06/27/2003
First "official" TIAA-CREF (TC) Coalition Update --mainly for TC
participants with an interest in social responsibility by TC

Hello TIAA-CREF (TC) reformers:
Thanks for showing interest in keeping up to date on the actions of our
coalition to promote social responsibility within TC. The group is
informally called "TIAA-CREF: Out of the Bad and into the Good" because we
want TC to seek out certain types of investments and divest from others.
We hope that once you hear about our interests and goals you will want to
become involved. We have done everything from gaining extensive media, to
organizing call-ins/ emailing to TC, to direct action, like demonstrations
at TC's national and local offices (the latter only after years of
resistance by TC to policies they since have adopted). Some of this has
been done by the coalition, some by coalition member groups.
We'll keep you informed via coalition updates. At the web site
(www.makeTIAA-CREFethical.org) read about the work of the coalition work
and its individual members. A few groups have provided links to their web
pages and opportunities to get involved. Several groups have had success
with TC and you can read about that. Some groups distribute their own
periodic updates (not a listserv). Ask them via contact information at the
web site.

So if you want to get started:
1. Take a look at the web site to learn more about the work at the
coalition lobbying TC.
2. Call (preferred) or email TC about the overall goals of the coalition
or specific demands (e.g.. divestment from UNOCAL)
3. Pass along the below coalition introduction message to colleagues
around the country, appropriate listserv, organizations, web sites,
etc. -- with a brief endorsement from yourself. We are relying on you
all to spread the word!

Let us know if you wish to become involved at a deeper level (planning
activities / actions, participating in actions such as demonstrations and
leafleting, or helping get media attention - see media talking points below
that we currently use at the national level. We are especially looking for
folks in a few US cities--San Francisco, DC, Pittsburgh, and Dallas-- to
participate in or even lead a small action relevant to this issue.

Talk to you in a month-- and hope to hear from you before that,
Neil

Neil Wollman
Coordinator Graduation Pledge Alliance
Senior Fellow Peace Studies Institute
Manchester College
nwollman@bentley.edu
260-982-5346

Subject: TIAA-CREF and socially responsible investment
Dear :
We are writing because you either have had some interest regarding
TIAA-CREF(TC) and socially responsible investing or you have a general
interest in corporate responsibility. Otherwise, we are sorry. Beyond your
particular TC concerns, we write to tell you about a coalition of national
advocacy groups that have been working to get TC to be more socially
conscious in their investments (areas of concern are sweatshop labor,
tobacco, World Bank Bonds, and human rights regarding Burma and Tibet). We
also want them to invest in social good (low-income area community
development and products enhancing environmental sustainability, e.g.).
Beyond better directing of TC's own massive assets ($260 billion), because
of its prominence in the investment world, changes TC makes will likely
affect other large institutional investors.
The coalition has carried out traditional lobbying (calls and emails) to
influence TC as well as protest actions when needed to gain attention.
While we can point to a few victories, coalition members feel that we would
have far more influence if we could communicate with TC shareholders to
provide periodic updates on campaign activities, as well as giving ways
that folks like you can become involved at some small or large level.
Certainly there will be no more than one report a month.
Please consider signing up for updates (write NJW@manchester.edu & put "TC
Coalition Update" in the subject line). Also, please do forward this
message to individual colleagues and listservs which are concerned with the
corporate responsibility movement and which might have participants in the
TC pension system. And check out www.maketiaa-crefethical.org, the
coalition listserv.
Thank you,
Neil Wollman, Ph.D.
Senior Fellow and Professor, Manchester College
for "TIAA-CREF: Out of the Bad and into the Good" (Free Burma Coalition,
Infact, Press for Change, World Bank Bonds Boycott, US Tibet Committee,
Students for a Free Tibet, International Tibet independence Movement,
Global sweatshop Coalition, and Social Choice for Social Change: Campaign
for a new TIAA-CREF)

Subject: TIAA-CREF inconsistencies on corporate governance and social
responsibility
Dear :
Here are examples of the type of inconsistencies and hypocrisy's practiced
by TIAA-CREF as regards to corporate governance and social responsibility.
I can go further into the below as you wish, and can respond to anything
they raise in response. We also have folks with specific expertise on the
issues we are below that we can put you in contact with. Plus there are
three particular TIAA-CREF trustees/directors who are on a committee
dealing specifically with governance and social responsibility issues. I
can put you in contact with them. And there is a mid-level TIAA-CREF
employee who is willing to talk to media about TIAA-CREF and
inconsistencies regarding socially responsibility in its investments. The
identity of the person needs to be kept out of the story, but you would
most certainly be able to determine that the person is indeed a TIAA-CREF
employee. Neil Wollman (contact information is at the bottom)

TIAA-CREF DOES NOT PRACTICE WHAT IT PREACHES:

