Saturday, July 14, 2007

Just whose list are we using? Your list, their list, my list, his list? ??? ....

Lawmaker Questions SEC "Terrorist" Investor List
By Kevin Drawbaugh and John Poirier
Reuters, Friday 13 July 2007
Washington - A senior Democratic lawmaker urged the Securities and Exchange Commission on Friday to either create a more accurate Web site identifying corporations with investments in "terrorist-financing states" or pull the plug on it.
Rep. Barney Frank, chairman of the House Financial Services Committee, expressed concern about how the list was compiled and asked the SEC to consider using a new methodology.
"Disclosure is important, but in this instance it is my belief the disclosure needs to be absolutely accurate or not occur at all," Frank said in a letter to SEC Chairman Christopher Cox.
Some business and humanitarian groups say the SEC's new online tool is ill-conceived.
The Web site allows investors to search for companies whose annual reports contain some reference to business related to Sudan, Syria, North Korea, Iran and Cuba. The countries have been designated as "state sponsors of terrorism" by the U.S. State Department.
The Institute of International Bankers says the SEC's search tool unfairly portrays a number of internationally-headquartered financial firms in a misleading, negative light and was compiled without regard to the materiality of their dealings.
In his letter, Frank said at least one company on the list had divested its holdings in the countries.
"Others apparently have investments that are so negligible they could not reasonably be considered material either to investors or the economy of the terrorist-financing state."
Frank said he recognized the SEC's "good intentions," but "the concept of a list generated in this fashion strikes me as unfair and perhaps counterproductive."
An SEC spokesman declined to comment.
In May, Frank's committee approved legislation aimed at discouraging investment in Iran by directing the Treasury Department to publicly disclose companies active in Iran's energy sector.
The bill, called the Iran Sanctions Enabling Act, would require Treasury to identify a company with business amounting to $20 million or more. The biannual list would require a description of the investment, and include an appeals process for companies to seek to remove their names from the list.
A similar bill has been introduced in the U.S. Senate, backed by Illinois Democrat and U.S. presidential candidate, Sen. Barack Obama.
The SEC's Web tool to search for companies with business in Syria, Sudan, North Korea, Iran and Cuba is at
(Thanks to June Hughes for this article)

Missouri Treasurer: Show Me You're Anti-Terror

From John Curry, July 14, 2007
Remember Rep. Mandel mentioning the Missouri divestment...well, check this out!
Business In The Beltway
Missouri Treasurer: Show Me You're Anti-Terror
Matthew Swibel, 07.12.06
WASHINGTON, D.C. - Local pols love to use their control of pension and investment funds to score political points and weigh in on the big issues. Boycott this. Invest in that. Now, Missouri State Treasurer Sarah Steelman, a Republican, is using the technique to wage her own war on terror. Her crusade should prompt some nail-biting from corporate interests worried about the interference of shareholder activism in a global marketplace.
By August, a $24 million portfolio within the Missouri Investment Trust--a state fund that taxes entertainers and athletes' income and makes earnings from investment of such monies available to state cultural organizations--will adopt an anti-terrorism screen developed by Conflict Securities Advisory Group (CSAG), an investment research firm in Washington, D.C.
Specifically, State Street Global Advisors will manage the enhanced index of its international large-cap Alpha Select Fund of about 125 stocks, with CSAG as a subcontractor providing a list of stocks with "global security risk"--that's federal regulator speak for terrorist-related risks.
Since taking office in 2004, Steelman has made no secret of her distaste for investments with any possible terror link. She made a ruckus over the Missouri State Employees Retirement System owning shares of France's BNP Paribas, which was involved in the Iraqi oil-for-food scandal and development loans in Iran, and of Arab Bank, which has been sanctioned by the U.S. Treasury Department for financial involvement with terrorist groups. As a result, those holdings have been reduced or eliminated, her office says.
The retirement plan has more than $6 billion in assets. But Steelman has complained that it has $20 million in foreign companies with direct ties to Iran.
Steelman has a higher standard on this than the U.S. Securities and Exchange Commission, which doesn't require companies trading on U.S. markets to disclose the level of investments and operations in countries considered terrorist hubs. The SEC does have an Office of Global Security Risk, created by Congress as part of the 2003 SEC budget bill. The office monitors voluntary disclosure of activities in countries linked to terrorism and human-rights abuses. It's hardly a large operation--it is now fully staffed with one supervisor, three attorneys and a research specialist.
"My main objective was to make sure we are not using public dollars to fund terrorists," Steelman says. "I don't view it as setting foreign policy."
And maybe it isn't. But these moves arguably amount to effective sanctions--a dicey area of the law that has created a dustup between a prominent business trade group and Missouri's neighbor, the State of Illinois.
Later this month, the National Foreign Trade Council, based in Washington, D.C., is expected to file a lawsuit in federal court in Chicago challenging the constitutionality of a 2005 Illinois law barring public pension funds from investing in companies doing business with the Sudanese government--deemed by the U.S. State Department as a sponsor of terrorism.
Arizona, Connecticut, Louisiana, New Jersey and Oregon have followed Illinois' lead on Sudan, and similar laws are pending in 18 other states.
The NTFC finds this case equally as strong as the one it brought against a Massachusetts law blackballing Burma. In that case, the U.S. Supreme Court ruled unanimously in favor of NTFC and held that states are preempted under the Supremacy Clause of the Constitution from acting where Congress and the president have already addressed the question of sanctions. (The Clinton administration began restricting the flow of most goods to and from Sudan in 1997. President George W. Bush has extended sanctions through November 2006.)
Even the investor activists don't all agree on what level of meddling is appropriate. The California Public Employees' Retirement System (CalPERS), a case study of shareholder activism, opposes a Sudan divestment bill in California because it would limit the CalPERS board's authority to make investment decisions. It also worries that the transaction cost of divestment would be $1.9 million per year, and that annual administrative costs would run up to $150,000, according to a June 19 internal CalPERS memo.
A further knot: "Terror-free" investing isn't quite so cut-and-dry.
For example, the Missouri Investment Trust currently owns shares of UBS through a European Index. UBS routinely gets red-flagged by terrorist watchdog CSAG because of the company's financial services activities in Iran.
So will Missouri dump it? Not necessarily, says Mark Mathers, director of investments for the Missouri Investment Trust. First, he'll wait to see if public statements from UBS sufficiently illustrate an intent to vacate Iran--and weigh the data and counsel he gets from CSAG, which collects a $10,000 annual fee for its role.

