FOR IMMEDIATE RELEASE: July 18, 2006

Contact: Professor Neil Wollman (for the Make TIAA-CREF Ethical coalition):
508-728-9885; 508-748-3734; nwollman@bentley.edu; (backup on July 18 only: Professor Blaise Tobia: 267-235-5080); www.makeTIAA-CREFethical.org

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 about governance scandals in the past few years and investment in socially irresponsible companies; demonstrators outside the building; speak to the public.

(NEW YORK CITY)—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 18, advocacy groups are joining shareholders to demand greater accountability from TIAA-CREF, the $400 billion fund for college personnel. As demonstrators picket outside TIAA-CREF headquarters, shareholders will speak up inside the annual meeting. Three years ago, TIAA-CREF CEO Herbert Allison was pounded by shareholders for his exorbitant salary. Now shareholders want to know why this governance leader is itself coming under scrutiny. Here are but three examples:
• After SEC complaints, two of its trustees had to be removed because of financial conflicts of interest. Yet TIAA-CREF tells others about the need for independent trustees.
• It advocates strongly to others to keep CEO compensation in line. Yet it gave its own CEO Herbert Allison a pay package way out of line for a non-profit serving low-paid college professors and other college personnel.
• After doing an insufficient background check, they hired a criminal, resulting in a breech in security and later lack of candor about events surrounding the breech and her removal. And now, under the SARBOX Whistleblowers act, the previous boss of the criminal filed against TIAA-CREF for his dismissal and being targeted as a scapegoat.

DOES THIS SOUND RIGHT FOR A GROUP PREACHING GOOD CORPORATE GOVERRNANCE TO OTHERS?

WHAT ARE WE TO MAKE OF THE FACT THAT TIAA-CREF INVESTS IN COMPANIES WITH REPREHENSIBLE RECORDS WHILE CLAIMING THAT IT PROVIDES “FINANCIAL SERVICES FOR THE GREATER GOOD” AND IS “MINDFUL OF ITS SOCIAL RESPONSIBILITIES”?

There are contradictions between TIAA-CREF’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 (environmental impact . . . the corporation’s communities and 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
Chevron–maintains business ventures with Burma’s brutal government, charged with contaminating the Amazon and destroying indigenous cultures in Ecuador
Philip Morris/Altria–responsible for Marlboro, the leading cigarette for youth
Costco–promotes police brutality in Mexico and the destruction of its cultural heritage and the environment
Coke–markets nutritionally harmful products to kids at home, tied to human rights abuses and water shortages abroad
(TIAA-CREF did divest from harmful World Bank bonds; it should pledge “no more”)

WE SAY TO TIAA-CREF: “REFORM THEM OR DUMP THEM.” USE YOUR SHAREHOLDER POWER TO INFLUENCE THESE COMPANIES—OR DIVEST FROM THEIR STOCK.

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. They need to deal with corporations in their portfolios involved in human rights violations and environmental degradation. They should be investing in community development and social venture capital in their socially responsible fund and beyond.”

“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.”

According to coalition group representative Neil Wollman, a professor at Manchester College in Indiana, TIAA-CREF claims that outside of their socially responsible fund, they cannot use non-financial criteria in their financial decisions. Yet, 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? It’s time for TIAA-CREF to answer that kind of question. Wollman also says that their CEO reneged on promises made two years ago concerning community investment in their socially responsible fund.

* The Make TIAA-CREF Ethical coalition includes: 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, and Sprawl-Busters.