Los Angeles Mayor Tom Bradley said today that he will replace the commissioners who oversee the city's three pension systems if they do not approve his proposal to purge pension funds of all investments in firms that do business in South Africa.
The commissioners will "approve the policy of the mayor and the City Council or another set of commissioners will," Bradley said during a morning press conference where he appeared with South African Anglican Bishop Desmond Tutu, the Nobel laureate and prominent anti-apartheid leader.
The mayor's comments were made on the spur of the moment in the midst of questions to him and Tutu on the issue of divestment.
About 20% of the city's pension funds, which total nearly $4 billion, are invested in companies that do business in South Africa, according to city officials.
3 Sets of Commissioners
The funds are supervised by three sets of commissioners. The mayor appoints the majority of the members of two of three commissions, subject to the consent of a majority of the City Council. Under authority vested in him by the City Charter, Bradley with the consent of a council majority can remove the commissioners he appoints.
The mayor appoints three of the five commissioners of the City Employees Retirement System, five of the seven commissioners of Police and Fire Pension System and two of the eight members of the pension board of the Water and Power Employees Retirement System.
Two of the commission chairmen, David Bow Woo of the Police and Fire Pension System and Vincent Foley of the Water and Power Employees Retirement System, said earlier this week, in response to Bradley's divestment proposal, that they were waiting for a city attorney's opinion on divestment before deciding on the matter. William Woods, chairman of the City Employees Retirement System, could not be reached for comment.
However, Foley and Woo indicated that they had reservations about divestment because of the impact it could have on the financial performance of the funds.
Major U.S. Companies
Divestment would bar pension funds from owning the stocks and bonds of many major American corporations.
Bradley's divestment proposal, announced Tuesday, called for divesting the pension funds, removing city deposits from banks that lend money to South Africa, imposing a fee on the sale of South African gold coins known as krugerrands and setting up a nonprofit corporation to fight the apartheid system.
Bradley sent a letter to the pension commissioners Tuesday saying he believed that divestment of the pension funds "can be accomplished in a manner consistent with your fiduciary responsibilities."
The commissioners are required by law to manage the pension funds in a way that brings the best possible return for the beneficiaries.
On Thursday, a committee of the City Council began considering the mayor's proposal.