Cali Treasurer Urges Transparent Election Spending by CalPERS, CalSTRS‎

(June 2, 2011) — The nation’s two largest public pension funds — the $235.2 billion California Public Employees’ Retirement System (CalPERS) and the $155.4 billion California State Teachers’ Retirement System (CalSTRS) — have been urged to develop policies for full disclosure of corporate political spending.

The request for providing transparency in political spending by the companies in which the funds invest comes from a request by Bill Lockyer, California’s state treasurer and a trustee of both retirement systems. Lockyer has also called for for oversight of corporate political spending by companies’ boards of directors.

“Studies have shown a negative link between a company’s political spending and the resulting value of the firm,”Lockyer said in a statement. “As fiduciaries, it’s our duty to ensure investors have the information they need to accurately evaluate a firm’s profitability and long-term sustainability.” Thus, he noted that shareholders such as pension funds should be able to count on a company’s board of directors to diligently oversee campaign spending policies and practices to make sure they serve the best interests of the company and investors.

The US Supreme Court’s decision in Citizens United vs. Federal Election Commission, issued Jan. 21, “opened the floodgates to unlimited corporate spending in political campaigns,” Lockyer said.

In response to the letters, CalPERS spokesman Clark McKinley wrote in an email: “While we don’t list the political contribution disclosure issue in our US corporate governance principles, the Council of Institutional Investors principles do address it…We also have consistently voted to support proxy proposals to have companies disclose political contributions.” Meanwhile, CalSTRS board’s corporate governance committee is planning on discussing the political spending disclosure at its meeting on Thursday.