Responses to the tragedy in Newtown indicate there are cracks in the great wall the NRA has erected to block gun control-- in places that don't require legislation-- that offer a unique, time-sensitive opportunity for activists
The Newtown tragedy is making big waves in business-- and showing the incredible power of divestment as a political/activist strategy.
After the California State Teacher's Retirement System pension fund (CalSTRS) announced it is "looking over its Cerberus investments " that amount to over $750 million, the investment fund announced that it was selling off its investments in Freedom Group, the company that manufactures the Bushmaster assault rifle that was used by Adam Lanza in his mass murder assault in Newtown. The Freedom Group describes itself as "the world's leading innovator, designer, manufacturer and marketer of firearms, ammunition and related products for the hunting, shooting sports, law enforcement and military markets."
CalSTRS, with a $150 BILLION investment portfolilo, is also reviewing ALL it's portfolios for presence of gun connections.
It gets worse for Cerberus. USA Today reports, "California State Treasurer Bill Lockyer said Tuesday he would like his state's two largest pension funds to sell their investments in gunmakers. The California Public Employees' Retirement Systems, or CalPERS, also has a $400 million investment in Cerberus, according to its most recent quarterly report of its private-equity holdings."
Divesting a major company from an investment portfolio is a huge move.
This quick development, just days after the massacre, demonstrates the incredible power that large investment funds hold when they even mention the consideration of divestment.
Taking a smaller but significant step, "the Dick's Sporting Goods chain, which has more than 500 stores in 44 states, said that "out of respect for the victims and their families" it was suspending the sale of modern sporting rifles nationwide as well as halting gun sales and displays in its store nearest to Newtown, Conn., where the shootings occurred," USA today reports.
The USA Today article also cited Anthony Sabino, a corporate litigator, who said that 'Cerberus' decision to sell the gunmaker was "more of a public relations move. Cerberus doesn't want this stake, whatever its size, showing up on its reports to investors, It's more to placate public pension funds. Money is not the motivation here. Perception is."
Huffpo reports that the the NY City pension fund may sell off almost $18 million worth of gun stocks.
Even Walmart in a token gesture, has removed the Bushmaster page from its website.
This is exciting news to me, as an activist. It shows the potential power of retirement funds that take a principled stand with the hundreds of billions if not trillions of dollars they, combined, wield. If a handful of key people in leadership positions can use their positions to shame retailers or motivate investors to pull money out of gun related industries, then the effects could be really big. Already stock values in some gun companies have plummeted, as Bloomberg reported on Monday,
"Smith & Wesson dropped 5.2 percent to close Monday at $8.65, extending its slide to 9.3 percent over two days after Friday's massacre. Sturm Ruger has fallen 7.8 percent during the period, while Cabela's, an outdoor-gear retailer that sells guns and ammunition, slumped 7.3 percent."
flickr image By Walter Rodriguez
Alan Dershowitz, in a Daily Beast article, argues against the use of boycotting, saying,