Bad investment

The NYC teacher’s pension fund has divested it’s portfolio of gun companies.  With $46.5 billion in assets, dropping a measly $13.5 million in investments is nothing, and probably goes on all the time as part of managing a fund that size.  Nevertheless, Comptroller John Liu did try to score some cheap political points:

“… “There is no need to support these companies, whose products can destroy lives and shatter communities in the blink of an eye,” said Comptroller Liu. “Our investment portfolio gains nothing by doing business with these firms, and this is a sound decision that sends an important message about our commitment to addressing the plague of gun violence in every possible way.” …”

According this post at GothamSchools, trustees are legally required to only invest or divest in shares that are in the best interest of the fund’s long-term health.  Given that the firearms industry is one of the few sectors of the economy doing well right now it must have been hard for Liu to say that with a straight face.

Interestingly, the vote to divest was not unanimous:

“… Raymond Sarola, a senior policy adviser in the mayor’s office of pensions and investments, said in a statement, “Pension decisions should rarely, if ever, be based on other criteria except what’s best for pensioners, which should benefit taxpayers, as well.” …”

He’s right.  It’s just really ironic that a guy who works for Mayor Mike is the one who said that.

Maybe Liu deserves the benefit of the doubt and we should take him at his word that he is really looking out for the pensioners best interests.  So, hows the rest of his investment strategy paying off?

“Comptroller John Liu has awarded $6 million in contracts to manage city pension funds to a firm under investigation by New York federal and state prosecutors over claims it ripped off millions from public-employee pension systems around the world, The Post has learned. Boston-based State Street Corp. has faced litigation from state governments in Washington and California, as well as the United Kingdom, dating back to 2009 — each alleging the company fraudulently overbilled their retirement funds during so-called “foreign exchange” trades. But that didn’t stop Liu from doing business with the company — his administration disclosed the contract in Friday’s public record …”

Well, maybe he’s just got a lot on his mind right now:

“When then-City Councilman John Liu won his landmark victory for city comptroller in 2009, his campaign celebration was electric, with the collective energy of hundreds of public workers who saw him as their new champion … But in the time since that halcyon night, some in labor might be in the market for a new champion. Liu is increasingly on the defensive since the arrest of his campaign treasurer, Jenny Hou, on campaign finance fraud charges more than a week ago …