There is an interesting proposal in California where legislators are moving to punishing any companies who work with the federal government in the construction of the wall pledged by President Donald Trump between the United States and Mexico. The bill would force pension funds to divest from participating companies. It is a bill that would significantly raise the level of conflict between the Trump Administration and certain states. The Trump Administration is already moving to withdraw grants from cities and states barring assistance to federal immigration officials. To now have states retaliate against companies for simply contracting with the federal government would push the already bad situation to Def Con 1 over federal/state conflict. There is no way that the federal government could sit ideally by as states retaliated against federal contractors.
Assembly Bill 946 would require the California Public Employee Retirement System and the California State Teachers Retirement System to liquidate investments in any company involved with the wall’s construction within a year. It would also require the pension-fund management to report a list of those companies to the Legislature. With assets of f $312 billion and $202 billion, respectively, these are the countries two largest pension funds and could hit some companies hard.
The proposal is being introduced by Assemblyman Phil Ting, D-San Francisco and Lorena Gonzalez Fletcher, D-San Diego, and Eduardo Garcia, D-Coachella.
Notably, these funds have been down recently and such restrictions imposed by politicians could drive down value for the pension funds. This money belongs ultimately to the workers who entrust the assets with an understanding that the funds will be maintained and maximized. If politicians can create lists of barred investments, the pension funds will become extensions of politics rather than funds geared toward the protection of value for employees. More importantly, the move would likely trigger demands for broader denial of federal funds to California.
77 thoughts on “California Legislators Move To Punish Companies Working On Border Wall”
Why is this controversial? There is nothing inappropriate about a state’s decision to direct its investments to companies or industries which reflect what it considers to be sound public policy. This decision, should it be implemented, is of a piece with a decision to withdraw investments in fossil fuel companies.
Mike Appleton – I think you missed the part where they were going to punish the companies that bid on the project. That is not within public policy.
Correct. Not only is it not in public policy but it isn’t financially reasonable.
I wonder if a case could be made that failing to invest in such companies for personal vindictive reasons is a failure of their fiduciary duty to make best investments they can
Mike, the fiduciary duty of the fund manager is to strike a balance between security of principal and yields. but always to be able to meet obligations. As long as a company isn’t up to something perfectly gruesome, making use of investment funds for purposes of status-signaling is in violation of one;’s duties.
And pick better causes. Complaints against law enforcement or oil companies are vapid.
Build the wall. Pause immigration. No one has a “right” to be here illegally.
Build the wall, and sponsor various artist contents to give young artists the opportunity to paint beautiful murals, plus create guarded wildlife corridors or green bridges where needed. Win Win.
TIN – there is NO wildlife south of the border that I want coming north of the border. As John McCain said when he was running for President, “Build the damn wall.”
Paul – so you’re opposed to both the two-legged and the four-legged Mexican coyote? How intolerant! 😆😆
TIN – I am not a fan of the Mexican wolf either. 😉
Good idea! Because the Great Wall of China was so effective…Those who forget history are doomed to repeat it…
Mark M. – the Great Wall of China is actually many walls, some more effective than the others. 🙂
Seriously? You can’t glean the difference between the purpose of the two walls? Of the histories of countries involved? Isn’t Hadrians’s wall a better example, if at all?
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