Jim N. Reed's message to Ohio General Assembly: "I would strongly encourage you to divest yourself of this kind of lawmaking"

Why did Ohio lawmakers decide to pick on retirees?
Columbus Dispatch, July 14, 2007
I do not know how many lawmakers in the General Assembly have educators in their families, but I would hope they have all researched carefully and intelligently their reaction to the current legislation that is misaimed at retirees in Ohio's five public-pension systems.
A bill to make sacrificial patriots out of these retirees is so misguided that it actually should be an embarrassment to a majority of Ohio's lawmakers, regardless of political party. As constituents, we public servants are counting on our representatives and senators to have the vision to see through this fiasco that is putting the fiduciary responsibility of the State Teachers Retirement System Board (as well as the other four boards) in jeopardy. Ohio Revised Code 3307.15 is crystal clear, much clearer than the fuzzy vision of some legislators who see hundreds of thousands of Ohio's public servants, active and retired, as cherry-picking targets for wrong-headed, ill-defined patriotism.
The original House Bill 151 was so foolishly, haphazardly and hastily designed that it was shameful. Companies that employ tens of thousands of hard-working Ohioans were black-listed. Cleveland has been recruiting Rolls Royce to bring employment opportunity to an economically depressed area, and then rookie members and the House Speaker accused Rolls Royce of being accomplices of the terrorists in Iran.
Private investors, including sponsors of the misguided legislation, were not required to divest their portfolios. Other private American investors, including governors, lawmakers and presidents were not ordered to practice divestiture; only Ohio's retired public servants, many of whom already are caught in the crossfire of rising health-care costs, stagnant cost-of-living adjustments, corporate greed and mismanagement within their own retirement systems, received marching orders to divest, costing them millions of dollars.
House Bill 152, meanwhile, sucks the lifeblood from current and retired educators. Once again, it appears private investment vultures practicing predatory capitalism are sitting on the side of the road ready to take advantage of the roadkill resulting from the slaying of the "defined benefit" policy of STRS.
This once-proud, prestigious retirement system has been the victim of scavengers before and cannot afford to be picked clean by ill-conceived legislation while it is laboring through a Renaissance under the leadership of Dennis Leone and John Lazares.
It seems that retired public servants are currently under siege within the General Assembly by some legislators who are out of touch with the mounting concerns accumulating upon the backs of many who seem to have become political pawns in a contest they did not conjure.
I ask our honorable and wise General Assembly members to consider carefully and judiciously the damage and hostility that this model of legislation can bring to the retirement lives of many of Ohio's loyal public servants. I would also strongly encourage you to divest yourself of this kind of lawmaking.

