LA Times Blasts Divestment Crusade Targeting Dakota Pipeline
One of the newspapers leading the charge against Exxon Mobil is now criticizing a Democratic-led scheme forcing California’s enormous pension fund to divest from the Dakota Access Pipeline.
Forcing the California Public Employees’ Retirement System (CalPERS) to purge all assets associated with the company constructing the multi-billion-dollar pipeline would blow an enormous hole in the state’s pension fund, the Los Angeles Times editorial board wrote on Tuesday. Its warning stands in stark contrast to its ongoing crusade against Exxon’s climate research.
The editorial board was responding to proposed legislation from California directing the $300 billion fund to cut all ties from institutions investing in the so-called DAPL, a pipeline that has come under intense scrutiny from environmentalists and Indian American tribes. The paper opposes the 1,172-mile-long pipeline but is not in favor of divestment.
The bill,spearheaded by Democratic Assemblyman Ash Kalra, would compel CalPERS to dump shares in Dakota Access LLC and Energy Transfer Partners (ETP). It would also have to sever relation with 11 other banks associated with DAPL.
“The bill, if it were to become law (and it shouldn’t), wouldn’t stop the project from being completed … It would, however, blow a multi-billion-dollar hole in the pension funds — and the public pocketbook, because state and local taxpayers would be left to fill that hole,” the paper wrote.
“What was Kalra, a former San Jose City Council member who is no doubt familiar with how pensions are financed, thinking when he made this proposal?” the LA Times asked before suggesting the congressman’s proposal might have been an exercise in self-promotion.
It called the proposal an “overly broad” that could potentially cost CalPERS $4 billion. The pension staff is still evaluating what divestment would cost the fund, which has had to deal with similar ploys in the past.
Democrats targeted CalPERS’ fossil fuel investments last year. Democratic Congressmen Ted Lieu and Mark DeSaulnier, for instance, sent a letter to the fund’s CEO Anne Stausboll in March 2016 suggesting the pension fund’s decision to invest in Exxon Mobil is “morally suspect.”
CalPERS argues that it shouldn’t vacate investments from DAPL for the same reason it refused to disconnect from Exxon.
The fund maintains that staying involved in ETP gives CalPERS the ability to force projects like DAPL to change direction – the group’s staff argued Monday that there is “considerable evidence” that divesting is a fool’s errand, because it’s merely a transfer of ownership from one institution to another.
The LA Times has spent months running triage for the anti-Exxon campaign. It tried pushing California’s new attorney general to address the probes and allegations that Exxon lied to the public and investors at the seriousness of man-made global warming.
Another fold prompting the LA Times’ warning is the understanding that whatever hurts CalPERS could potentially splash back on the newspaper’s employees and investments.
A recent survey conducted by business advisory firm FTI Consulting shows retirees do not want their pensions “politicized” by fossil fuel divestment advocates. Pensioners would rather have their pensions invest in technologies that green the environment, an idea carrying less political baggage.
The survey found 64 percent of pensioners want their pension fund manager “maximizing returns” on the money they’ve invested, not wallowing around in political minutia.
Ninety-six percent of those surveyed told researchers they are “likely to cast a ballot in the upcoming presidential election,” and a majority of the respondents opposed divesting from fossil fuels.
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