In his first major announcement since taking office, State Treasurer Shawn Wooden declared his intention to divest $30 million of state pension fund assets from five companies involved in gun manufacturing and distribution. Unfortunately, this decision demonstrated dangerous overreach at the expense of public pension fund beneficiaries and Connecticut’s economic well-being.
A quick review of the public filings for the five companies whose securities are slated for sale by the state reveals that two, Northrop Grumman and Daicel, have no apparent connection with the manufacture or distribution of civilian weapons.
Northrop Grumman is an aerospace and defense technology giant that produces missiles, missile defense systems, aircraft and drones that are vital to U.S. national defense. Daicel is a Japanese specialty chemical company focused on plastics, polymers and resin compounds used in applications such as automotive airbag inflators and water treatment systems.
From the perspective of pension fund beneficiaries, Daicel might be a logical stock to sell, as it has produced a subpar return for shareholders in the last few years. This is not the case with Northrup Grumman, however, which has produced a return well in excess of the overall stock market in 2019.
Furthermore, Treasurer Wooden has put jobs in Connecticut at risk for a few headlines, as defense contracting is one of Connecticut’s most vital industries. It is hard to imagine that the Treasurer’s decision to dump these stocks will be well received by General Dynamics (Electric Boat), Lockheed Martin (Sikorsky) or United Technologies (Pratt and Whitney). Wooden’s decision is nothing but politics, and sends a dangerous message to other defense contractors that Connecticut is not a good place to do business.
Anti-gun advocates who applauded the Treasurer’s decision should also ask what Wooden is doing about taxpayer-subsidized loans to two businesses directly involved in the sale of weapons and ammunition, Cabela’s in East Hartford and Bass Pro Sports in Bridgeport.
Connecticut Innovations, on which Wooden serves as a board member, proposed a $22 million financing for the construction of a 140,000 square-foot Bass Pro Sports Bridgeport outlet in 2013. A quick review of Connecticut Innovations’ 2019 board meeting minutes shows no mention that the Treasurer’s office expressed any concern about that financing. In the case of taxpayer-subsidized loans to Cabela’s and Bass Pro Sports, Wooden appears to have looked the other way.
While Gov.Ned Lamont applauded Treasurer Wooden for enacting a “first-of-its-kind, comprehensive, responsible gun policy,” the facts clearly show overreach to win political applause. The Treasurer’s gun policy is neither a shiny ornament to hang on the Christmas tree of economic development, nor an example of how to best protect the interests of Connecticut’s long-suffering taxpayers and public pension fund beneficiaries.
Thad Gray of Salisbury was the Republican nominee for State Treasurer in 2018.
I couldn’t agree more. This is clearly a PR move that has nothing to do with sound financial management of the states assets- the Treasurer’s real job.
Have you seen the advertisements for the new state bond issue? Guess whose picture is all over those ads?
Isn’t one party rule grand?
You have hit the proverbial nail on the head. Wooden’s move is not investment strategy, it is pure political nonsense. That’s not what he was elected to do. The Treasurer’s role is to make fiscally responsible investments — responsible to state employees/retirees AND the taxpayers — not to “send a message” to corporations.
Northrup Grumman is a large producer of medium and small caliber ammunition: “Northrop Grumman Small Caliber Systems is the largest manufacturer of small caliber ammunition for the U.S Department of Defense. During the last five years, the company manufactured more than eight billion rounds of small-caliber ammunition for the U.S. military and other customers.” NG’s website photos show this ammunition being carried by soldiers. Presumably those intent on mass shooting of civilians can kill with Northrup Grumman’s cartridges. Of course when it comes to mass killing of civilians, the Pentagon is number 1.
And where on NG’s web site does it state that their ammunition reaches the average consumer market? Seems to me it’s limited to the military and NATO.
I’m with Meg Nutter – this is more of a PR stunt than a wise investment strategy.
So again I ask, when is the state going to divest is shares in automotive manufacturers? When is the state going to divest its shares of the bid pharma? When is the state going to divest it shares of hedge fund companies? All three of these entities have killed many people directly or indirectly. They have killed many more than any gun has but gun “legislation” sounds better. By the way guns do not kill people. Guns are an inanimate object and when used by sick people they get the bad rap.
I am in favor of gun reform but this is not the way to get it. The Treasurer should be about money management and only that. This purely political announcement of divestment BEFORE any selling may in fact depress the price of gun shares and the fund will take an unnecessary hit if and when these shares are sold. That would be really stupid.
Agree with Mr Gray. Although socially responsible investing has become more popular with younger investors, it remains that limiting investment options must sacrifice potential investment returns. What is especially troubling about Mr Wooden’s divestment announcement is that as CT Treasurer, he is the principal fiduciary for the over 200,000 State pension plan participants and beneficiaries. Very disappointing.