Friday, July 13, 2007

Tom Curtis and Board member Cervantes re: Webcasting

From Tom Curtis, July 13, 2007
Subject: RE: 062807 Curtis To Board Members, Webcasting Of All STRS Bd Mtgs
Hello Mary Ann,
Thank you for responding. You were the only board member to do so. The message never changes, ignore them and they will eventually stop writing and/or go away. That is just plain wrong!
Unfortunately, there lies one of the problems with the STRS board. Few have the inclination or will take the time to respond to those they are sent there to represent, especially if we have a difference of opinion. All of you board members know this to be true, but lack the will to change. Obviously, there are no consequences for your inaction.
Retirees that have voiced their strong opinions are simply written off as malcontents, as Joe Endry termed us. Dennis and John started out as malcontents and have been treated as such ever since 2003.
Mary Ann, I will ask you again, do you feel these two bring up issues for reasons other then for the accountability of everyone on the board and for the membership?
In the end, each board members' concern about the issue of web-casting board meetings will be about how transparent they feel they would have to be, if this were to occur. It seldom seems to be about what the members want or need. If I am wrong about this statement, please correct me.
Millions can be spent by the staff for whatever they want or feel they need. Those expenditures have often been termed as simply a drop in the bucket compared to the total worth of the STRS. However, when retirees ask for their money to be spent on something they desire, those that do so are just a few malcontents.
The apathy among the membership of the STRS is absolutely shameful, in my opinion. Glaring misspending has been identified, yet no one is held accountable for doing such. Not many retirees want to get involved. Apparently, most are so comfortable that they do not bother to concern themselves with the situation at hand.
Members will ultimately get what they deserve for not paying attention to what transpires at the STRS. Board members can go to all of the seminars and conferences he/she can get permission and expenses paid to go to, but the real need for most is often simple common sense knowledge and that does not fair well with many on the board. If you or any other board member takes issue by that statement, then explain to me why so many of you hit the easy button and simply vote as Damon wishes you to do. Don't any of you that vote in this manner get it?
I did appreciate talking with you recently by phone. However, we did not discuss anything that was in my email that precipitated that conversation. My main concern is why so few of you give Dennis Leone and John Lazarus so little respect. As I have stated to you and other board members before, those two are the most qualified on the board to assess the practicality of much of the business at hand. They have been made out to be the bad boys and are treated as such by most all of you. I am at a loss to understand how so many of you can vote as Damon desires and not with the people on the board calling for accountability.
And so the rubber stamping goes on...............
Disgusted in North Canton, Tom Curtis
From Mary Ann Flannagan/Cervantes, July 1, 2007
Subject: RE: 062807 Curtis To Board Members, Webcasting Of All STRS Bd Mtgs
Hi Tom,
I received your message on the webcasting. As of this date I have not received any recent updates on the issue of whether to video or not.
I see definite benefits but want to understand all implications before I vote.
I definitely appreciate your email of this issue. Have a good summer.
Mary Ann
Tom Curtis to STRS Board members, June 27, 2007
Subject: 062807 Curtis To Board Members, Webcasting Of All STRS Bd Mtgs
Hello Board Members,
As an STRS disability retiree with 27 years of service, I am writing you to offer in my support of webcasting all board meetings in the future.
I would greatly appreciate and utilize that option. I am positive many other retirees would like that option as well, once they know it is available.
The STRS has stated that the majority of the membership receive most, if not all of their knowledge about the operation of the STRS from the STRS Newsletter. That is barely a snippet of what goes on at the STRS. Newsletter articles often only present the positive side of an important issue or change in procedure, without offering the side affects.
Without attending the meetings in Columbus, or sending for a CD of the meetings, no STRS member can gain a true understanding of the business the board enters into each month. (I have been told that the quality of the CD is excellent.)
I live in Northeastern Ohio. I have driven to Columbus to attend in excess of 30 board meetings since 2003. I find it both cost and time prohibitive to do so today. Invariably, topics and issues I would like to listen too were not on the agenda the day I attended, which was usually Thursdays.
John D. Stanford, J.D., Ph.D., Executive Assistant for Education Policy, Office of Governor Ted Strickland wrote this to another retiree, "This directive to state agencies under the Governor's control does not apply to STRS. But, as an independent quasi-state agency, it is understandable that they would want to be within the spirit of the order by considering this policy option for the governance and management of the organization."
May I please ask for your vote in favor of web-casting the board meetings?
Thank you for your time and attention to this issue.
Thomas Curtis

New Expanded Homestead Exemption

July 13, 2007
Property Tax Relief for Senior Citizens and the Disabled
The Ohio General Assembly has enacted a new, expanded Homestead Exemption that will provide additional property tax relief to qualified senior citizens and permanently and totally disabled Ohioans.
Previously, most senior citizens and disabled Ohioans were excluded from the Homestead Exemption because of income tests. The new exemption offers eligible homeowners, regardless of income, the opportunity to shield up to $25,000 of the market value of their homestead (the dwelling and up to one acre of land) from property taxation.
The catch? Seniors and disabled Ohioans who weren’t previously eligible must apply with their local county auditor by Oct. 1, 2007 in order to take advantage of the Homestead Exemption, which will save the typical homeowner about $400 per year.
The new Homestead Exemption is available to all homeowners 65 and older and all totally and permanently disabled homeowners. For more details, including an application form and answers to frequently-asked questions, click here.

Thursday, July 12, 2007

School "Choice" / Hotel "Choice"

From RH Jones, July 12, 2007
Subject: School "Choice" / Hotel "Choice"
To all:
Here is the Page A10, Akron Beacon Journal, "Letter to the Editor" by Mark Wisberger that I referred to yesterday, 07/11/07:
Brennan only values choice some of the time
Is it just me, or does anyone else see the irony in David Brennan's statement, referring to the closing of the Crowne Plaza (``Officials worry over loss of hotel,'' Beacon Journal, June 19), his only rival in downtown lodgings, that ``we should be able to easily accommodate whatever market need there is.'' For someone who has made millions on the concept of choice when it comes to public schools, he suddenly has no problem with a monopoly.
Maybe people would like to have a choice of hotels when they come to town.
The Akron Public Schools and all the other public districts could also "easily accommodate whatever market need there is.'' But according to Brennan, people deserve a choice in educating their young.
Someone should open a new hotel in downtown Akron and ask Brennan to subsidize the mortgage payments from his hotel, like he gets from all public schools that have to subsidize his schools. Wouldn't that be fair?
Come on, Mr. Brennan. People deserve a choice in where they stay, and it is only fair you pay for them to stay at your competition. It's what you expect from public schools, right?
We could call it charter hotel.
RHJones, CORE member

Wednesday, July 11, 2007

Your help needed to collect signatures at meetings, fairs, church, ball games, anywhere! Contact information included here

Sent: Wednesday, July 11, 2007 12:04 PM
Subject: Continued Collection of Signatures
To: Superintendents, Principals and Treasurers & others
From: William L. Phillis
Re: Continued Collection of Signatures
Date: July 11, 2007

FYI to all interested persons
TO: All Superintendents
FROM: Jerry Klenke, BASA Executive Director
SUBJECT: Continued Collection of Signatures
The recent acknowledgment by the Campaign for Ohio’s Future that the constitutional amendment would not qualify for the November ‘07 ballot was made with great reluctance, but we felt it was only fair to you to allow for your own district planning.
The reason for the timing of the acknowledgment was to allow school districts that were contemplating operating levies in November to be aware that they would not be competing with a statewide constitutional amendment if they went forward with those plans.
However, our announcement did not indicate we were suspending our initiative. Unfortunately, some have interpreted the acknowledgment as an indication that petition circulation at local fairs and other festivals would be suspended. That is not the case and plans to staff fair booths are going forward and we need your help.
The Campaign would like you to continue these efforts so that we can demonstrate the growing support around the state for a comprehensive, permanent school funding solution. We will continue working on your behalf to solve this ongoing problem facing school districts.
I (KBB) contacted the Ohio Coalition for Equity & Adequacy of School Funding about blogging the above message and including a contact. Here is the response:
July 11, 2007
That would be wonderful. Please list the Ohio Coalition for Equity & Adequacy of School Funding as the contact. I will be more than happy to send petitions, instructions & tip cards to anyone who will help!! Our information is as follows:
Ohio Coalition for Equity & Adequacy of School Funding
100 S. 3rd Street
Columbus, OH 43228
Thanks for your help!

