URGE PENSION GIANT TIAA-CREF

TO INVEST MORE RESPONSIBLY---

JULY 18 ANNUAL SHAREHOLDER MEETING,

YOU CAN PROMOTE ETHICAL INVESTMENT AND INFLUENCE HOW $400 BILLION IS SPENT

For TIAA-CREF participants: Raise your voice inside the annual meeting in New York City, July 18

For participants and sympathetic others: Demonstrate outside the corporate office in New York

If you can’t be there: Call or email the CEO of TIAA-CREF (see below)

For all: Please forward this message widely

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We call for TIAA-CREF to:

► use its shareholder power to influence the corporate behavior of Wal-Mart, Coke, Costco, Nike, Chevron, and Philip Morris/Altria (see below)

► pledge not to buy World Bank bonds because of their effects on Third-World citizens.


► invest in social change ventures for the Social Choice Account (such as in low-income are housing and start-up companies promoting environmental protection)

► clean up its own corporate failings (e.g., removing two trustees, as recommended by the SEC, because of conflicts of interest) (see below)


MAKE YOUR PLANS NOW: Meeting begins 9:00 a.m., Tuesday, July 18 (participants call 1-877-535-3910, ext. 2440 for a pass to attend). Demonstration runs 8-9:30 AM; 730 Third Ave. (between 45th and 46th Streets).

MARK YOUR CALENDAR NOW: Calls and emails: Anyone can raise a voice from their hometown during the week before the meeting (July 10-18). Call CEO Herbert Allison at 800-842-2733 or 212-490-9000. Ask for Mr. Allison and speak to his assistant. Calls are best, but you can also email HAllison@tiaa-cref.org For background, see below or www.makeTIAA-CREFethical.org (and sign-up at web site for campaign updates). For further details, contact nwollman@bentley.edu

“Make TIAA-CREF Ethical” 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

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                                                                           Summary of the Issues

The nation’s largest pension system, TIAA-CREF, a retirement fund mainly for educators, prides itself on responsiveness to shareholders and being a “concerned investor” regarding social responsibility. Its "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…Efforts to promote good corporate citizenship may serve to enhance a company’s reputation and long-term economic performance…” It specifically notes environmental impact, labor practices, human rights, and the common good of a corporation’s communities. In one ad it notes "…our approach to investing goes beyond sound portfolio management. We are mindful of our social responsibilities…" And their tagline reads, "Financial Services for the Greater Good."

And yet, despite these statements:
· TIAA-CREF holds shares in corporations such as
Costco – promotes police abuse and the destruction of cultural heritage and the environment
Nike and Wal-Mart – condemned for selling products produced by overseas sweatshop labor
Wal-Mart – maintains bad domestic labor practices, hurts local business, and promotes urban sprawl
Chevron – runs business ventures with Burma’s government that help support that brutal regime
Philip Morris/Altria – promotes Marlboro, the #1 deadly cigarette brand among youth
Coke – markets nutritionally deficient products to kids at home and is 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.
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Corporate Failings

It opposed three "good governance" resolutions on the ballot for the 2003 annual meeting (e.g., one urged TIAA-CREF to adopt the recommendations of the Conference Board blue ribbon commission on promoting good corporate governance).

It eliminated an independent committee that nominated some trustees who subsequently acted too independently..

It supported a proposed SEC resolution making it harder for shareholders to resubmit resolutions (the proposal was scrapped after public outcry).
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 that mainly serves low-paid college professors and other college personnel.
It had to remove two of its board members in November 2004 after the SEC voiced strong concerns about their lack of independence in financial transactions.
It suffered two scandals in 2005: after an insufficient background check, hiring a criminal and subsequent breach of security for participants and associated apparent deception by TIAA-CREF (and now, under the SARBOX Whistleblowers act, the previous boss of the hired criminal is filing against TIAA-CREF for having been fired); having its CFO investigated by the SEC and DOJ for alleged financial conspiracy—and then later being indicted (from her previous job a few years before).
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A New York Times article published after a previous TIAA-CREF annual meeting in New York.



A Plea to Invest in What's Good

by Joseph B. Treaster

December 16, 2003

Copyright 2003 The New York Times Company



At the annual meeting yesterday of the largest investment organization catering to university and college faculties and staff, investors raised questions about the chief executive's pay and urged greater emphasis on selecting stocks according to the social and moral character of corporations.

Some of those attending the meeting in New York of the College Retirement Equities Fund, part of TIAA-CREF, the pension fund giant, complained about the poor performance of their pension and retirement plans during the last three years of depressed markets. But a message echoed repeatedly was that here was a group of investors who would accept a little less profit in exchange for making the world a little better.

"It's not only important how much income you get, but how you get it," said Donald W. Shriver, a former president of Union Theological Seminary in Manhattan.

Herbert M. Allison Jr., who joined TIAA-CREF as chief executive last fall after stepping down as president of Merrill Lynch, said, "We are mindful of the social issues." He added that the company tried to balance social concerns with its legal obligation to do its best to provide financial security and earnings for its more than 3.2 million investors.

But both Mr. Allison and Martin L. Leibowitz, the chief investment officer, indicated that the company's long-held, relatively conservative policy of investing in stock indexes, or baskets of stocks, meant that it would inevitably put money into companies that sell harmful products like cigarettes or that have been accused of abusive labor practices. Investors in an index, by definition, give up the freedom to pick and choose.

CREF already offers one of the largest funds that invests only in corporations that meet certain social criteria. But of the roughly $300 billion of TIAA-CREF's assets invested on behalf of clients, only about $5 billion is in its "social choice" fund.

The investors, many of them identifying themselves as Ph.D.'s as they rose to speak, seemed pleased at several changes that Mr. Allison announced in the company's corporate governance. For the first time, an independent trustee, not employed by the company, is to become chairman of the board of trustees, he said, and terms of the eight trustees will be reduced to one year from four years, which means that all will stand for election annually. As of today, the chairman will be Martin J. Gruber, a finance professor at the Stern School of Business at New York University.

Mr. Allison's $8 million in salary and bonuses, which the company disclosed early last month, is nearly 50 percent more than his predecessor was paid. For some investors, the pay increase contrasted painfully with Mr. Allison's earlier announcement that he was laying off 500 employees.

James W. Keady, the founding director of Educating for Justice, a nonprofit organization that advocates social awareness for high school and college students, calculated that even without the roughly $4 million Mr. Allison was expected to receive in bonuses for long-term performance, he was being paid more than $10,000 a day. "If you have more money than you need," Mr. Keady said, quoting Gandhi, "you're stealing from somebody."

The roughly 150 investors at the meeting, more than double last year's turnout, broke into applause. Mr. Allison then turned the floor over to Ronald L. Thompson, the chief executive of a Midwest manufacturing company and chairman of the committee that conducted the chief executive search. Mr. Thompson said that the company had been in competition with "many large, aggressive organizations" to hire Mr. Allison, and that the compensation had to be competitive.

Throughout the meeting, Mr. Allison stood at a lectern at the front of the auditorium, listening more than talking. He remained calm, and so did most of the investors.

"We were very pleased with the meeting," said Steven Goldstein, a spokesman for TIAA-CREF.

The investors left in good spirits, too. "This is the most welcoming situation I've ever walked into," Mr. Keady told Mr. Allison and the others as the meeting ended.

He was speaking from experience at many conferences on corporate responsibility. "The atmosphere was much more open than I've found at other meetings," Mr. Keady said later.