.”
The school attack, the second deadliest in U.S. history, reignited a national debate over gun-control laws and stricter bans on semiautomatic weapons such as the AR-15. California specifically bans the Bushmaster.