Your NEA, the Sudan Divestment Task Force and the destruction of your pension fund

Wake Up, Ohio!
To John Curry, July 11, 2007
(Name withheld) thought you would be interested in the following article from the National Education Association (see post below)
Message: John, It's official. NEA has been hijacked by Sudan Divestment Task Force ( NEA will be come an official mouthpiece for their propaganda and destruction of public pension funds. See Number 4. (Number 5 is curious--will they sneak divestment into the mix?.)

Sudan Divestment Task Force and the NEA convention: NEA wants YOUR pension system to divest

RA Action: News from the NEA Annual Meeting
July 2, 2007
NEA utilize its influence to have retirement systems develop policies of targeted divestment from companies on the Sudan Divestment Task Force’s Worst Offenders list. Also that the NEA inform its members and affiliates about the genocide in the Darfur region of Sudan.
Since many states are already divesting from these companies, their stocks are losing value, so divestment is fiduciary prudent.
Submitted by
Majority vote at regularly called meeting of the state delegation in connection with the annual meeting.
Jay Kaplan, Vermont
Relevant Operational Service (OS) Area
OS-2 Member Advocacy
Cost Implications
Assuming NEA would use its influence by sending a communication on this subject to member trustees and that members would be educated through existing electronic means, this NBI can be accomplished within the proposed 2007-08 Strategic Plan and Budget at no additional cost.

Oh yes, Caremark again

July 11, 2007
Subject: update
I received today 7/11/07 an envelope from Caremark to send my Tamoxifen prescription back to them. This still doesn't change the fact that I had to go through so much hassle to get to this point. I will send the Tamoxifen back, but I am keeping all correspondence and invoices from Caremark. I wanted to give you an update. (Name held)

Not related to our cause, but.....

PD article slams STRS

Making Ohio schools better isn't just a question of money
Cleveland Plain Dealer, July 11, 2007
Maybe someone ought to tell the PD editor that the president of the Fordham Foundation (Chester Finn) has been affiliated with charter schools and who is willing to stand by and see that charter schools are more than happy to turn education taxpayer dollars into profits for executives who will smile all the way to the bank! This article continues -- in a not so subtle way -- to "toot the horn" for those who deem privatization as the cure for education ills and to profit off the spoils of the education reform movement. These are the same executives who don't even manage to return to the school environment for a "period or two" in an entire school year! The "right wing" continues to flutter....doesn't it? [John Curry]
Today, Gov. Ted Strickland starts the tortuous process of trying to fix school funding.
He is to meet this morning with education groups, including members of the coalition that proposed a sweeping constitutional amendment that Strickland himself opposed.
This session is expected to be the first of many constituent meetings; the governor has vowed to talk with a wide range of groups - not just educators - as he crafts a new plan.
Today's meeting is likely to focus squarely on increasing appropriations. But the importance of education to Ohio's future requires a far more sophisticated approach to education policy. For example:
Performance pay: Long opposed by teachers unions, the concept has gained enough political ground that Democratic presidential candidate Sen. Barack Obama actually announced his support for it last week at the annual convention of the country's largest teachers union.
Sustainability of the State Teachers Retirement System: As a new report from a conservative education group notes, the average retirement age for Ohio teachers is 58, well below the private-sector average. Couple that figure with increasing life expectancy, and STRS faces a fiscal crisis. STRS officials have proposed increasing employer and teacher contributions, but that would be just a start.
Innovation: Other states use creative approaches to attract top talent - loan forgiveness, reduced housing costs and programs to bring professionals to the classroom for a period or two every day.
This list is just a beginning.
Strickland's chief challenge will be to convince Ohio that its education debate must go beyond mere dollars.

Volunteers needed NOW -- to save YOUR future!

From RH Jones, July 11, 2007
Subject: Volunteer your time for CORE
To all:
Many retired educators are volunteering their time for just about everything except to volunteer to squelch the most damaging issue of our day: The well financed neo-conservative movement to privatize America's public school system. You can wisely spend your time at home at what educators do best: communicating; Or you can spend your time foolishly volunteering for that which is mundane. You waste your volunteer time at you own peril. Your STRS pension is suffering NOW. What further proof do you need?
Take the time to read Kathie's blog at: Then phone, write, or meet with your national and state representatives; Phone, write or meet with the news media. Talk, talk, talk to anyone and everyone you can to get proper public backing for America's public school students and their educators. The daily attacks on public education swamp the news media with unfounded charges against our schools. Volunteer to counter that! Volunteer to fight the unreasonable politicians who would stupidly join the ranks of those who would have America on the fast track back to the depression era.
Volunteer your service at the Concerned Ohio Retired Educator (CORE). CORE is the core of the power to turn the tide; This is the place to stand firm against the onslaught. Since it's conception in the year 2000, CORE is the group of educators that has been most successful in this continual struggle to right what is right: America's public schools. Active & retired educators are sorely needed. PLEASE VOLUNTEER!
RHJones, a proud volunteer at the CORE
From John Curry:

