FOR IMMEDIATE RELEASE: July 19, 2005

Contact: Professor Neil Wollman (for the Make TIAA-CREF Ethical coalition); 508-728-9885; 508-748-3734; nwollman@bentley.edu (backup July 19; Professor Blaise Tobia 267-235-5080)

AT TIAA-CREF ANNUAL MEETING, SHAREHOLDERS TELL PENSION GIANT TO PRACTICE WHAT IT PREACHES ON CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY

Inside the meeting, shareholders and advocacy groups press TIAA-CREF officers to explain several governance scandals in the past year and its investment in some socially irresponsible companies; demonstrators outside the building take their case to the public.

(NEW YORK CITY)—As corporate scandals continue to rock Wall Street, the nation’s largest pension fund is once again coming under fire from the Make TIAA-CREF Ethical coalition.* At the CREF annual shareholders’ meeting July 19, advocacy groups are joining shareholders to demand greater accountability from TIAA-CREF, the $350 billion pension fund for educators and researchers. As demonstrators picket outside TIAA-CREF headquarters with banners, placards, and costumes, shareholders will speak up inside the annual meeting. Two years ago, at an annual meeting also held in New York, TIAA-CREF Chair and CEO Herbert Allison was pounded by shareholders for his exorbitant salary. Now shareholders want to know why the self-proclaimed governance leader is itself coming under scrutiny. After SEC complaints, two trustees had to be removed because of financial conflicts of interest. Additionally, their CFO, now on a leave of absence, is under investigation by the SEC and DOJ for practices in her previous job. Finally, after doing an insufficient background check, they hired a criminal, resulting in a breech in security and a subsequent lack of candor about events surrounding her removal.

Says activist and coalition representative Jaime Lagunez, of frente civico por la defensa del Casino de la Selva, “For a group claming leadership in governance and social responsibility, they need to look in the mirror and recognize their own shortcomings in these areas. They need to be more vigilant in their own corporate governance and they need to divest from corporations involved in human rights violations and in public health, community, and environmental degradation. Instead they need to be investing in socially responsible ventures.”

The Make TIAA-CREF Ethical coalition points to contradictions between the company’s stated policies and its investments. TIAA-CREF’s Policy Statement on Corporate Governance states that “TIAA-CREF believes that building long-term shareholder value is consistent with directors giving careful consideration to issues of social responsibility and the common good. We recognize that efforts to promote good corporate citizenship may serve to enhance a company’s reputation and long-term economic performance.” The policy further states that companies should be concerned with "environmental impact...the corporation's communities and constituencies... deliberate and knowing exploitation of any non-shareholder constituencies... human rights... labor issues…” At the same time, notes the coalition, TIAA-CREF invests in:

- Nike and Wal-Mart–condemned for selling products produced by overseas
sweatshop labor
- Wal-Mart –widely criticized for its domestic labor practices, hurting local
businesses, and promoting urban sprawl
- Unocal–has business ventures with Burma’s brutal government
- Philip Morris/Altria–responsible for Marlboro, the leading cigarette brand among
youth
- Costco–promotes police brutality in Mexico and the destruction of its cultural
heritage and the environment
- Coke–markets nutritionally bad products to kids at home, tied to human rights
abuses and water shortages abroad
- (TIAA-CREF divested its harmful World Bank bonds and should state it will buy
no more.)

"Stockholders by definition are owners of a company and with ownership comes responsibility," says Corporate Campaign, Inc./Campaign to Stop Killer Coke director Ray Rogers. "I do not believe TIAA-CREF participants want to be associated with the tobacco industry or companies like Coca-Cola that are complicit in widespread human rights abuses including kidnapping, torture, and murder; fraudulent business practices and undermining the health and well-being of children worldwide."

The coalition asserts that TIAA-CREF must divest from these companies immediately or engage in transparent attempts to influence them to change their behaviors. It is calling for TIAA-CREF to set a deadline to divest from the companies if they do not make sufficient changes.

According to coalition group representative Neil Wollman, a professor at Manchester College in Indiana, TIAA-CREF’s claims that non-financial criteria cannot affect their financial decisions is inconsistent with their governance document. Wollman asks, "Would TIAA-CREF have invested in the production of Nazi gas chambers in World War II if it meant a healthy financial profit? TIAA-CREF must either agree that moral issues are relevant to investing, or they must admit that such investment is OK with them. It's time for TIAA-CREF to answer these kinds of questions to shareholders, stakeholders, and the media. Important moral concerns are at stake here."

According to Wollman, TIAA-CREF also reneged on promises made over a year ago that it would address the concerns of the Social Choice for Social Change campaign, a group in the coalition that is seeking investment in community development and other positive ventures. Wollman says that top TIAA-CREF officers engaged in dialogue with the group for a year, then rejected all but one request. He notes, "Where is the concern for shareholder voices that they proclaim? Where is the concern for social and corporate responsibility they profess? How can one take seriously their tag line, ‘Financial Services for the Greater Good’?”

Howard Zinn, a noted historian, says, “I hope that more and more people will insist that TIAA-CREF funds be invested in socially responsible ways.” University of Pittsburgh Professor Dennis Brutus, the anti-apartheid campaigner who spent time in prison with Nelson Mandela for opposing apartheid in South Africa, says, “Not only interest, but the interests of the people must be borne in mind when making sound and moral decisions.”

See http://www.maketiaa-crefethical.org/ for further information on the work of the Make TIAA-CREF ethical Coalition and see http://www.maketiaa-crefethical.org/organizations.html for information about the groups in the coalition.

** The US Campaign for Burma * Corporate Accountability International (formerly Infact)* World Bank Bonds Boycott * Press for Change * Social Choice for Social Change * Canadian Committee To Combat Crimes Against Humanity (CCCCH) * Citizens Coalition (Frente Civico)* Educating for Justice * National Community Reinvestment Coalition * National Congress for Community Economic Development* Campaign to Stop Killer Coke/Corporate Campaign, Inc.* Campaign for a Commercial-Free Childhood* Sprawl Busters