Financial Markets

Unions know they are steadily becoming extinct in the USA . . .  they were needed a century ago  . .  much less so today. In a powerplay to organise another group of workers, the Service Employees International Union(SEIU), with their puppet Assemblyman Albert Torrico(D-Newark, CA) bumped up against Calpers, CalSTRS and Gov Arnold Schwarzenegger  . . . .  and lost ! The Assembly Bill (AB 1967: Responsible Private Equity Investment Act of 2008)  would have prevented the Sovereign Wealth Funds from investing in private-equity firms partly owned by foreign governments with poor human-rights records.

Officials at the California Public Employees’ Retirement System and the California State Teachers’ Retirement System had said the bill would have cost them billions of dollars in lost investment opportunities. On Wednesday, the governor announced his opposition in an opinion piece in the Los Angeles Times.

The bill was sponsored by the powerful Service Employees International Union, and critics said AB 1967 wasn’t really about human rights. Rather, they said it was meant to help the SEIU in its struggle to organize employees of a nursing home chain owned by the private-equity firm Carlyle Group.

CalPERS and CalSTRS are Carlyle investors. So is Abu Dhabi, a member of the United Arab Emirates, which was specifically mentioned in the text of AB 1967. The emirates’ human-rights record has been labeled poor by the U.S. State Department.

The bill “was a cynical effort to play fast and loose with the pensions of 2 million public employees to advance a single-minded organizing campaign,” said the Private Equity Council, a Washington lobbying group.

Jack Ehnes, the chief executive of CalSTRS, called the bill “a direct attack on the highest-performing investments we have.”

Read more here.