California Attorney General Edmund G. Brown Jr. is asking CalPERS and CalSTRS to “honor the state law” and divest from companies doing business in Iran.
In a statement issued Feb. 8, Mr. Brown said year-end reports of the $202.1 billion California Public Employees' Retirement System and the $134.1 billion California State Teachers' Retirement System failed to explain whether investments in companies with ties to Iran have been reduced, failed to describe when the funds fully divested in the companies, summarize investments transferred to funds that exclude these companies and calculate divestment costs or losses.
State law requires CalPERS and CalSTRS to “annually report holdings in companies doing business in the defense, nuclear, petroleum, and natural gas industries in Iran and to divest from any company that fails to take substantial action to cease or limit operations in Iran,” Mr. Brown wrote in letters to CalPERS and CalSTRS officials.
In an e-mail response to inquiries, Clark McKinley, spokesman with Sacramento-based CalPERS, said, “We're evaluating the attorney general's request and (are) fine with considering it.”
Ricardo Duran, spokesman with West Sacramento-based CalSTRS, said in an e-mail response that the system “provided a comprehensive accounting of our ongoing compliance with the law” in its latest report.
CalSTRS has divested six or seven companies identified as doing business in Iran, such as PetroChina and Sinopec, both Chinese companies; as well as Malaysian firms Petronas and MISC Berhad” a shipping company, Mr. Duran wrote.
“As fiduciaries the CalSTRS board's first responsibility is to the soundness of the trust fund. To hastily divest would betray that fiduciary responsibility,” he wrote.