Right on, RH! We don't need sheeple, we need PEOPLE! If the populace of the 13 original colonies had been inhabited by retired educators.... we'd still be flying the Union Jack and paying tribute to the Queen Mother!
.....There are tons of retired educators who read Kathie Bracy's blog (50,000+ hits) and are on STRS email lists or who get forwards of STRS related emails who DO KNOW WHAT'S GOING ON....MOST of whom have been there for years....all but a handful have asked to be removed but THE MAJORITY OF THE REST REMAIN SILENT...especially retired administrators! Where have your leadership skills gone? Are you afraid to speak up? What are "they" going to do, non-renew your contract? Like RH says.."Speak UP." It's only your future! John

Tuesday, July 10, 2007

Another reply to the divestment scheme

Source: Writes Like She Talks blog
(July 2007)

Brian O'Connell said... Except that US companies have already divested from Iran & Sudan. The Mandel bill would have extended that to second-order investments, and only by state pension funds, i.e. for them to divest from non-US companies and US corporations whose foreign subsidiaries are doing business in Iran and Sudan, such as Rolls-Royce or GE.
Without looking it up, the US Iran sanctions have been in effect for nearly thirty years, and Sudan for a couple.
The Cuba vs China debate on US sanctions will continue of course, but the debate has largely been settled on Iran and Sudan. The Mandel bill constitutes a small state add-on to the existing federal policy.
So the question was not should we divest from Iran and Sudan- we already have done so. The question was whether the public pension funds should have this special burden with regard to second-order investments. I think the cost to them outsized the limited benefit to the US- plus it was just unfair to target public pensions exclusively.

A taste of justice at Caremark!

CVS/Caremark director election highlights troubles with broker-voting
By RACHEL BECK AP Business Writer
July 7, 2007
NEW YORK — Activist CVS/Caremark Corp. shareholders can finally claim victory in a controversial director vote that revealed so much of what’s wrong with today’s corporate elections.
At issue is how shareholder votes get tallied for proxy proposals and director elections. Investors want only their actual votes to count, while companies often include votes from brokers for clients who may not have given voting instructions.
Those votes tend to favor companies — like it did for CVS/Caremark’s tally of votes for directors at its May 9 annual meeting. That enraged shareholders like CalPERS, the big pension fund for California state workers, the state Treasurer of North Carolina and a union-backed investment group, who said this way of voting has to stop.
The immediate target of their wrath was director Roger Headrick, who they claimed didn’t keep their best interests in mind when serving as lead independent director at Caremark during takeover talks with CVS.
As evidence, they cited the big money and job protections offered to Caremark leaders as part of the deal, while the company refused to negotiate with rival pharmacy benefits manager Express Scripts Inc., which had offered a higher selling price in a hostile bid. CVS eventually raised its offer and finally bought Caremark in March for about $26.5 billion.
Headrick won re-election at the annual meeting, receiving 606 million votes, or 57.2 percent of the total vote, by the company’s count. But activists claimed the contest was swung by an estimated 264 million votes cast by brokers, which they assume largely supported the company. Take that amount out of the total, they said, and his win falls under the majority threshold of 44 percent.
The company said it does not know how many broker uninstructed votes were cast for or against a given director, according to spokeswoman Carolyn Castel.
On Monday night, CVS/Caremark announced that Headrick had chosen to retire from the board. The company declined to elaborate further on his departure.
Whatever the reason, shareholder groups say it gives them momentum to press regulators to strip the voting power of brokers in what they allege is ‘‘legalized ballot stuffing’’ in corporate elections. They are targeting cases where brokers have the discretion to vote as they like because their clients — those who own the actual shares — haven’t told them how to vote
This issue has become more pronounced with the recent adoption by many companies of ‘‘majority vote’’ policies, which requires director candidates to receive a majority of ‘‘yes’’ votes to be elected.
‘‘This case was Exhibit A for why the voting process needs to be reviewed,’’ said Bill Patterson, who was part of the fight against Headrick as the executive director of CtW Investment Group, an arm of Change to Win, a coalition of labor unions. ‘‘We should not be seating directors when they don’t receive a majority vote.’’
But the full-court press by labor unions, pension funds and other institutional investors will only get this issue so far. Like the case of CVS/Caremark, they can create a publicity nightmare for companies, but it is up to regulators to officially alter how voting is done.
The Securities and Exchange Commission plans to propose new rules this summer on shareholder rights in corporate proxy voting. Chairman Christopher Cox said at a congressional hearing in June that the broker vote issue will be considered.
Already, the New York Stock Exchange has proposed blocking brokers from voting in director elections, but that requires the approval of the SEC before it can be implemented. The SEC has stalled in issuing a decision on the proposal.
Those fighting such change argue that smaller companies may be unable to meet quorum requirements without the broker votes. Also of concern is whether retail investors even know they are entitled to vote in corporate elections if they have bought stock through brokers.
Still, those reasons aren’t convincing enough to keep the status quo. Change doesn’t have to be an all-or-nothing fix.
The way to go may be to allow proportional voting, where the broker uses the voting instructions given by other retail investors as a proxy to determine how to vote with shares that have no instructions. Or investors could give general voting instructions when they buy a stock with a broker.
Brokers have the ‘‘fiduciary responsibility to act in the best interest of their clients and the general belief is that is not happening much of the time,’’ said Patrick McGurn, senior vice president and special counsel at the proxy advisory firm Institutional Shareholder Services.
That’s exactly the view of many shareholders at CVS/Caremark. They eventually got their way, but others might not unless the rules shift in their favor.