I) TIAA-CREF claims to be and is seen as a leader in promoting corporate
governance reform and championing shareholder rights, yet

1) At its November 2002 annual meeting, it opposed its own shareholders'
resolutions on two important governance issues that good governance folks
support.
a) revealing of proxy votes
b) Chairman and CEO positions must be held by different people (The
Conference Board Commission on Public Trust and Private Enterprise
recommended such a split.)
(After attendees concerned about social responsibility issues persistently
raised serious questions at the 2001 annual meeting, the 2002 meeting was
held in a much less accessible city. This resulted in a much lowered
attendance. And in contrast to the past, almost no trustees were present
at the 2002 meeting. To their credit, they have now decided to return to
New York for their next meeting.) Several governance related resolutions
will be on the ballot for the next annual meeting and I have contact
information for several of the filers.
2) Eliminated an independent committee that nominated some trustees.
3) Supported a proposed SEC resolution making it harder for shareholders to
resubmit resolutions (public outcry resulted in not adopting the measure).
4) TIAA-CREF claims they take no government subsidies--and they shouldn't
as a large pension fund. However, they do admit to taking "financial
incentives," including an "incentive" of $1.17 million from "the
City and County of Denver."
5) Though a leader in reigning in excessive CEO salaries for their
portfolio companies, their recent former CEO John Biggs sat on the boards
of two companies that gave excessive CEO compensation (Biggs was on the
compensation committee for one board and apparently approved a high salary
for the other (we have details, including a St. Louis P-D expose on the
excessive compensation).
6) While filing a shareholder resolution, David Gordon, University of
Washington, received negative treatment from one of TIAA-CREF's top
governance people and chief counsel Peter Clapman.
7) Getting 30% and 35% of the vote on two resolutions they filed was
labeled as "very substantial" and a "large portion of shareholders, "
respectively, in two press releases they distributed. A resolution filed
against them that got 30% was labelled by their CEO as "soundly defeated."

 

II) TIAA-CREF says they factor social concerns into all investment
decisions and that doing so builds long term shareholder value, yet they
won't reveal how they do so (TIAA-CREF: A Concerned Investor). But they
also say that socially concerned participants have a choice and can invest
in their socially screened Social Choice Account. This is their response to
requests for divestment of certain stocks. But morality should not be
confined just to the individual investor. TIAA-CREF has a choice, too, in
what they invest in for all their funds. And
1) There was much attention given to the human rights situation in pre-war
Iraq, yet brutalities exist in other countries and situations in which
investment by TIAA-CREF lends support to such injustice. TIAA-CREF holds
shares in Nike-sweatshops; British Petroleum- destructive project with
China that helps subjugate Tibetans; Unocal-- helps keep afloat the Burmese
brutal dictatorship; Altria-Phillip Morris--- Marlboro is the deadly #1
cigarette brand; World Bank Bonds-
hurting many Third World citizens. TIAA-CREF's socially responsible fund
holds stock in Costco, which has engaged in ecological destruction and
caused the arrest of environmentalists and others in Mexico.
2) After an "offer" from their CEO in a New York Times article (January,
2002), we gained $17 million in pledges for a new socially responsible fund
that would include low-income area community development and other
"positive investing." Now TIAA-CREF is stonewalling on that (their most
recent excuse about filing a shareholder resolution is easily addressed).
CREF trustees Bevis Longstreth, Victor Santiago, and Robert Vishny can be
contacted to see why TIAA-CREF is again not listening to their shareholders
on this matter. This comes on the heals of two earlier campaigns to promote
social responsibility for TIAA-CREF's investing. After years of excuses,
certain desired changes were finally made.
3) After the Fall 2002 TIAA-CREF annual meeting, a TIAA-CREF officer
approached one participant about submitting a proposal concerning community
investment. The officer did so because of the participant's statements
during the meeting. The proposal was submitted but was never responded to.
4) TIAA-CREF invests in companies that follow practices inconsistent with
its own internal company ethics policies (details can be given).
5) T-C is of three minds regarding social responsibility. (a) "T-C does
not express approval or disapproval of any particular business activity or
company." They make only financial judgements. (b) T-C acknowledges certain
activity as being socially responsible (such as good environmental
practice). But they are desirable (only) because they add to long term
shareholder value. (c) Finally, they have supported social responsibility
for its inherent good. (e.g., they talk about their investing in companies
engaged in "socially beneficial activities." A benign interpretation of
these three faces on social responsibility is that they are just confused
on the issue or haven't thought out things as they should. A more likely
interpretation is that they pick and choose different interpretations for
their own self-interest.
6) See www.maketiaa-crefethical.org for details on the work of the
coalition of groups trying to get TIAA-CREF to be more socially responsible
in its investing.