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SOUTHERN CALIFORNIA / A news summary | The Regional

Dump Tobacco Stocks, Retirement Board Urged

September 13, 2000

VENTURA — The Board of Supervisors on Tuesday agreed to send a letter to Ventura County's retirement board urging it to pull out of tobacco stock investments, a move designed to raise the stakes in a raging war over tobacco settlement money.

"To go into a nationwide lawsuit [against tobacco] and then turn around and invest [in it] is disingenuous," said Supervisor Kathy Long.

Last month, the nine-member retirement board defeated a motion by Supervisor Frank Schillo to divest its tobacco stocks.

After a debate marked by noticeably strong support from three of the supervisors--Schillo, who proposed the letter, Long and Susan Lacey--supervisors voted 4 to 1 to put additional pressure on the board to reverse its decision. Supervisor John Flynn dissented, arguing that, though he found it difficult to disagree with the philosophy of his colleagues, to make a recommendation to the board would be bad policy.

"It's hard for me to oppose what you're doing," Flynn said. "We can't draw the bottom line. We have to let the [fiscal] managers do the managing."

Although Supervisor Judy Mikels voted to write the letter, she did so with reservations about the potential precedent of withdrawing a particular kind of stock. But she argued that the decision could make good economic sense, as tobacco companies are suffering from a series of high-profile legal losses and could be primed for bankruptcy.

So far, the investment board has received only one complaint about its tobacco stocks, and two phone calls supporting its decision last month, said Tim Thonis, assistant retirement board manager.

He said it would be difficult for the board to poll its more than 11,000 investors, who live in 50 states and in other countries.

The retirement board has historically been reluctant to put restrictions on how any of its money is invested. In the early 1990s, the board came under fire for keeping South African stocks even as the state boycotted those investments.

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