Public pension fund divestment bill killed in state Assembly

In what critics decry as a “one-man veto,” a Sacramento-area assemblymember has killed state legislation that would have required two powerful public employee pension funds to withdraw at least $9 billion in investments from fossil fuel companies.

Assemblyman Jim Cooper, chairman of the Public Employment and Retirement Committee, pulled SB-1173 Tuesday from Wednesday’s committee hearings, taking the bill out of consideration in the lower house.

The state Senate had already passed the bill, raising hope among supporters that the California Public Employees' Retirement System and the California State Teachers' Retirement System would soon join about 1,500 other public institutions worldwide that have pledged to divest fossil fuel holdings totaling more than $40 trillion, according to 350.org and stand.earth.

Cooper, D-Elk Grove, said in a written statement he has always opposed “political divestment proposals” that could “jeopardize the overall financial solvency” of a system critical to so many people.

“It is no secret that inflation and the cost of living are severely hitting the pocketbooks of all Californians, but working families and those on fixed incomes like our public employee retirees are feeling the pinch even more so,” Cooper wrote. “With a looming recession, the Legislature should be looking at ways to protect the solvency of our pension systems, and should not be considering any proposals that negatively affect them.”

Supporters of the bill, however, say divesting is not only the right thing to do for the planet and for future generations but is fiscally responsible, as well. They say investments in resources that aren’t yet extracted could become stranded in a changing economy that increasingly favors greener energy sources.

Many who supported the bill live on the North Coast, where local educators have taken a lead on efforts to build support for divestment within the California Teachers Association, whose members’ pensions are invested by CalPERS.

Among them are Sunny Galbraith, a chemistry and independent study teacher at Sebastopol’s Orchard View School. Even though it failed, she said, the campaign to pass the legislation at least raised the profile of the divestment movement and brought people aboard for next time.

“In my experience of following bills and pushing things in the legislature, it often takes a couple of cycles for something to pass,” she said. “There certainly was a lot of momentum built.”

The move to short-circuit the bill drew swift criticism from many who were eager to see the two pension funds shift dollars invested in fossil fuel activities toward climate solutions.

Many cited a May Sierra Club report identifying Cooper as “a Democratic favorite of the oil and gas industry” who reported $36,350 in contributions from fossil fuel interests during the last election cycle. Only 10 of 120 state legislators reported receiving more than $30,000, the Sierra Club said.

He has reported more than $218,000 in donations from the oil and gas sectors overall, according to stand.earth.

“It's not surprising that our biggest obstacle to reducing the political influence of the fossil fuel industry in California and beyond is exactly that — the chokehold that Big Oil has on our political systems and our representatives,” said CJ Koepp, communications coordinator at Fossil Free California. “While the bill's progress has been cut short this session, our youth-led coalition has already accomplished so much and we'll be back next year stronger than ever.”

About two dozen mostly young people of color from an organization called Youth Vs. Apocalypse protested Wednesday by standing silently for 6 1/2 minutes with red-painted hands raised in back of the committee meeting room at the state Capitol. Paper signs on the protesters shirts began with the same message, “Harvesting fossil fuels is investing in,” and were finished off with words like, “genocide,” “the destruction of our planet,” “murder” and “the end of life.”

Koepp said divestment advocates would increase their pressure on CalSTRS and CalPERS boards, which are independent organizations whose leadership has resisted calls for divestment on grounds it presents too great a risk to pensions.

The two funds represent about 3 million active and retired California public schoolteachers, college instructors, state and local employees. Together they have investment assets totaling $751 billion, including what was reported in February to be around $9.9 billion in the Carbon Underground 200, those companies with the greatest potential for future emissions from coal, oil and gas reserves.

You can reach Staff Writer Mary Callahan at 707-521-5249 or mary.callahan@pressdemocrat.com. On Twitter @MaryCallahanB.