Wednesday, March 6, 2013

Oakland Makes Divestment from Gun Companies Official Policy

By Darwin BondGraham
Wed, Mar 6, 2013 at 1:31 PM

The Oakland City Council voted last night to divest the city as completely as possible from firearms and ammunition manufacturing companies. The resolution, brought forth by City Attorney Barbara Parker, prohibits the city from holding investments in gun and ammo companies, urges the city's old Police and Fire Retirement (PFRS) and Municipal Employees Retirement (OMERS) pension systems to divest from gun and ammo companies, and also urges other cities and state agencies to follow suit.

Barbara Parker
  • Barbara Parker
The resolution, which was co-authored by Councilmembers Rebecca Kaplan and Larry Reid, cites just a few of Oakland's violent gun statistics: 110 homicides in 2011, 840 non-fatal shootings, 502 cases of vehicles and homes hit by gunfire, and 4,600 gun discharges identified through the ShotSpotter system.

Oakland has a history of taking on gun companies. In 1996, Oakland banned the sale of "junk guns," the small, cheap pistols manufactured by the "Ring of Fire" companies, a secretive network of gun manufacturers in the Los Angeles region that flooded America with dangerous weapons in the 1990s. In 2000, Oakland banned the sale of compact handguns, directly undermining the firearms industry's big marketing push of the new weapons — a sales blitz that included legislative campaigns funded by the NRA and gunmakers to pass concealed carry laws in as many states as possible.

Prior to Tuesday's vote, the city treasurer analyzed Oakland's current investments, including Port of Oakland money, finding no holdings in gun or ammunition makers. It is unknown if the PFRS or OMERs pensions are invested in gun companies, and the resolution is not binding on their investment decisions.

Other cities and state agencies are pursing Oakland's strategy of making divestment from gun companies an official policy. After the Sandy Hook massacre in December, the California State Teachers Retirement System (CalSTRS) put pressure on Cerberus Capital, a private equity firm that CalSTRS has placed several billion in funds with, to sell off its majority shares in the Freedom Group corporation. Freedom Group is the maker of the Bushmaster assault rifle that has been used in multiple mass slayings, including Sandy Hook. The board of the nation's biggest pension fund, the California Public Employees Retirement System, voted in February to divest from gun makers Smith & Wesson and Sturm Ruger, which CalPERS owned $5 million of shares in.

California state Treasurer Bill Lockyer has joined New York City's Public Advocate Bill de Blasio in calling on the nation's 55 largest pension funds with more than $1.3 trillion in assets to join them in divesting from gun companies. In a joint letter they sent on February 27, they explained that "these divestment actions are more than just symbolic—they can change the way gun companies do business."

Shares of Smith & Wesson and Sturm Ruger, the only two publicly traded gun companies, both tumbled by approximately 15 percent in the days after the Sandy Hook massacre. Both have since regained their value, but could face further devaluation as big pension funds and other socially conscious investors sell off blocks of stock.

Most gun companies — such as Glock, from which the Oakland Police Department purchases pistols — are owned by secretive private and foreign companies with a handful of shareholders, making divestment an impossible policy.

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