Another anti-devestment piece in the OSU Lantern

Source: Writes Like She Talks blog
Tuesday, July 10, 2007
OSU's The Lantern: Against pension fund divestment This opinion piece was written by James Crepea, an Ohio State University senior who is majoring in journalism, marketing and political science. In sum,
If American companies pull out of Iran entirely, as European companies did in Sudan, there are two potential outcomes: Either less investment in Iran leads to civil unrest and local distrust with the Iranian government, or there is increased anger and hatred toward the U.S. and Europe for stifling Iranian jobs and infrastructure.
It will be easier to achieve long-term goals with Iran by helping to build its economy from within and showing the weaknesses of its government to Iranians, whereas pulling out foreign investment will only help to embolden Ahmadinejad and his anti-U.S. supporters.
Although I applaud and respect Mandel for his service to his country and for raising questions about investing in Iran, I think he is wrong and about to make a mistake similar to what the U.S. made when choosing to impose an embargo with Cuba; unfortunately, the consequences in Iran could be far more dangerous.

Another right-wing think tank spokesman attempts to curb educators' bennies in Michigan!

The following is from an Upper Peninsula newspaper in Michigan. John [Curry]
The Mining Journal - Published: Monday, July 9, 2007
‘Real’ reform elusive
LANSING, Mich. (AP) — Both Republicans and Democrats say they want ‘‘real’’ changes and savings in state government before asking Michigan citizens to pay higher taxes.
But that’s much easier said than done— as shown by recent attempts in the Legislature to alter health benefits for school employees and retirees.
A proposal requiring new teachers to work 30 years to get 90 percent of their monthly medical insurance premium paid for during retirement got no backing from Senate Democrats. Some retirees now qualify for the same coverage with just five or 10 years of work.
Another core GOP bill, which would open up the claims data of an insurer affiliated with the state’s largest teachers’ union, didn’t even win support from all Senate Republicans.
Eventually, Gov. Jennifer Granholm, the Democratic-controlled House and Republican-led Senate may agree to the bills and other cost savings along with tax hikes to help balance a projected $1.6 billion shortfall in the state budget that starts Oct. 1. Some lawmakers won’t vote for changes unless they’re part of a comprehensive budget deal.
But that doesn’t comfort observers who are unimpressed by a lack of action on reforms to date.
Jack McHugh, legislative analyst at the Mackinac Center for Public Policy, cites a bill passed by the Senate last month. Retired teachers and other school employees would get 3 percent of their monthly health costs paid by school districts for every year they have worked, as long as they have worked at least 10 years.
‘‘That is the most weak, tepid, quote ’reform,’’’ McHugh said. ‘‘That’s not even a reform. That’s just correcting something that’s corrupt.’’
McHugh says legislators also should get behind proposals such as ending monthly retirement pensions for newly hired teachers and switching to a 401(k)-type defined contribution system. New state employees went to a 401(k) system in 1997.
The free market-oriented think tank in Midland also supports ending retirement health benefits for new employees. Outside the auto industry, McHugh says, few private employers provide medical insurance to retirees any more.
‘‘We are paying school and state and local government employees compensation rates and benefits as if we were the richest state in the union,’’ he said.
Public-sector workers and their labor unions disagree.
‘‘Teachers and public school employees have come to expect high-quality benefits as a tradeoff for generally lower salaries than similarly trained professionals,’’ said Doug Pratt, spokesman for the Michigan Education Association, or MEA, which represents 157,000 teachers and other education workers.
Pratt disputes the GOP’s belief that letting school districts pool employees’ health costs will save money. Aside from fixing health care at the national level, he concedes, the only way to lower costs immediately is reducing existing benefits — ‘‘which I don’t think anybody wants to do.’’
Many legislative proposals would affect school employees hired next year and beyond but not veteran teachers, saving money years down the road. Some changes such as shifting to 401(k)-style benefits actually could require a $157 million upfront contribution from the state.
‘‘We can’t afford to spend more right now on something like this,’’ Pratt said, adding that Michigan can’t cut its way out of a deficit.
The quandary with educators’ labor costs isn’t unique. Consensus also is lacking over other restructuring proposals — new sentencing guidelines that would keep more criminals out of state prisons, privatizing prisons, becoming a part-time Legislature, cutting welfare and Medicaid, and getting concessions in current labor contracts from prison guards and other state employees.

Monday, July 09, 2007

Retiree screwed by Caremark?

From John Curry, July 9, 2007
Subject: Caremark screw-up again?
My name is (name held by request). I am a retired educator. I spoke to (name held by request) who recommended that I write to you about my recent problems with Caremark.
I was given a new prescription for Tamoxifen 20mg once a day on June 20. I sent this prescription along with an arthritis prescription on June 23. On June 26, I had an emergency appointment with my gynecologist who recommended that I eliminate the Tamoxifen. I called Caremark immediately when I returned to my hone. The time was approximately 2:00 p.m. I spoke to a representative who forwarded on the computer to the pharmacy that I wished the Tamoxifen prescription to be canceled. He asked me to call again on June 26 to call about the same time on June 27 to check the status. I did as he asked and was told that the Tamoxifen had been sent out. I was quite upset. $25 is not a lot of money, but I could use it. I received the Tamoxifen on June 28. On my invoice (which I am keeping), it states "Date of Fill 06/27/07". The arthritis med did not come with the Tamoxifen which was very unusual. The arthritis med came on July 1. I called Caremark again. I talked with Marshina, who was the most helpful representative that I had talked to. She told me that the Tamoxifen to be canceled came up on her screen on the computer. She thought it was odd that the arthritis med was not sent with the Tamoxifen. Marshina told me that she would request the pharmacy to send me an envelope to return the prescription. I never received any envelope from Caremark. I talked with a representative at STRS today. I thought that I was talking to an advocate for ME, but she apparently was a representative of Caremark. She told me that I was screwed! So now I have a 90 day supply of a med that I don't need and I am out $25. I realize that my timing was not the best, but I don't feel that I was treated with fairness. I taught their children for 30 years and did an excellent job of teaching. I was a great teacher with many successes. Now the system that I trusted is doing a terrific job of interfering with my much earned retirement. I should not have to deal with all this. (I am venting!) I have had other problems with Caremark, but I don't have any documentation.
Thank you so much for listening to me. Thank you for trying to help educators. If there is any thing I can do to help, please contact me. May God continue to bless your efforts.
(Name held by request)

Another zinger from the guy who brought us HB 151 re: vouchers and separation of church and state -- from a resident of his own district!

