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Angelides Defends CalPERS' Record

September 05, 2004

"Pension Funds' Investments Linked to Terror" (Aug. 13) incorrectly stated that the California Public Employees' Retirement System and I, as a CalPERS board member, have not "taken any actions regarding investments and where companies do business," as related to national security.

Going as far back as 2000, well before the tragic events of Sept. 11, 2001, I have repeatedly urged the federal government to identify and make available to the financial markets and all investors a list of companies and investments that pose a threat to national security, so that investors, including our own public pension funds, do not unwittingly make investments that pose risks to our nation.

Yet, to date, the Bush administration has failed to act -- to the detriment of investors and our nation's security.

In December 2000, CalPERS held a public board meeting to address this very issue. At that meeting, CalPERS determined that only the federal government had the resources and capabilities to accurately identify those investments that pose threats to national security and, therefore, urged the federal government to create a list of investments that should be prohibited for that reason.

In July 2002, at my request, both CalPERS and the California State Teachers' Retirement System purchased and reviewed a report prepared jointly by the Investor Responsibility Research Center and Conflict Securities Advisory Group Inc., an entity cited by your reporters in their Aug. 13 article.

The report purportedly provided comprehensive information related to terrorism and arms proliferation on a list of U.S. and global companies. Indeed, the Los Angeles Times reported on those pension funds' actions on July 5, 2002. But the professional investment staffs at CalPERS and CalSTRS concluded, after their extensive analyses, that the report contributed little information of value to assist the pension funds or any investors in making objective and sound investment judgments.

Soon after, in December 2002, I called on the Bush administration -- specifically, Homeland Security Secretary Tom Ridge and then-Treasury Secretary Paul H. O'Neill -- to identify to U.S. investors and the financial markets those companies that are operating in countries and in ways that threaten our national security.

Only the federal government is in a position to bridge this information gap for investors, and I will continue to urge the Bush administration to do what is right by investors and our national security.

Phil Angelides

State Treasurer

Sacramento

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