Launching petitions and sending letters to the California Public Employees’ Retirement System (CalPERS) and the New York State Common Retirement Fund, two advocacy groups are asking they divest from a fund that is paying one of President Donald Trump’s companies to run a New York hotel.
The legal advocacy groups, Massachusetts-based Free Speech for People and Courage Campaign in Los Angeles, are urging the two pension funds to either divest from the CIM Fund III, which owns the Trump SoHo Hotel and Condominium, or work with other investors in an effort to have CIM cease all relations with the Trump organization.
CIM currently has $19.7 billion in assets under management.
“The money used for this investment comes from mandatory deductions from the paychecks of public employees,” the letters said. “These employees are thus forced to indirectly subsidize President Trump beyond the Constitution’s mandate of a fixed salary.”
Article II of the US Constitution prevents the president from receiving additional payments beyond his salary from state governments. According to Reuters, not only do public pension funds from at least seven US states occasionally send millions of dollars to CIM, but the fees the funds pay CIM may also violate Article II.
According to a statement, CIM “is committed to creating attractive investment opportunities for its investors and then overseeing those investments to produce the best outcomes possible for the funds it manages.” The statement also says that the Trump SoHo is underperforming and CIM is making efforts to improve performance.
“The Fund’s investment in CIM Fund III, which dates to 2007, is in the process of being liquidated as part of its normal cycle,” a spokesperson for New York State Comptroller Thomas DiNapoli told CIO. “As a limited partner, the fund has limited rights as an investor and does not make or control CIM’s investment choices.”
CalPERS, which disclosed it paid CIM $1,722,418 in management fees in Q1 2017, declined to comment.
Tags: CalPERS, CIM, Donald Trump, New York State Common Retirement Fund