From John Curry, July 9, 2007
Source: Writes Like She Talks blog:
Monday, July 09, 2007
Vouchers prop up Catholic education
I heard a quick snippet on WCPN's local news this morning and jotted a note, but I haven't had time to write about it.
So it's with great relief that I can say, "Everything he says."

I know that there are advantages for Jews who attend day schools if we blur the lines and say okay to vouchers. But I'm not and I've not been in favor of vouchers, regardless of that possible financial assistance for those who attend Jewish day schools (and all of my kids did attend Jewish day schools at least through Pre-K and one through kindergarten - it ain't cheap).

So I have this question for my state rep., Josh Mandel: I read here that you believe in the separation of church and state. But I read here that you support school vouchers (though the article deals primarily with the now vetoed special ed voucher proposal). Help us out and explain how that can be, especially in light of the AP's news today?

Now, I don't think you're alone in needing to reconcile those two positions, so I would want anyone who expounds these two positions to answer the same question. In fact, the fact that so many politicians will say both things is exactly why this question needs to be asked, not only of my state rep but of many others.

Divestment from a state legislature that is understanding....unlike some in the Ohio House!

From a concerned retiree to John Curry, July 9, 2007
Subject: Re: Oregon divestment--smart bill!
Hey John, I just took a look at Oregon's Sudan divestment bill for the first time. I'm attaching it. The first page is the usual statement about the atrocities, etc. But on page 2 there is this clause:
(2) Divestment and reinvestment of subject investment funds under the provisions of this section shall be accomplished without monetary loss to the funds through reasonable, prudent and productive investments in companies and institutions generating returns that are comparable to the returns generated by the companies subject to the divestment.
Oregon could see the future of divestment and took control of the situation. If only I knew a year ago what I know now.

