California Lt. Governor Gavin Newsom and State Treasurer John Chiang both released statements Tuesday urging CalPERS—California Public Employees’ Retirement System—to oppose investing in the tobacco industry during an important vote that will take place Dec. 19.
CalPERS’ pension fund serves more than 1.7 million members in the CalPERS retirement system, and also administers benefits for 1.4 million members and their families in its health program. It is the largest defined-benefit public pension in the U.S.
CalPERS ended direct investments in the tobacco industry in 2000 but still holds $547 million tobacco stocks indirectly through outside investment funds. On Monday CalPERS investment committee members will consider reinvesting in the tobacco industry.
“I continue to believe that investing in tobacco-related securities is a bad economic decision for CalPERS beneficiaries, for the state in general and for the world as a whole, whether we invest directly or through others,” Chiang wrote in a letter sent to Henry Jones, Chair of the CalPERS’ Investment Committee.
“Ploughing California taxpayers’ money back into Big Tobacco is about the most perverse course of action CalPERS can take,” said Lt. Governor Gavin Newsom. “Not only is this a predatory out-of-state industry whose child-baiting marketing tactics are disgraceful, but its product is responsible for more than $13 billion in annual healthcare costs. Taxpayers will be forced to pick up part of that tab, including CALPERS’ own retiree health benefits. We cannot sell our soul for profit. Investing in death for a return is inexcusable.”
According to the Campaign for Tobacco Free Kids annual healthcare costs in California directly caused by smoking amount to $13.29 billion, of which $3.58 billion are Medi-Cal costs.