73rd OREGON LEGISLATIVE ASSEMBLY--2005 Regular Session
Senate Bill 1089
CHAPTER ................
Relating to Republic of the Sudan; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
Sections 2 to 8 of this 2005 Act are added to and made a part of ORS 293.701 to 293.820.
SECTION 2. Sections 2 to 8 of this 2005 Act may be cited as the Oregon Human Rights and Anti-Genocide Act of 2005.
SECTION 3. As used in sections 2 to 8 of this 2005 Act:
(1) 'Company' means any sole proprietorship, organization, firm, association, corporation, utility, partnership, venture, public franchise, franchisor, franchisee or its wholly owned subsidiary that exists for profit-making purposes or otherwise to secure economic advantage.
(2) 'Doing business' means maintaining equipment, facilities, personnel or any other apparatus of business or commerce in Sudan, including the ownership or possession of real or personal property located in Sudan.
(3) 'Investment' or 'invest' means the commitment of funds or other assets to a company, including a loan or other extension of credit made to that company, or the ownership or control of a share or interest in that company or of a bond or other debt instrument issued by that company.
(4) 'Subject investment funds' means:
(a) The Public Employees Retirement Fund referred to in ORS 238.660;
(b) The Industrial Accident Fund referred to in ORS 656.632;
(c) The Common School Fund referred to in ORS 327.405;
(d) The Oregon War Veterans' Fund referred to in ORS 407.495; and
(e) Investment funds of the State Board of Higher Education available for investment or reinvestment by the Oregon Investment Council.
(5) 'Sudan' means the Republic of the Sudan and any territory under the administration, legal or illegal, of Sudan, including but not limited to the Darfur region.
Enrolled Senate Bill 1089 (SB 1089-A) Page 1
(1) The people of Oregon condemn the human rights abuses, enslavement and genocide in Sudan and declare these atrocities to be absolutely contrary to the fundamental principles of human rights and standards of justice and individual freedom.
(2) The Legislative Assembly finds:
(a) The Congress of the United States has declared that genocide is occurring in the Darfur region of Sudan;
(b) The National Black Caucus of State Legislators Resolution
05-144 declares that the atrocities unfolding in Darfur are genocide under Articles 1 to 3 of the 1948 United Nations Convention;
(c) The United Nations International Commission of Inquiry on Darfur found that government forces and militias of Sudan have conducted indiscriminate attacks, including the killing of civilians, torture, enforced disappearances, the destruction of villages, rape and other forms of sexual violence, pillaging and forced displacement throughout Darfur;
(d) Sudanese government forces and government-supported militia forces have implemented a coordinated policy of ethnic cleansing;
(e) More than 2.2 million people are affected by the crisis in Sudan, with 1.2 million displaced inside Sudan, 200,000 living as refugees and more than 50,000 people having died, according to the Catholic Relief Services;
(f) Sixty percent of the villages in Northern Darfur have been destroyed or abandoned according to the Intermediate Technology Development Group;
(g) Sudanese government forces have pursued a scorched earth policy aimed at removing populations from around a newly constructed oil pipeline and other oil production facilities, according to the United States Department of State Report on Human Rights Practices in Sudan;
(h) Fourteen thousand Dinka women and children have been abducted in Sudan according to the United States Department of State 2005 Trafficking in Persons Report;
(i) Christian Solidarity International reports that the government of Sudan is responsible for the revival of the evil institution of slavery;
(j) The Methodist Church of Southern Africa reports mass rapes of girls and women, the displacement of millions of people and genocide and ethnic cleansing in Darfur;
(k) The Committee on Conscience of the United States Holocaust Memorial Museum has declared a genocide emergency in Sudan;
(L) Genocide, enslavement and such atrocities are repugnant to the basic principles of liberty and justice in the Bill of Rights, Article I of the Oregon Constitution, which are fundamental to the character of a free society; and
(m) The investment of subject investment funds in business firms and financial institutions with ties to the repressive regime in Sudan is inconsistent with the moral and political values of the people of Oregon.
SECTION 5. (1) The Oregon Investment Council and the State Treasurer, in the State Treasurer's role as investment officer for the council, shall act reasonably and in a manner consistent with ORS 293.721 and 293.726 to try to ensure that subject investment funds are not invested in any company that the council knows is doing business in Sudan for as long as the Sudanese government's campaign of human rights violations, atrocities or genocide continues in Sudan.
Enrolled Senate Bill 1089 (SB 1089-A) Page 2
(2) Divestment and reinvestment of subject investment funds under the provisions of this section shall be accomplished by the Oregon Investment Council and the State Treasurer without monetary loss to the funds through reasonable, prudent and productive investments in companies and institutions generating returns that are comparable to the returns generated by the companies subject to the divestment.
SECTION 6. The Oregon Investment Council and the State Treasurer, in the State Treasurer's role as investment officer for the council, shall make reasonable efforts to investigate all companies in which the council has invested subject investment funds to determine whether any of those companies are doing business in Sudan. If the State Treasurer determines that a company is doing business in Sudan, the State Treasurer shall give notice to the company that the council will withdraw subject investment funds that are invested in the company as provided in section 5 of this 2005 Act for as long as the company does business in Sudan and the Sudanese government's campaign of human rights violations, atrocities or genocide continues in Sudan.
Sections 5 and 6 of this 2005 Act do not apply to:
(1) Investments in companies that are engaged solely in the provision of goods and services intended to relieve human suffering or to promote welfare, health, education or religious or spiritual activities;
(2) Investments in United States companies authorized by the federal government to do business in Sudan; or
(3) Investments in companies that are engaged solely in journalistic activities.
SECTION 8. On or before January 15 of each year, the State Treasurer shall report to the Legislative Assembly in the manner provided by ORS 192.245 on actions taken by the State Treasurer and the Oregon Investment Council pursuant to the provisions of sections 2 to 8 of this 2005 Act. The State Treasurer shall consult with the council in preparing reports under this section.
SECTION 9. This 2005 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2005 Act takes effect on its passage.
Passed by Senate July 18, 2005
Repassed by Senate August 3, 2005
Secretary of Senate
President of Senate
Passed by House August 2, 2005
Speaker of House
Enrolled Senate Bill 1089 (SB 1089-A) Page 3
Received by Governor:
......M.,............., 2005
......M.,............., 2005
Filed in Office of Secretary of State:
......M.,............., 2005
Secretary of State
Enrolled Senate Bill 1089 (SB 1089-A) Page 4

Sunday, July 08, 2007

Sudan and Misguided Activism

Misguided Activism Abounds About Darfur
By Cody Willard Contributor
David Weidner of posits that the world will be better off when Warren Buffett is gone.
Oh, do I have a "flip it" for him. The world will be better off when David Weidner is gone.
Weidner says he wants Warren Buffett to show he cares about the genocide in Darfur by selling Berkshire's (BRKA) investments in PetroChina (PTR) , which is controlled by the government of China, which in turn does business with the government in Sudan, where Darfur is located. Weidner says that Buffett "shot down a series of do-gooder proposals that would have required the company to spare some profits in the name of social responsibility, and maybe saving a few lives."
How the heck does forced liquidation of the few cash-generating businesses in Sudan "do good" for anyone? People care about their investments, so shouldn't we want more investments in Sudan rather than fewer? If you had some real money on the line in Sudan, you'd probably follow the news and be much more active in pursuing sustainable economic foundations for the country. Those economic foundations can only be self-sustaining if they're profitable -- by definition.
Ignore those shortsighted activists who claim they're doing good for the world by forcing private investors in the developed world to leave war-torn areas. As Buffett himself asked these Darfur disinvestment activists: "Proponents of the Chinese government's divesting should then ask the most important question in economics, 'And then what?'"
If we leave -- if Warren Buffett leaves -- these areas, Sudan will only become more isolated. The corrupt factions will have more power and access more capital.
I'm considering starting a fund called "Blood in the Streets, LP" to invest in these types of war-torn areas. There is, heartbreakingly, literal blood on the streets in Sudan. And on top of it, people like Weidner are pressuring good, self-sustaining capitalists and investors to sell their assets in these countries, driving prices below even the ridiculously low fair value at which they'd otherwise be valued. Smart investors want to be on the buying side of pressured liquidations.
Anyone who would put money into such a fund will certainly be all over the U.S. government and the rest of the world to make sure they, along with the individuals suffering in Darfur, have opportunities to get a return on what they put into the country. That's virtuous for everyone except the bad guys killing hundreds of thousands of people in Sudan.
Let's discuss this in the Answers section on If nothing else, more awareness and more discussion of the Darfur tragedy are certainly positives.
At the time of publication, the firm in which Willard is a partner had no positions in the stocks mentioned, although positions can change at any time and without notice.
Larry KehresMount Union Collge
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